Building Your Money Machine

Money Lessons I Know at 62 I Wish I Knew at 32

• Mel H Abraham, CPA, CVA, ASA • Episode 230

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Do you ever wish you knew at 32 what you know at 62? It's not about regrets; it's about turning life's lessons into actionable wisdom!

In today’s episode, I share the money lessons I’ve learned over 62 years—insights I wish I had at 32. We dive into living your own dreams, and not someone else’s. You’ll hear why accepting and learning from your mistakes is crucial, illustrated by my own encounter with a Ponzi scheme. I talk about the importance of making informed financial decisions, and how investing—rather than just saving—is key to wealth accumulation. 

Plus, discover why budgeting is less about deprivation and more about permission planning, and why saying no can sometimes be the most powerful decision you make.

Want to make the most out of your financial journey and avoid the pitfalls I encountered? Tune in to the full episode now!

IN TODAY’S EPISODE, I DISCUSS: 

- Embracing life lessons and making the most of every moment

- Learning from mistakes and the power of discernment in your commitments

- The importance of budgeting as permission planning, not deprivation


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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 can you imagine being able to go forward in time so you can gain the knowledge and wisdom and then go back in time so you can live with that? I mean, I know that there's been plenty of times in my life where I've looked at myself or looked myself in the mirror and said, God, I wish I knew then what I know now. And maybe you've done the same. And the fact is that maybe you can, maybe you can get a little glimpse at what you need to know so you don't have to wish you knew it now when you get to the future. So here's how we're going to do this. Look, um, I'm 62, gonna be 63 this year. Although my wife says I still act twelve. And she's probably right. My day's not complete until she rolls her eyes at me each day and just says, are you ever going to grow up? And I tell her, the answer is the same as yesterday. And the answer is no. I'm going to always be a kid. But that's, that's another discussion. But here's, here's the thing. 62 years old, I've had a chance to see some things. I've seen, um, fed raising rates 40 plus times. I've been through recessions, I've been through the.com bust, I've been through the SNL crisis, the financial crisis, the 2008 recession. I've seen bear markets, bull markets, all kinds of things. Here's the thing. I'm still here. I'm still here. And through that process, not only did I gain knowledge, in other words, I learned stuff. I gained wisdom, because they say that knowledge is gained through time, but wisdom is gained through experience. And what I want to do is kind of walk you through some experiences. Twelve lessons that I wish I had at 32, but I do have now at 62. But I want to give them to you no matter what age you are, because I think they're going to change the way you look at things. And the first one's an odd one because you could look at it and go, what is he talking about? I'm going to explain it, all right? And I'm going to jump to my iPad to do this. But number one is that sequence matters. And what I mean by this is this your sequence of priorities, okay? In other words, there is a certain sequence in which you do things. It's like a recipe. You have the ingredients to the recipe, but if you put them in the wrong order or in the wrong doses, the recipe doesn't come out. It's the same thing with your professional career. It's the same thing with your financial. It's the same thing. It's the very reason that I created what I call the wealth priority lab that I talk about in my book, building your money machine. That literally gives you the sequence of what you do with every single dollar when it comes in. So you have the recipe to do the right things. Give you a for instance. When I was first building my career, I was building my career in the valuation industry, where I was valuing businesses, buying and selling businesses, and testifying as an expert witness. But no one would hire me. I needed to get hired. But in order for them to hire me, I needed to market to them. I needed to get out there and try and network and market and all that stuff. Now, this is going back prior to the technology we had today, because it was in 1990, 1991 when I was doing this. So the thing is that if I started marketing first and I got people that said, hey, I want to hire you, the problem was, I didn't have the knowledge. I didn't have the skill. I didn't have the understanding to deliver the product or the process or the results that they were looking for, which would have been a problem. So the sequence in which I did this, the priorities in which I did this was first skill development, education, certifications, knowledge, and trying to build it. So I literally, I would sit up late at night