Building Your Money Machine

How to Save YOUR First $100k (My Savings Framework)

• Mel H Abraham, CPA, CVA, ASA • Episode 227

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Are you ready to build your first $100,000 in wealth? It's not just a dream—it's doable with the right framework!

In today’s episode, I dive deep into the strategies you need to save your first $100,000. I explain why the initial hundred thousand is the hardest to accumulate and how it accelerates from there. Then, I introduce my WEALTH framework—work the plan, enhance your income, allow for emergencies, lower your debt load, get tactical with your investing, and harness your resources. These actionable steps will help you get on the pathway to financial success.

Want to make the leap towards financial freedom and see your money work harder for you? Tune in to the full episode now!

IN TODAY’S EPISODE, I DISCUSS: 

-Why the first $100,000 is the hardest to save

-The exponential nature of wealth creation

-The six-step WEALTH framework for building your first $100,000


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PRE-ORDER MY NEW BOOK:

Building Your Money Machine: How to Get Your Money to Work Harder For You Than You Did For It! 

The key to building the life you desire and deserve is to build your Money Machine—a powerful system designed to generate income that’s no longer tied to your work or efforts. This step-by-step guide goes beyond the general idea of personal finance and wealth creation and reveals the holistic approach to transforming your relationship with money to allow you to enjoy financial freedom and peace of mind.

Part money philosophy, part money mindset, part strategy, and part tactical action, these powerful frameworks will show you how to build your money machine.



