246 - In today’s Freedom Focus Photography Podcast, join Nicole Begley as she chats with financial expert Mel Abraham to break down the ins and outs of financial planning for creatives.
In this episode, Mel demystifies the process of building your own "money machine"—a system designed to cultivate financial independence and long-term security.
This conversation dives into why it's crucial for photographers and other creatives to start the habit of saving early, even if the amounts are small at first. Mel provides practical advice on how to manage money effectively, plan for the future, and use smart financial strategies to build wealth over time.
Tune in to transform your financial fears into a foundation for freedom!
What To Listen For:
The Concept of a Money Machine: Learn what a money machine is and why every individual, especially entrepreneurs, needs one to ensure financial independence and security.
Personal Finance Management: Strategies for photographers and creative professionals to manage their finances more effectively, focusing on investment and savings habits.
Transition from Earning to Building Wealth: Mel explains the shift from relying solely on income from work to creating systems that generate enduring wealth.
The Psychological Aspect of Money: Understanding the emotional relationship with money and how to make financial decisions that align with personal and professional goals.
Long-term Financial Planning: How to approach financial planning with a long-term perspective, ensuring that decisions made today positively impact future financial stability.
Resources From This Episode:
JOIN THE PARTY:
246 - In today’s Freedom Focus Photography Podcast, join Nicole Begley as she chats with financial expert Mel Abraham to break down the ins and outs of financial planning for creatives.
In this episode, Mel demystifies the process of building your own "money machine"—a system designed to cultivate financial independence and long-term security.
This conversation dives into why it's crucial for photographers and other creatives to start the habit of saving early, even if the amounts are small at first. Mel provides practical advice on how to manage money effectively, plan for the future, and use smart financial strategies to build wealth over time.
Tune in to transform your financial fears into a foundation for freedom!
What To Listen For:
The Concept of a Money Machine: Learn what a money machine is and why every individual, especially entrepreneurs, needs one to ensure financial independence and security.
Personal Finance Management: Strategies for photographers and creative professionals to manage their finances more effectively, focusing on investment and savings habits.
Transition from Earning to Building Wealth: Mel explains the shift from relying solely on income from work to creating systems that generate enduring wealth.
The Psychological Aspect of Money: Understanding the emotional relationship with money and how to make financial decisions that align with personal and professional goals.
Long-term Financial Planning: How to approach financial planning with a long-term perspective, ensuring that decisions made today positively impact future financial stability.
Resources From This Episode:
JOIN THE PARTY:
I am Nicole Begley, a zoological animal trainer, turned pet and family photographer back in 2010. I embarked on my own adventure in photography, transforming a bootstrapping startup into a thriving six-figure business by 2012. Since then, my mission has been to empower photographers like you, sharing the knowledge and strategies that have helped me help thousands of photographers build their own profitable businesses.
I believe that achieving two to $3,000 sales is your fastest route to six figure businesses that any technically proficient photographer can consistently hit four figure sales. And no matter if you want photography to be your full-time passion, or a part-time pursuit, profitability is possible. If you're a portrait photographer aspiring to craft a business that aligns perfectly with the life you envision, then you're in exactly the right place with over 350,000 downloads.
With welcome to the Freedom Focus Photography podcast. Hey everybody. Welcome back to the Freedom Focus Photography podcast. I'm your host, Nicole Begley, and today I have a very special guest. I have my friend Mel Abraham from the Affluent Entrepreneur, and he is, oh my gosh, just like CPA money guru, all the things he's been in the mastermind that I've been in for the past several years.
And when any of us have a question, it's like, all right, what would Mel do? Well, Mel, welcome to the podcast. We're so excited to have you here. Oh my God, Nicole, thanks for having me. This is gonna be so much fun. Oh my gosh, I love it. I love it. So I love chatting money and finances,
and I realize that makes us a little bit odd because most people like wanna put their head in the sand and like, oh my gosh, you can't talk about money, and that's just rude to ask about money. And they have so much money, garbage. But I think the best way that we can help everybody is to bring it out in the open and talk about it.