and I would study Kate's law, I would study different texts, I would study finance, I would study the industry chronicles and mags and all that stuff to skill up. Then I went out there and marketed. So when I did get high hired, I could get them the results and beyond, because then it perpetuated and created a distinction in the marketplace. The fact is that by doing it that way, by having the sequence of priorities right, I was able to build an international reputation that built a practice and a firm that allowed me to flourish. And so that's the first thing, is to start asking yourself if I want to do a lot of things, maybe. I want to build. I want to build wealth. I want to understand how to, how to manage money. I want to become financially free. Well, what's the sequence of priorities? Okay? It's probably, believe it or not, not investing. It's probably skill development. It's probably knowledge development. It's probably you getting my book, for instance, learning the rules of the road, learning the things that you can take with you. Because the things that I teach are from, from years, decades of wisdom that have come through mistakes that have cost me a lot, that don't need to cost you. But I've also come from working with clients and people such as yourself to do that. So understand the sequence of priorities because it matters. Now, that leads me to number two. Number two is really about, it's called joy points. We need to have joy points on the journey. What I mean by it is this, is that we live in an environment today where we are getting bombarded with marketing messages, where we are getting bombarded with things that we can buy. Temptation after temptation after temptation. And there are those in this personal finance space that tell you, hey, you got to live on Mac and cheese and corned beef hash, okay? Nothing wrong with Mac and cheese and corned beef hash, but a diet of that is going to kill you. All right? And until you get, get to where you want to go, then, then you can start enjoying. Here's the thing that I know. If you don't enjoy the road to financial freedom, if you're not enjoying the path to financial freedom, you're just not going to enjoy the destination of financial freedom. And so I think it's really important for us to find the things that actually matter to us. And this is what I call the joy points. These are long term, sustainable joys. These are not momentary pleasures. The things that you might buy off of Instagram, the things that you might buy on a whim, are typically momentary to pleasures. But real, meaningful joy points are the things that last over time. Like, for instance, my wife and I, we love to travel, and we travel well. We don't. You know, we travel not in the lap of luxury, but we certainly do it nicely. Okay? And we know that that's one of our joy points. We know that that is what gives us joy. That stays with us because we're creating memories. We are getting closer. We are living together and doing the things that we want to do. So we make sure that those are priorities. And so one of the things that I think is important is to realize, like, you hear the saying that money doesn't buy happiness. So if we're going to be so focused on making money and saving money and building wealth, but we're not finding the. The joy points to give us the happiness along the way, God has a miserable existence. Got a great bank account, but. But what do we have to show for it? Okay? And I've watched a lot of people that have wealthy bank accounts, but they end up with bankrupt lives. I don't want that for you. And so joy points actually are things that you want to make sure that you work. And I say have two to three joy points that you're going to prioritize on your financial journey, so you're enjoying it along, along the way. That leads me to number three. Number three is saying no as your friend. Okay? Saying no. Here's what I realized is resources, time, it's limited. And our ability to do things are limited. So we have to prioritize the things that actually matter to us to allow us the opportunity to do the things that really, really move the needle for us. Here's how I figured this out is. And it took me a while, but when I got diagnosed with the cancer, I realized, oh, my gosh, you know, when they told us all that time, all that time that our days are numbered here, they were right. See, I didn't take it seriously until mortality smacked me in the forehead, until the doctor said, hey, you have cancer. And you know what? Your life is on the line. And I said, oh, they were serious. We don't have forever here. And so here's what I realized, is that if I have a certain number of slices of life, every time I say yes to something, I give a slice away. So I'm going to be more discerning with saying yes to things. And the way I discern it is that can I ask myself, can I give it my all? Can I give it 100% of who I am? Can I pour into it everything for the moments that I'm there when I say yes? And if the answer is no, I don't do it. If