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, 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 absolute entrepreneur. All right, so if building your first hundred thousand dollars in wealth is so difficult, then what do you do to get past that point? Because on the other side of it, it's a lot easier. Now, there's a lot of reasons that that first hundred thousand dollars is the most difficult. And I talked about it in a prior episode, in a prior video that we'll make sure that we hook up in the, in the description below. But, but let's just talk about how this plays out because I'm gonna walk you through, effectively the math behind it first, and then I'm gonna give you a framework of exactly what to do to get to that first hundred thousand. Because on the other side of it, you're gonna see that it goes a whole lot faster. So let's jump to the iPad and let's, let's see. See how this starts to play out. Remember, I have always said that there is something called the wealth creation curve. And so it goes in. Our wealth creation is not, it's not linear. It is exponential. But there's this moment in time at the very beginning where it feels slow. And it is. It is. It's slow, but it's because you're compressing a spring. You're compressing the spring to a point that it's going to rock it. Now watch what happens if we just, and this was an example that was done by some dear friends of mine, Brian Preston and Bo Hansen. So I'm going to duplicate it here because I think it's a really powerful demonstration. So let's just assume that you're going to contribute $10,000 a year, going to invest it at 8%. Okay, what happens? Okay, your first hundred thousand dollars is going to take 7.6 years. Okay, 7.6 years for the first hundred thousand, but watch what happens. Remember I said that after, after the first hundred thousand, it gets easier. Okay, so the second hundred thousand. The second hundred thousand is actually 4.7 years. So it almost, almost cut in half, but not exactly. Okay, the third hundred thousand is, is 3.4 years. The fourth hundred thousand is 2.7 years, and the fifth hundred thousand is 2.2 years. Here's why this is important. When you start to look at this, is you. You get a chance to see what is happening here and how we're able to compress, if you will, the time between the hundred thousand. That's why this is so important and why we're talking about now. Here's where the, the power goes. Remember I said. Remember I said that you're, you're compressing a spring. Watch what happens here, because by the time you get to this point, by the time you, you got to this point, you've put. You have now $500,000. Okay? It's literally, it's literally taking you 20.6 years to get there. At ten k a year and 8%, how long does it take to get the second $500,000? Guess what? The second$500,000, where you will end up at a million dollars in total, only takes seven and a half more years. This took 20 years to get the first 500,000. But now, because of how the money's working for you, it's only taken seven and a half more years to get there. So, bottom line is this. This is why I say it's so important to get in the game, stay in the game, because you're compressing the spring. And in a place where I call the well flat line, because this is the area that I call the well flat line, is that we don't feel like we're making a whole lot of progress. And this is the place that most people quit. So, bottom line is we gotta get the first hundred thousand because it's gonna help us get to the other hundred thousands of dollars in the right way. So what is, what is the framework to help you get to that first hundred thousand dollars threshold so you can move. Move from there. And so I'm gonna break down a framework for you that I don't teach often, but I'm gonna teach it here just for you. So let's just jump back to it and let's look at the framework. All right? It's going to be an acronym called wealth. Okay? And so the first piece of this is this is that I need you to work the plan. Okay? Work the plan. Here's what I mean by this. We cannot get to where we want to get to without having a plan. In other words, we have to set the target, we have to create the strategy, and then we have to get a plan in place that makes it a reality. Now, you can call it a budget, we call it a cash resource plan. But if you don't have a plan to get yourself to that first hundred thousand dollars, probably not going to get there. And if you do, it's coincidental. And remember, we want to replicate it over and over again so we can get to the second hundred thousand, the third hundred thousand, the fourth hundred thousand. So the first piece is it of this is to create a plan and work the plan. Be intentional with the things that you do, okay. The second part of this is, is to find a way to enhance your income, okay? To enhance your income, look for opportunities, because here's what we know. If I have a plan in place and I'm able to get a bigger shovel of income, in other words, I'm able to raise my income, get paid more, whether it's through side gigs, advancement, raises, side hustles, improving skills, skilling up, find ways to get paid more or make more money. I know it sounds simple, but too often we're not doing it to enhance your income. The bigger the shovel, the more we can put towards it, the faster we get in the game, okay? The faster we get to that hundred thousand. So one of the things to look at in this is, are you getting paid what you should get paid? Are you valuing yourself the way that they should value you? And if not, let's fix that first, and then second, what skills can you acquire that will get you paid more that make you more valuable? What talents do you have? What strengths do you have that you can exploit? What other things can you do to make it work? So enhance your income? Is the e then allow for emergencies so you can't live to the end of your checks. Just if everything has to line up to pay your bills to get yourself there. You are so skinny. At the end of the month, as far as cash in and cash out, it's going to be a problem because inevitably life's going to happen. It's going to. Life happens. It's going to slap you in the face at some point, you're going to have a transmission go out, you're going to have a repair at the house, you're going to have a medical deductible. Any of those things can happen. It's happened to me. It happens regularly. All right, so in the plan, in step one, in the plan, I want you to build in your ability to create liquid funds for emergencies. Now, people will say three to six months, I think it isn't high enough. I want you at nine to 18 months, call it twelve on average. And I go more detail in this, called the wealth priority ladder, where I really kind of build it out. But you have to, have to have something in, in the works to keep liquidity, to keep you safe. We call it a peace of mind fund. To make it happen, l is to get lower your debt load. I don't believe that all debt is the devil, but I do know that all debt has two characteristics. All debt costs. It's called interest. All debt stresses, it stresses you psychologically, and it stresses you financially. So the first thing here is that I want to make sure that you have a debt payoff plan. If you have debt, consumer debt, which is destructive debt, the things that are, we should not be financing our lifestyle. If you cannot afford to do it in cash, then you can't afford to do it today. Put money away until you can afford to do it in cash. If it is luxuries or lifestyle, that is where we. Where you don't wanna finance it. You're not putting it on credit cards, especially in a high interest rate market. You don't put it on credit cards. Okay. I know that you might sit back and say, well, then I gotta give up some things. Yes. Remember, wealth creation is more about your behaviors than it is about your money. It's the choices, the decisions and the behaviors you have with your money that's gonna drive your wealth. And I'm giving you a little bit of tough love here. We don't live on credit. Now, does it mean that you never have credit? No, there's constructive debt. And that constructive debt is debt that you use not to finance consumables or a lifestyle. It's debt that you use that generates additional cash flow or wealth. So it could be debt on a rental property, it could be credit card debt on Facebook, ads for advertising. That's going to get you a return on investment because you're making a bunch of sales. But we don't carry balances. We don't do that. All right, so we want to lower debt. And then the t. The t is I want you to get