So I'm so excited for our conversation today about money machines. It's so cool. Well, first off, I'm glad you you mentioned this because here's the thing, if you look at statistics right now, if you look at statistics right now that 72% of people say that they have stress around money, 22% say it's extreme stress. Well, yeah. Hold on a second.
If we got three quarters of the population stressed and one quarter of the population extremely stressed, why are we not talking about it? I mean, I mean, we gotta talk about it. We cannot solve this problem without having a conversation around it. Yeah, a hundred percent. Yeah. So, so, so I'm glad we are. Yeah, for sure.
So my audience here, we are photographers, and by definition, a lot of us are very much in the creative realm and numbers, you know, let alone get photographers talking about pricing, which I love to do. But then to take it a step further and start talking about like, oh, personal finance, oh, retirement, oh, taxes.
Like all of those. And like, it's like you can clear a room of photographers really fast by just talking about this. So I hope you guys are gonna stick around because you're, you're, it's gonna be good when you do. One of the things that you talk about, Mel, all the time though, is building your money machine. In fact,
you have a book coming out on June 11th that I am so excited for, but what, what is a money machine? And does everybody need one Look, everyone needs one. And we don't talk about it. We actually, so here's the interesting thing. There was a time in our history where, where our companies built the money machine for us. It was called a pension plan,
where you would work for decades for the company. And because of your loyalty, they turned around and said, we will give you income for life. Okay? But then people started living longer, and so they said, whoa, whoa, this is getting expensive. We can't do this for long. And so they came in and said, we're not doing these pension plans anymore unless you're military or government or something like that.
Or in a unique situation where they still have it. So they substituted these things called 4 0 1 Ks, IRAs and other retirement plans to take care of you into those, into those years. 'cause, and, and the difference is that what they did is they said they took the responsibility for that future income and dumped it in our lap, but didn't give you the education,
didn't give you the training, didn't give you the understanding, and you went from one decision, am I gonna work here or not? Because you were in the pension plan, like it or not, to making a bunch of decisions that you weren't equipped to make. Do I contribute? How much do I contribute? Where do I invest it? How long do I invest all these decisions?
And we don't know how. And so, but, but what is really relevant and prevalent is that now it becomes our responsibility to create lifetime income. And many in this kind of a, a space. And, and in many other situations where you're solopreneurs and entrepreneurs, the mistake we make is we think that our ability to earn is our wealth. And it's not.
It's called an earnings machine. We we're raised this way. Get a good job, build a good business, make money, make money. We're told that. But it doesn't matter how much you make there, there's no freedom in it. There's no legacy in it, there's no independence in it. There is no wealth in it unless we built the second machine that no one talks about.
And that is a money machine. Yes. And so what we need to understand is the business side of our world is solely meant to give a solution, a service, and an impact to those we get a chance to serve and return for cash flow. That's it. It's not for freedom, it's not for control, it's not for any of that.
The freedom and the control is what we do with the cash flow by building the money machine. And so everyone needs it. If, if you truly want to find that freedom, this is the thing that's gonna allow you to live a life by choice and not by need. Yeah. I, one of the things that strikes me when you're talking about this is,
as a photographer, we are all very much tied in a surface for payment ki or a service for payment, like a time for payment thing. It's really hard to scale a photography business unless you start to hire additional shooters and things like that. But for the 99% of photography business, it is one person doing a service, getting paid for it. And so at some point it comes that maybe you can't do that service anymore.
Yeah. Either by choice or by need by force. You know? So having this machine in the background that can help sustain you short term, but also then looking long term retirement, I think a lot of people fall into that illusion of, oh, you know, I'm 40 retirement's 25 years away, or I'm gonna do this job forever 'cause I love it.