the answer is yes, then there's a second question. And that second question is, will the other side pour as much into it? So if I'm going to pour everything into it, I expect nothing less in return. And if the answer from the other side is yes, then this makes sense, and I go ahead and do it. So no saying no as much as some people say, oh, I don't want to say no, it's boundaries. It's the bridges to doing the things that create a life that is meaningful rather than walls to keep things out, I look at as the bridges to do the thing, to creating a life that's meaningful. So I look at it through those eyes. That leads me to number four. And number four. Okay? Budgeting is not deprivation. Too many people look at budgeting as if it's like a diet. I can't do this. I can't do that. I can't do this. But you know what? Budgeting, or cash resource planning, as we call it, is actually permission planning. Permission planning. Because now all of a sudden, you're getting a chance to look at things in a way and say, wait, I've already planned for this, and therefore I'm okay. So if you're going to spend money and it's in the plan, it's not deprivation, it's permission. So it's important for us to look at it through. Through those eyes. Once I started to understand that when I create a plan, I now know in advance what every dollar is going to do for me. Whether it's building wealth, whether it's paying a bill, whether it's putting money aside for other things, like putting my son through college when he was younger, those kinds of things. Then I didn't have to think about it. There wasn't temptation, there wasn't problems. There weren't the things that would pull at things. Because I just look at the plan. It says, not in the plan, but this isn't the plan. So I would put things in, say, I'm going to go out and have a nice nap on the table. It's going to cost me $200 and I plan for it. It's there.$200. Now when I go spend it, there's no guilt, there's no shame. I had the permission to do it. I gave myself permission. I went and did it. I did it gladly. I did it without remorse. I did it openly. And I said, this is what it's supposed to do. So we need to look at the planning process as a permission process, a living process, an assignment process, and not a deprivation process. Okay? Now that leads me to number five. And number five is to avoid destructive debt. Destructive debt. Now, many of you know, if you followed me for any length of time, I don't believe that all debt's the devil. Some people believe that any kind of debt is the devil. Now, at some point, we want to be completely out of debt, but. But the reality is, is that, that there is productive debt and there's destructive debt. This productive debt is debt that is going to increase your cash flows or wealth over time. It could be buying a rental property with a mortgage. That's constructive debt. If you do it right, you can still get in trouble with it. Doesn't mean that there isn't risk involved. You do it right, you can. You get yourself a rental property. It's got debt against it, but it's cash flowing. It's increasing your cash flows and you're. And building that money machine that we talk about. It could be financing a piece of equipment in a business that, that is going to make your business more efficient, more effective, more more productive, those kinds of things. But destructive debt, on the other hand, is for consumables. It's for stuff. It's for momentary pleasures. It's for things that I can't afford. If you have to finance a vehicle, a car for 72 months or longer, or even over 36 months, if you've got to go more than three years on a car, you can't afford it. It sounds bad, but that's destructive debt. You're financing a depreciating asset. If you're financing lifestyle choices like, like luxury vacations, that you can't afford that, that's destructive debt. And if you're carrying the balances. So I want to avoid that, because here's what's happening, is that destructive debt is carrying with it two personality characters. Actually, all debt has these two personality traits. One is that it all costs and it costs. Interesting. And if you're carrying balances on cards, on debt that is charging you interest, and I've seen as low as 11% on the uncertain loans, but as high as 30% on credit cards, that's destroying. You can't get financially ahead with that. Okay? The other characteristic of personality trade it has is it stresses, it stresses your finances and it stresses your psychology. So avoiding destructive debt is always, always something that is going to help you. Now, I didn't at all times, I got into credit card trouble. I got into credit card debt and all of that. So leads me to number six, y'all. This one's a big one, okay? Get on the field. You can't win the game of wealth from the sidelines or from the stands. You have to be on the field playing the game to win. You can't save your way to wealth. If you took, I'll just give you some, some numbers just to make it hit home. If you took$5,000 a year from age 25 to 65, that's 40 years, okay? That's 40 years, that's $200,000. And invested it at 8%. Okay.$5,000 a year for 40 years, you're going to invest $200,000. At 8%, it will accumulate to be $1.5 million, approximately. So one and a half million dollars on $200,000 invested, not too bad. And it took you 40 years to get there. I get it, okay? But if you are overly cautious and you decided, well, I don't want to get on the field, I'll sit on the sidelines, and you sit on the sidelines, and you put it in a savings account at 2%. Okay? You put it on a savings account at 2%. Then instead of having a million five, you'll end up with a sum total of $314,000. Okay, on 200,000, you barely got 50% on your money over 40 years. You cannot save your sales, save your way to wealth. You have to be on the field. So you got to get off the stands, off the sidelines, on the field, play in the game, get in the game, stay in the game, and really, really stay in if you truly want to win. Okay? I made some mistakes. I got out of the game. I sat on the sidelines. I sat in the stands for well over a decade in one situation. And I did it because I was not knowledgeable and I was fearful, and it cost me a lot of money. I mean, in the millions it did when I did the math on it. So I don't want you to do the same. I want you to get in the game. If you're not sure how to get in the game, follow my process. Follow the things I've written about in building your money machine and that and my stuff. It's the recipe to get you in the game and do it the right way. Okay. That leads me to number seven. Number seven. Number seven is about. The value of education is on you. Is on you. Okay. And you go, what? Huh? What? Really? Yeah. The value of education is. Is on you. Not the institution, not the profession, not anything. The question you gotta ask yourself, if I'm gonna go through a formal education or an informal education, whether I'm going into a trade school or I'm going into a coaching program, a mastermind or I'm buying a course, whether it's a valuable investment or not, it's not about the course. Now, I'm assuming that it's good quality, okay? But it's not about the course. It's not about the degree, not about the education. Okay. It's about what you do with it. So the value of it is, is on you. Not the course, not the coach, not the education. Now, again, I'm assuming that the course, the education, and the coach are good if they're not. Different discussion. But the fact is, is that we extract the value of the education that we get into, whether it is, like I said, masterminds, courses, degrees. I could have gotten my degree. I could have gotten all these designations and certifications that I have and then never used them for anything. Are they valuable? Yes, but not in my world, because I hadn't used them. But when I got them, I used them. I capitalized on them. I used them in a way to give them the value that they deserve. It's the same thing with you. So if you're going to join into something or do something, then you have to bring your game to the education to make it valuable and not expect the education itself to be a value. All right, number eight. Number eight. Richness. Rich. This is a big one that I talk about a lot is more important than wealth. Okay. And what do I mean by that? Here's what I believe. I believe that wealth is actually just a statistic. It's a number in a bank account. It doesn't really matter. And like I said earlier, is that you can have a lot in a bank account and live a bankrupt life. Great. You can pay your bills, great. You can have luxury vacations, great, you can have planes and boats and all the stuff. But if you have no health, if you have no relationships, if you have no positive experiences, you're not really experiencing life. But you're on this treadmill all the time and chasing the dollar. Chasing, chasing. There's no richness in your life. There's no great experiences and feeling richness is how we live our lives. And the reason we need the wealth is to allow us to have the choice of how we want to create the richness. And it's not about stuff. It's not about accumulating. It's not about anything. It's about how you experience it, who you experience it with. I get a chance to spend time with some amazing, amazing people in some cool places. My wife and I are going to Vienna and Budapest, and then we're going to Italy, and we're spending time with some amazing people, doing amazing things, experiencing cultures and people, and giving back and doing all of that. That's the richness. Now, the wealth has given us the opportunity to do it in a certain way, but it isn't the wealth alone that creates it, it's the richness that matters. So one of the things that becomes important is making sure that you know what is going to bring richness to your life. And the key there is your life, no one else's. What does your rich life look like? Is it a tent? Is it a yacht? Is it some penthouse suite? Is it traveling? Is it road tripping? Is it giving back? What makes you feel rich? It's not in the bank account. All right, number nine. Number nine. Beware of something that I call expectation association, okay? Beware of expectation association. What do I mean by that? It will destroy your finances. It absolutely will destroy your finances. When we make decisions based on the expectations of others, then we are walking a path that isn't of our own design. So whether it's based on the expectations of your degree, the expectation expectations of your professional path, your licenses, your parents, your kids, your society, your church, your temple, all of that, if we are just blindly living into those expectations, you got to ask yourself, whose life am I living if I am allowing the expectations of the media, the social media and what we see in marketing and all that to define what good is, oh, I need to get that bigger car, I need to get that bigger house. I need to get. So now all of a sudden I'm spending stuff that I look at and go, its not really what I want. I had a conversation with someone from my publisher, and he said to me, I dont know that im ever going to be able to afford house. I said, really? Why? He says, well, its just the interest rates and home prices and all of that. And I said, well, let me ask you something. Why do you want a house? And he responded back and says, well, its the american dream. I said, you know what? Youre right. It is the american dream. But my question is, is it your dream? And he stopped and he says, I hadn't thought about it that way. Here's the thing. If we're not living our dream, we're living the american dream. Our parents dream, someone else's dream. Expectation, association at work, eroding the quality of your life, the experiences, the richness and your finances in the process. All right, so that's, that's number nine, number ten, number ten, number ten is making, making more. I want to say this, making more money, more dollars doesn't, doesn't mean spending more, all right, this is big. All right? They call it lifestyle inflation. They call it lifestyle creep. Bottom line is this, just because you make more doesn't mean you need to spend more. I make more? What am I going to do? Buy a bigger house? We've got a good sized house on the beach. It's my wife and I, two dogs. Do we need more? No. Could we get more? Absolutely. But why? So there's no reason for us to just upscale our life. Because we can. So if we truly want to build that money machine, if we truly want to do that, it goes back to, hey, what is your vision for your life? What do you really want? How do you want to experience it? What is going to give you the richness? What are the joy points that matter to you? You see the theme there? You. You define it your way. A financially free life is a life of choice, a life of options. I get to live my life the way I live, by choice. I do these things not because of work, because they're a choice, because they bring me joy. Because I get to serve you. Because I get to see you glow. I get to see you grow. I get to see you live your dreams. That gives me joy. And I get to do it by choice. And so I look at it and say, let the machine grow. We're living our life. We have pretty well everything we need, everything we want. Why would we expand our life to put more stress, strain and just spend more? Because we can. So watch that. That whole idea of, if I make more, I can spend more. No, maybe not. Remember, your ultimate purchase. Your ultimate purchase in life will always be your freedom. Freedom. So the faster I can build the money machine to give me the life that I want, the faster I find myself in a life that is a get to life and not a have to life. A life that's built on choice and not demands. Okay? Leads me to number eleven, which we kind of talked about already, and that is make sure that you're living your dream. No one else's. No one else's. And you know what? You don't have to explain it to anyone. It sounds rough, but I'm serious. You're here to put your. To live your life. I remember when my son was graduating high school. He was getting ready for college. I got him a tutor for. For math. Now, he was getting a b plus in math, but he wanted to get an a. And the tutor in that first meeting was asking questions to get an understanding of what he wanted to do in life and everything. And at the time, my son wanted to go into film school and all of that stuff. And then the tutor looks at me and he says, what do you think, dad? I go, what do you mean? What I think it's his life. It's his life. He gets to live it. As long as it's moral, legal, and not hurting anyone. He gets to live his life his way. I don't have the right to try and relive my dreams that I chose not to go after or I didn't get after or anything through him. So he gets to live his, and I mean it, with the greatest amount of love possible. But you're here to live your dream. The last thing we want to do. Bronnie Ware wrote a book, the seven regrets of dying. One of the biggest regrets of people that were in their last day. She was a hospice nurse, so she's with them in their last moments of life. One of their biggest regrets was the fact that they realized they didn't live the life that they wanted to live, and they lived someone else's. I don't want that for you. We want a life of choice, and the choice is yours. Leads me to the last one. And this is important. Okay? Twelve is. Mistakes happen, y'all. I have made a ton of mistakes, and I've lived to tell about it. Mistakes happen. Now, you can sit back and beat yourself up. You can blame yourself. You can destroy yourself. You can destroy relationships, you can destroy your health because you made a mistake. But how does that move you forward in life? How does that allow you to get on in life? See, here's what I realized, and look, let's take one of my biggest mistakes. I got involved in an investment in 2005 that turned out to be a Ponzi scheme. Wiped out one third of everything I had, one third of it gone in a decision, in a choice. And we're talking about well into the seven figures, me and two friends, we lost over four and a half million dollars. It trusts me. I was beating myself up. I was. And as a. As a. As a CPA, as a financial guy, as someone who advises people, everything, trust me, I was struggling with this. I was in bad shape because I'm going, you're a loser. You're an idiot. How do you let something like this happen? But here's what I figured out. If I stayed there, first off, y'all, and I would not be having this conversation. I would have never written my book, building your money machine, or even my first book. None of that would have ever, ever happened. It isn't about the fact that the mistake happened. It's about the acceptance that it happened. See, it wasn't until I accepted my role in the Ponzi scheme that I was able to heal and move on from it. Now watch the words I used. I accepted my role in it. Yes, this guy was a thief. Yes, he was a con man. Yes, he went to jail. He belongs in jail. He destroyed lives. But I had a role in it. I can't say that I didn't have a role in it, but it isn't to say that's my role. And now I take the blame, because blame does nothing but put your feet in concrete where you can't move. It allows you to stand still so you can beat yourself up and not feel good about it. But when you say, this was my role, and now with that acceptance and that awareness, you have the opportunity to say, what did I learn from it? What did it give me, and how can I move that forward? And that's what it did. The rules that I teach now to people, the things that I write in the book, all came, a lot of it came out of the Ponzi scheme, the lessons, and said, look, if I. It cost me well over a million dollars to learn those lessons. There's no reason for you to spend the same amount of money to learn them. You can learn them by buying the book. You can make sure that you stay safe. That's, that's the gift of it all, is that once I figured out my role and I was aware of it and I was willing to accept it and I was willing to move forward and take the lessons from it, the next step was, who do I teach it to? So it never happens to someone else. But know that mistakes happen. And as cliche as it, it may sound, they happen for a reason. And that for whatever reason, wherever you are financially, wherever you are right now, your, your age, your stage, your circumstances, and all the wish I would'ves and could'ves put them away and just say, this was my role and I needed to travel this journey to get here so I could be prepared for what's next. That's, that's the. That's all it is, all right? Because mistakes will happen. We're human. I still make mistakes. I'm gonna make. If you don't think that I've made bad investments, I've made bad investments now, the losses from them are very little if I lose, and I usually go into investments with certain exits that allow me to preserve myself because I've gotten smarter. And that's. So this is like when you talk about the lessons that I know at 62 that I wish I knew at 32. I would have gone into things a whole lot differently at 32, even at 22, 42 all along the way. That's why I did this episode is in hopes that I can shortcut it so you don't have to learn the lessons the hard way, so you don't have to stub your toes, skin your knees, break your nose, do the things that I went through, that you take away some of these twelve lessons and no matter what your age or stage of life, that they give you something to give you a little more wisdom from my experience, so you don't have to get the wisdom from your experience. I hope that you found this a value. If you did, let me know which point, which one of the twelve really kind of resonated with you and let me know what your thoughts are. All right? And until we get a chance to see each other in another episode or on the road or out there, as I'm speaking, always, always strive to live a life that outlives you. Cheers. 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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