more tactical with your investing. I want this to be simple. It doesn't need to be complex. I go deeper into this and everything, but I want you to get in the game. You cannot win the wealth game unless you're playing on the field. You can't do it in the stands, you can't do it on the sidelines. You have to be on the field and you get on the field no matter what. You've got, you get on the field with $5, $10, $20, whatever it is, and play the simple game and play the long game. So I want you to explore things like ETF's. I want you to explore index funds. Go through some of my trainings on that. In doing that, I talk about it in Detail in my upcoming book, building a money machine. I actually break it down for you one step at a time. So I think it's really important for you to do this, is that if we're ever going to get to $100,000, you got to invest to get there. You cannot save yourself there because remember, it took 7.6 years to get to$100,000 at$10,000 a year earning 8%. Well, you're not getting 8% just by putting it in a mattress or in a cd. You got to get it in investments to make that happen. And you can put it into an S and P 500 index fund or total stock market index fund, low cost, low fee and potentially. And get yourself, get yourself there. Now, there's going to be ups and downs and all that, but you need to really look at it through those eyes. So work the plan and build it. Now. H, I want you to start to look at things and say, are there any other resources I can harness? Oh, I might have. So here's what I mean by that, is that I want you to look at things, and I actually break this down in a lot of detail when we talk about the wealth priority ladder. And then I'm going to give you some steps to walk through here is that you might have access to free money, y'all. If, if you are working for an employer that has a 401k that they match on and you are not participating to the extent of the match, you're leaving money on the table. Imagine this. I'm going to come into your world, I'm going to come into your home and I'm walking around your home and I'm dropping $100 bills all around the house. You're going to pick it up. I bet you're going to pick them up. Come on. So here's what your employer is doing when they have the 401k match, is that they're saying to you, if you put dollar 100 bill down, I'll put dollar 100 bill on top, and then you can pick up the dollar 200, but I won't put the dollar 100 bill on top if you don't put one down. So you got to, you got to, in a sense, pay to play get in the game. So, but it's free money. I put 100 down, they put 100 down, I walk away with 200. That's a good return in my book. So maximize your contributions and make sure that you're taking advantage of the free money, take advantage of the matches and make sure that you're doing that. Now, resources means taking care of that, but it also means education, it also means systems, it also means discipline. It means that. A couple things I want you to dedicate yourself to not being some expert on investing in wealth, but to be informed enough to make decisions, to sit back and say, I'm going to read a book a month on investing or money management or something like that. Start with my book. Start with my book, building your money machine. All right. And also you're going to follow other podcasts, other shows, make sure you're following mine. And then also you're going to track your portfolio, track your progress, not for judgment, but for management. Okay, for management. So the three things get involved when it talk about harnessing resources is to make sure that you're maximizing the matches, getting the free money, two, getting educated, and three, you're doing regular, regular reviews of your portfolio. So, all right. With that, what are the steps that you need to take? I think there's eight steps that you can take here. And step number one is to first look at where you're at. Now, this could be a reality check you might look at and go, I don't like the picture. That's okay. That's okay. But the first step to understanding your journey is to understand where your starting point is. So understand what your current net worth is, assets minus liabilities, understand what your income is, the money that's coming in and where it's coming from. Understand where the money is going out, the expenses and the debt and how much is going in savings. Assess your current situation. So step one is that step two is saying, all right, let's figure out the destination. What are the clear, specific goals that you're trying to accomplish and by when. Set a specific goal for reaching that first hundred thousand dollars in net worth. Break it down into smaller, manageable objectives. Sitting back and saying, I want to hit that first hundred thousand dollars in five years, in six years, in three years and break it down. Say, well, if I want to hit it in five years, what do I need to do in year one, year two, year three, and then break it down even more and say, quarter one, quarter two, quarter three. So step two is setting clear goals and breaking it down. Step three is I want you to create an effective plan. You now know your situation. You now know where you want to go. Create the plan to make it happen. Create the plan. What are we going to do? What accounts am I going to have? How am I going to going to do this? How much money is going to go to the high yield savings account? How much money is going to go towards the formula? How much money is going to go towards debt? If you need a way to pay down your debt, I want you to go to melabraham.com node, download my debt breakthrough calculator. It's totally free. Put your debts in there. Get on a payment plan. Let's get you out of destructive debt. Let's make it happen. But you need in step three, you have to have a plan. Step four is that you follow something that we follow called the wealth priority ladder. I talk about it in detail in my book. It literally will tell you specifically what to do with every single dollar when it comes in. It is the recipe, it is the prescription to follow, to build your wealth, to build what I call your money machine. And this is the thing that's going to keep you safe, allow you to grow and find your path to financial freedom. Step five, get in the game. You know, make sure that you are in the game and that you stay in the game. It isn't like put your, your toe in the field and then jump back to the sidelines. Stay in the game. Stay in the game. So step five is an easy one. Just commit, make it a priority. Step six, look for ways to increase your income. Okay. The more you can increase your income through either career advancement, raises, side gigs, additional sales, all those things, additional skills, the faster you'll find yourself there. Step seven, invest in yourself. Take the time to grow the skills, whether it's getting a mentor, getting a coach, getting training, taking courses, reading books. Invest in yourself. You will never go wrong by increasing your financial acumen, your financial literacy and everything. Be an actively engaged person in your financial journey. And last, step eight, monitor and adjust it regularly. That's it. I get it. I threw a lot at you. But the bottom line is this. You have the framework of the wealth framework that you can work through and you now have the eight steps. I want you to get to that first hundred thousand dollars, because as I showed you at the very beginning, first hundred thousand may be the hardest, but once you get there, it starts to accelerate. And when it accelerates, that's when your money starts to work harder for you than you did for it, and that's the objective. All right? I hope that you found this of value. I hope that you found this helpful in your financial journey. And if you have questions, if you have things that come up, do me a favor. Reach out to me, let me know. All right? We'll bring it on the show. We'll have a conversation about it. Here's the point. I got nothing to sell you, okay? I'm not selling you investments. I'm not selling you insurance, selling you on your dreams. I truly believe that financial freedom is your birthright. And I'm on a crusade to light the path for a million families to find that path to financial freedom. And I want one of them to be you, all right? Until I get a chance to see you on the road in another episode or out there while I'm speaking, always, always strive live a life that outweighs you. Thank you for listening to the affluent entrepreneur show. 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.

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