So what do you say to those people? So, and I hear this a lot, especially like, because I, I will do a lot with youth, um-huh? And, and in fact even had this conversation with my son who's now 33, but I was having this conversation with him at 10 11 and he's like staring at me going, I'm,
my kids are my, my, my buddies are playing video games and you want me to play money games? Yeah, I do. Here's why you believe you have time, but time is the greatest wealth creation tool you have. There are four things that will drive your wealth. And you, these are the only four things you gotta control your income stuff that comes in the,
the, but the income isn't, well, the income's made up of what comes in and what goes out. So the net of those. So we gotta, we gotta deal with that. Now, the net of that, the bigger number that is more important is how much of that are we keeping? How much of that are we investing? So the,
so it's your, your savings rate, you're investing at the percentage. So, so those are the two biggest numbers. Then there's this idea of, well, what do I invest in the returns? But we'll put that aside for a moment. And then this, the fourth thing is time. Now I can't control time. If I could control time,
I'd be doing a different business, but I can't control time. But I can control the present moment. And the present moment is the most valuable moment for investing. And here's why I'm saying that. Think about this. Anyone that puts a dollar away at 20 years old, that dollar turns into $88 by the time they're age 65. So 88 times I had a kid,
I was just, I was just on, on a call at one of my live q and a calls. This kid that I met before, he, he's going through some of the training and he, he was 17 when I, when I got next, he was 16 and a half. He's now 18. He just turned 18 last month. And he says to me,
Mel, I I just, you told me to open up a Roth and we can talk about it, but, but I opened up a Roth and I funded it. I wanna know what do, what do I invest in? And I said, hold on a second 'cause I'm gonna use 18. How much did he fund a Roth with? You know,
your maximum is 6,500 last year, 7,000 this year. I'm thinking he might have put a thousand bucks away. He says, no, I fully funded last year and I already funded this year. I said, hold on a second. At 18 years old, you just put away $13,500. And he said, yeah, now it, it certainly, it's helpful 'cause he's living at home with,
with, with his parents. But I said, well, let's just do the math because of time that 13,500, if he did nothing more, would go up 108 times, 108 times, he's already a millionaire. And so, so the point of this idea of saying, well, ah, I don't have time and, and, and I'm on a couple it with something else.
So I said, at 20, it's 88 times, you wait five years, it drops to 44 times. You wait another five years, it drops to 23 times. Hmm. Now it's nothing to sneeze at, but you see that now is the most important time because we're losing the power of time over time. And then I hear this from, from folks along the same way as well,
well, when I make more money or I'm not making enough money to do this, so I I, I like, I can only put away $10. Okay, here's the thing. Your ability to create wealth is less about the money and more about the behaviors. A hundred percent. I don't think, I don't think that anyone has a money issue.
And I know that it's confronting when I say this, I think everyone that feels they have money issues are confusing it. What they really have is money symptoms. They're symptoms of habits, choices, decisions, and behaviors of the past. And when we change those habits, decisions, choices and behaviors, we get a different result. And so if truly wealth creation is a behavior and a habit,
then the, what's more important than the amount you put away is the habits you're creating and putting it away. So if all I can afford is $10, now let me put $10 in because I'm exercising the muscle, then I'll get to 20, then I'll get to 40, then I'll get to a hundred and I'll get to a thousand. But if we are trying to wait until we get into where I might be able to put a thousand away,
but we haven't developed the skill, we haven't developed the habit, we haven't developed the behavior, it's much harder to do it because we're allowing lifestyle to creep in and things to do that. So, so at the very beginning, understand that time is most important. Today is the most important dollar you can put away. Forgetting how you invested and all that stuff.
Just making the sheer decision that you're gonna make investing a priority today is huge. And do you recommend the people when they do that? Because I think there's two steps, right? They, they get this and they're like, all right, yeah, no, I'm going to do it today. But then maybe they haven't done it. So then they get like into the weeds of,
oh my gosh, well what kind of, you know, account do I open? Where do I open it? What the heck do I invest in? How do I connect the two? And then they just like, just shut down because there's so much new information they need to figure out. Yeah. So if somebody has now just said like, all right,
today's the day I'm gonna start it, what's like the easiest, most straightforward, like just three step process to like start? So just first get it outta sight outta mind. Yep. So the easiest thing to start is just to get a high yield savings account. You can get that at typically any brokerage house. Some of the banks have them, you have 'em online like,
like Wealthfront and they're paying 5%. And All I'm doing is I'm parking money there for now until I decide where it's gonna go. Okay? But it's getting it out of the way and, and then set it on automatic. If you know that you can do a hundred dollars a month, then you tell your bank, I want a hundred dollars a month to go to this high yield savings account every single month.
Every single month. And that what that does is it's developing the habit while you're skilling up to say, okay, when I'm done, let's say in a year's time that a hundred dollars a month is $1,200. Now I can turn around and say, okay, how do I want to invest it? And where should it go? Because I can now turn around and say,
okay, do I wanna put it into a, an ira, a Roth ira, a 401k or anything like that? But if we try to solve all those problems upfront, you won't, you won't move. Yep. Because you say, I don't know enough. I don't know enough, you know, enough to, to put it aside and we can decide later exactly how to invest it.
But if I haven't saved it, to put it aside, and the new good news is that in current times, we can get five, 5.5% on a savings account, which is actually not bad. Okay? It's not, you know, so we can do it and park it temporarily until we decide what's the right thing to do. Because if we then start to look at hierarchies,
and we can get more into the weeds of this, what I tell folks to do is, at the very beginning, I want you to, let's just talk about general money management and safety. So my job first is to make sure you're safe. Second is to help you build the mountain. Okay? So some of the things that I do at the beginning is to make sure that you're not gonna put the car in the ditch.
You're not gonna end up, you know, hitting the tree. And so one of the first things I want everyone to do is to make sure that they have $1,500 set aside or one month's expenses. This is not your emergency fund. This is a, an absolute, you know, hey, I don't wanna break the class. You've got 67% of people cannot sustain themselves without going into debt.
If they got an a thousand dollars unexpected expense, a thousand dollars unexpected expense could be a deductible on a car, car insurance, medical insurance, things like that. I don't want us putting those things on credit cards at 20, 28%, 30%. So you might look at it and go, alright, let's put 1500 bucks away. High yield savings account.
Just set it aside for it's, I call it a comfort fund. And you might go, well, how do I get that? I don't know about you, y'all are photographers. Okay, I know me. If I went right behind me and don't tell my wife 'cause she'll make me clean it out. And I went into that closet with all my technology and all these other gear that I have,
I could probably put it on Facebook marketplace and get 1500 bucks. Okay? And so we might have stuff that we could literally sell, get past the $1,500, and now focus on the next phase of this. We call this the wealth priority ladder. And that is eliminating destructive debt while creating your peace of mind fund, your emergency fund. Destructive debt is things that we we're putting on credit cards for consumables for lifestyle.
And so, so we wanna make sure, especially in a high interest rate environment, that we're not doing that. If you need to get yourself outta debt, say you say, I'm, I'm carrying balances. I gotta get outta debt, I gotta get outta debt. I can, we can make sure that we link it up to 'em. It's totally free.
It is an Excel spreadsheet. I know spreadsheets, creatives doesn't work well together, but it's real easy. Gives you some, I give you a short training for it, but it is a, it's a debt breakthrough calculator. You'll put all your debt in, you'll put all your payments in, you'll put all your interest rates in. It will calculate the best way to pay it down.
And you just follow the payment plan and get yourself outta debt while you're putting money away to build your emergency fund. And I want your emergency fund or your peace of mind fund, as I call it, in a high yield savings account. So it's earning something. And, and so that's the foundation that's there to keep you safe As a self-employed person.
What, how big is that emergency fund? How many months? So it, you know, it really depends. Now you'll hear people say three to six months. I actually think, especially for us, a solopreneur, self-employed person, I think that's too short. Okay? If you are the primary breadwinner and you have a family, it's way too short.
Okay? Because if there's a hiccup, if there's a problem, if you know, or you go through something like I went through a a, a medical situation that took you out of, takes you out, you know, the work that you all do is, is physical. You gotta move. And if you can't and you're out of it, then what do you do?
And you're the so in, so that's why if I look at it and say, I gotta a family, I'm the sole breadwinner, then I'm gonna extend that out. I'm gonna push it to 12 months or more to give you the runway. Now, I will also say for those of you that are the primary breadwinner, there is, and I am not one that's,
I don't sell insurance, I don't sell investments. But I will tell you, you're the primary breadwinner and you're in that kind of an occupation and, and everything. And you have people depending on you. I do want you to consider looking at long-term disability insurance. I have one, I have a plan that I've had for years, for decades. And when I could not work it,
it paid me well into the six figures to not work to heal myself. And so they don't need me selling insurance. But you just might wanna look at it because, and I say long term, mine's a 90 day wait period. You can go 90 days, 120 days, but that's what the emergency fund's about. It gets you to that little gap.
Gap and then the insurance kicks in and covers you until you're on your feet and back in the game again. So those are the things that will keep you safe. Then we can start looking at investing and everything beyond that. Because the, the challenge is if we start to invest without a good foundation and we're not necessarily safe, and when things happen,
what do we do? We pull the money out of what we've invested, we lose all the groundwork that we've done and plus have penalties and plus the penalties and taxes. Yep. So, so that's, that's how I would start this is, is very, very basic. Don't get complicated. Make sure you're safe. Make sure you have the liquidity in place.
Now we can talk about investing, talk Investing, I love it. And, And then, and then we can build from there. Awesome. Now we have, say we have two camps of people. Like we have the people we just talked to here, they're like, oh my gosh, totally overwhelmed just at the beginning of this investing retirement planning journey.
And then maybe we have the other entrepreneurs that I'm like, yeah, no, I'm at it. I've got my Roth IRA, I've got, you know, old 401k for my old corporate job that I rolled over into something. Like what do you say to them? Maybe are there some special opportunities that we have as entrepreneurs that they might consider if you feel like,
yeah, I'm, I've got this, you know, a good handle on some investing and like, am I missing out on any really beneficial, you know, opportunities Yeah. That the government allows us to self-employed? Yeah, so I think that there's a couple things to consider and, and it all, obviously it'll be situational. One, you can go into your IRAs and your Roths,
but you're gonna be limited to seven, 7,000. And if you have too much income, you can't get into a Roth directly. You gotta do what's called backdoor. The, the next step up would be a 401k. Now you can create a solo 401k if you don't have employees, if it's just you and your spouse, but you can actually attach what's called a profit sharing plan on it.
And what that does, the, to the current, current amount that you can put in a 401k is 23,000. But with a profit sharing on it, you can push that up over 60,000. So, so you can push that up over $60,000 if you're looking to really try and fund in as much as possible. Okay. The second piece of this depends on your health situation.
And, and this is, this works for anyone that we've talked to, but a health savings account is probably one of the most magical accounts out there. If it applies, it doesn't apply in my case because I I have too much in, in the way of medical expenses. But a health savings account, the way it works is that you first have to have a high deductible medical plan to qualify.
Therein lies the one of the limitations because, because if you have a lot of medical costs, you're gonna end putting a lot of money out. But let's assume you don't, and you can go in and outta these plans each year if you want. But the point of the high, the, the health savings account is this, I can put money in it,
take a deduction for it and, and save money. Now that money that's in the plan, I can invest and let it grow. Now, if I take the money out of the plan for qualified medical expenses, it's completely tax free. But the beauty in this plan is this. And you need cashflow to do this. Let's say I put $3,000 into the plan and you can put 4,100 for single and 82, 8300 for,
for, for a family. Now let's say I put $3,000 into the plan and I have some medical expenses, but I don't use the plan to reimburse 'em yet. I just keep all the receipts, I take the $3,000 and I invest it and I do that year after year after year. And I have this, these years of receipts of medical expenses and you just put 'em in a digitized folder.
The government doesn't tell you that you have to reimburse the medical expenses every year. Now you're a decade down the road and you've put $30,000 away, but that 30,000 has grown into 150 or 200,000 because it's invested. And now you say, Hey, you know what honey? I wanna put an addition on the, on the kitchen, it's gonna cost us 15 grand.
And you go, okay, so you go back to the old folder of medical expenses, you get $15,000 worth of medical expenses and you reimburse yourself the 15 grand tax free. But in the meantime it grew to 150,000. You put 30,000 and you took 15,000 out, you still have $135,000 in the plan to work from. It's huge, huge, if it applies to you.
And then down the road at age 65, it actually converts to a Roth. So I mean to a, a regular ira. So if you needed the money for anything other than medical at at retirement age, you can take it out. You'll pay the tax then. But you can use this to grow. It's, it's one of the most powerful accounts that we could use as individuals if we want to use a high deductible medical plan.
Yeah. Yeah. I mean it's, you look at it and it's like a trifecta of Oh yeah. Tax advantage saving. It's crazy. Yeah. Yeah. And, and for those that, those that might not be solopreneurs or entrepreneurs, but they happen to work for a company that offer these, a lot of times the company will actually pay for it pre pres salary.
Oh. So what ends up happening is that you get a fourth deduction because you don't pay social security tax on it and, and you don't pay the income tax on it. And so now you've got all of it going on. Wow. Yeah. I didn't realize that. Yeah, my husband works for corporate for a pharmaceutical company, but their plans are all really good.
So there isn't a high deductible option. We're, we're in the same situation. Yeah. Like, I mean I guess I need to not complain 'cause you know, we have good health insurance, so it's fine. But yeah, the, the, the, the self or no, the solo 401k, I had a self-directed version, but the solo 401k was so helpful until now I have a team so I'm no longer eligible for it.
Yeah. But that was able to put, you know, take that 401k whatever it was, 17 I think thousand at the time. It's more now. And then my employer contribution up to 25% of my salary up to, I don't know what the limit was, like $50,000 or something. But it was such a great way to just add on to that retirement savings.
So if you guys are self-employed out there and it's just family member, then you can do that. I think, correct me if I'm wrong, I'm not sure if you know the change with the laws. It is still, you can still do a solo 401k if you have part-time employee only, but only if they've been with you for less than three years.
Yeah. There's a, a vesting qualification period. So you, you can, you could still do it 'cause they're not a qualified party. Yeah. So yeah. So yeah, it is, it is something. And, and the other thing is because now you've seen also the power of time, the more we can front load our investing, the better off we are.
My son's 33, his wife's 30, we've got, they've got two little daughters, young, young, young ones. But they already have, they already have three homes and a multimillion dollar net worth. Yeah. And the reason for it is that they started early, they started building their machine. And the idea behind the money machine is that at some point your money works harder for you than you ever did for it.
Yeah. That's the freedom zone. Absolutely. Oh my gosh. Yeah. There's so many incredible things that you can do, you know, for my kids, you know, even with, we've been putting it in for them, but you know, they can have, even if they just have babysitting money or you know, my daughter has her own little pet sitting business,
so any money that she earns, it's like, oh, we're putting it in a Roth. And my husband and I are just funding that for her. Like letting her keep the money she earns where we're like, Hmm, let's just put a little money in a Roth for you. You know, starting when she was 13. So, you know,
it already has a couple thousand dollars in it that will just compound. Like if you play with those compound interest calculators, it is absolutely mind blowing. It's Mind blowing. It's mind and what you're doing is so good. I did the same thing with Jeremy when he started earning money. Yeah. My son it, but what I did is I said,
I need you to put a dollar in and I'll match a dollar. Yeah, nice. Or I'll match $2 for the dollar. Yeah. So, so he also got a taste of, of that and I'm gone. So I, I was doing matching with him, so I, I forced him to make a decision. So he started to develop the habit also.
But the power of, of our, our youth, you know, we were talking at 18, at 18 years old, it's 108 times, but you start going below that at, at 12 or 13 years old, it's 180, 190 times. So you, you, and the beautiful thing with a Roth for, for those that don't know is that,
so you have two kinds of IRAs. The, the typical IRA that people are used to, when you put money in, you take a tax deduction for it. So you get the benefit today and then when you take the money out down the road, including all the gains, you'll pay tax on it. But the Roth, you don't get a tax deduction today,
but you don't pay tax on it tomorrow either. And the beautiful thing is that if you think about the growth that can happen over decades, and I never ever pay tax on those dollars and your kids that are putting money away at, at 12, 13, 14, 15, 16, 18 years old and that money is gonna grow in, in three digit multiples. And they know that down the road they can take it out and never ever pay a dime of tax.
It's, it's a beautiful thing. Yeah. I mean it's so good that the government actually limits it. So, so that they realize this, They're like, we're gonna regret this decision later. Oh yeah. Oh yeah. But they'll, they'll figure it out later. Oh my gosh. For sure. So, so good. