The Affluent Entrepreneur Show

Making Money Doesn't Guarantee Wealth

August 14, 2023 Mel H Abraham, CPA, CVA, ASA Season 2 Episode 165
The Affluent Entrepreneur Show
Making Money Doesn't Guarantee Wealth
Show Notes Transcript Chapter Markers

How often do we hear people say, "If only I had more money, I'd be financially free!"

But here's the truth: Having a pile of money doesn't automatically lead to wealth or financial success.

Today, we're gonna bust that myth wide open! We're gonna have a good conversation about the common belief that money equals wealth, and why it's far from the truth. And, we'll talk about the big mistakes people make when it comes to managing their money, and why just earning more won't cut it.

It's time to dig into the missing link that leads to genuine financial freedom. So go ahead, hit that play button, and together, let's make it happen!

IN TODAY’S EPISODE, I DISCUSS: 

  • The common misconception about wealth and money
  • Why simply earning more money isn't the answer to financial freedom
  • The steps to build your own money machine for financial freedom

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This is the Affluent Entrepreneur Show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect so you can scale your business us scale your money and scale your life while creating a deeper impact and living with complete freedom. Because that's what it really means to be an athlete. Entrepreneur having a whole lot of money doesn't make you wealthy, and in fact, it doesn't guarantee any kind of success financially. In this in this session, I'm going to talk about some of the mistakes that people make and the things that you need to worry about, because it's not just about acquiring assets that matter. It's not just about generating income that matter. There's a missing link. I'll see you in the episode let's make it happen. I hear this all the time. Hey, Mel, how do I make more money? Now, my question back is, why do you want to make more money? And typically they say, because I want to build wealth. I want to be financially free. I want to have that rich life that you always talk about. Mel, what if I told you that having money doesn't guarantee your success or a successful financial future or your wealth? Here's what I mean. Here's the thing. There's a lot of people out there that make a lot of money. There's a lot of people that don't have an issue with making money. Many entrepreneurs, one of their greatest skills is generating income. The problem is when their next greatest skill is spending the income. See, here's the thing. Money, yes, is one of the three things you need to build wealth, because we need discipline, we need time, and we need money. Okay, here's the thing. With money, it's just not enough. Why do I say that? Let's just talk about it. Because we can accumulate a lot of money and we can lose it. I had a family that came to me a while back, the two boys, the two sons. And they came to me when their mother died and said, what do we do? They had $5 million. And I looked at it, and we were having conversations about what they could do with the$5 million and everything. But in the conversations, I find out that five years earlier, their dad passed away. So they lost their mother and their father within five year time period. But here's the thing. Five years earlier, when their dad passed away, they were worth$180,000,000. So in a five year time frame, mom and the boys went from $180,000,000 to five. They lost $175,000,000. You have to try really hard to lose$175,000,000 in five years. Now, it doesn't help when you have bad advice, bad investments. Quite frankly, some thievery going on all kinds of things. But why I tell you this is that too often, especially as entrepreneurs, we get so caught up in acquiring, achieving, accomplishing, accumulating, and then transferring those assets, transferring those assets to our children, to our spouse, to our legacy. And we're so focused on the assets, we never take the time to focus on the skill sets. I truly believe and the people that I work with understand this, is that you never ever transfer assets without first transferring skill sets. The reason they went from 180,000,000 to 5 million is because dad never took the time to transfer the skill sets to mom and the boys. Therefore, they were saddled with the assets without the skill sets to do it. This is like getting behind a fighter jet, getting in a fighter jet cockpit, and you've never flown in your life. You don't have the skill sets to navigate. You don't have the skill sets to fly it. You're going to crash. And that's what happened. And so the important thing is to start to ask yourself what are the skill sets that you need as an entrepreneur to navigate your financial future? I get it. You have the skill sets to build your business because that's what you're doing. You have the skill sets to do the job because that's what you're doing. But there's another set of skill sets. And as much as you might sit back and say, I don't want to deal with the money, if you don't deal with the money, it won't deal with you. It has to be something that you're proactively involved with. That doesn't mean that you need to be some analyst like me. You don't have to read charts, but you have to check the pulse on the patient. Here's the thing. You may hire advisors. You might have CPA, you might have attorney, you might have financial advisor, you might have a broker. You might have all these people in your life, but none of them let me repeat this none of them should have the hands on the wheel of your financial ship except for you. The fact of the matter is that you're the captain. You need to step up to that helm. You need to grab that wheel. And all the advisors, whether it's me or other folks, they need to be to your right and left, helping you navigate, helping you look for the problems in the sea, helping you navigate to your financial future. But you have to be the captain of the ship. That means that you need to learn some skills to make that happen. So let me give you a for instance. And these boys unfortunately, didn't get this to happen. And I think sometimes we don't want to talk about money. We say, oh, we shouldn't talk about money with our kids. I actually think that's wrong. And I have firsthand experience around it. I raised Jeremy as a single full time dad. He came to live with me, my son, when he was five and a half, six years old, okay? And it was just the two of us. And I started right around ten years old. I put him on what I call a commission. I didn't give him an allowance. He had a commission. And a commission was tied to value that he provided. Now, the value was chores or this and that. But I wanted him to create and understand this concept of value exchange. You don't get paid because you're entitled to payment. You get paid because you provide value in someone else's life. And in that process, he got paid a commission. And from that commission, then we had the opportunity to then have money conversations. How do you balance the checkbook? What do you do with the money? What is it like to invest? What is it like to give and donate? So he had a segment of that money that he was able to spend. He had a segment of that money that he was investing. He had a segment of that money that he was giving to charity. And the fact of the matter is that it allowed us to have a different conversation. He was using it. He paid his school lunches from it, he bought his clothes from it, he bought his toys from it. So indirectly, I was funding it. But in the process, he was learning about money. And when we start to have those conversations around it, they start to appreciate the value of work, the value of a dollar, the time value of investing. Jeremy today is 32 years old with a wife 30 years old. They've got their first child and second child on the way, three homes and a multimillion dollar net worth. He understood the dynamics of creating wealth. He understood the richness of life. It wasn't all about the money. The two of them get it. It's about experiencing life. And the money gives them the facility to be able to experience life. They're taking a month off to go to Portugal, and they're going to travel a month, a year because they want to experience life together. We talked about it on a recent interview with him. And that's the thing. I think it's your turn. I think it's your turn to do this now. Whether you have children or grandchildren, you want to have this conversation. Listen, my granddaughter and my soon to be other grandchild, which you don't know, whether it's a boy or girl, we're going to have these conversations. We're going to build the skill sets in them so they can become independent financially. But what will happen is then they can create their own wealth and they can acquire wealth through inheritance. If we choose to do that, and if they don't need it, it goes to charity, it goes to good causes. And so the point is that we want to make them self sufficient. The point is that money itself without skill sets isn't going to create wealth, whether it's in your life or your children's life. What we need to do is build the right skill sets based on principles, based on priorities, based on processes that are proven when we do that. Now, whether you have a dollar, $100, or $1,000, we have the skill sets to turn it into a million, 2 million, 3 million, 10 million and more. But if we give them 10 million or you end up getting 10 million without the skill sets, you'll turn it into a dollar. It is the reason that you see lottery winners going broke within a couple of years of winning the big lottery, because they haven't developed the muscles, the behaviors, the thinking that they needed to sustain themselves for that wealth. That's how these boys went from 180,000,000 to 5 million in five years. And I don't want that for you. The whole purpose of what I do because I sell no investments. The whole purpose of what I do is to coach you, to help you, to inform you, to do these videos, these shows, and my programs, to educate you, empower you, and to give you the tools, the skills and talents that you need to navigate your financial future. To grab ahold of that wheel at the helm of your financial ship, to know that you have the right people on your right and left to help guide you. But you get a chance to make some informed decisions that you all of a sudden found yourself completely in control of your financial future, your financial destiny, in a way that it never happened before. And that's the key. That's what affluence blueprint is all about. That is what in this new season of life, because you need to build that money machine to give you that financial freedom. I want to help you do that. So here's the deal. I hope that this helps. I hope that you start to look at money differently and look at the way you do this differently. I get it. Maybe this is new for you. Maybe you've never done it. Let's take it one step at a time. That's all we need to do. One step at a time. And you'll learn along the way, okay? It's all learnable skills, and there isn't anything that you can't learn that can't make a difference in yourself and your finances moving forward. Thank you for listening to the affluent entrepreneurship. With me. Your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the Affluent Entrepreneur Facebook group now by going to MelAbraham.com/group and I'll see you there.

Introduction
The misconception about money and wealth
Real-life example: From $180 million to $5 million in five years
Why entrepreneurs need to be actively involved in their finances
Teaching financial independence to children and grandchildren
Importance of building the right skill sets for financial success
Encouragement to take control of your financial future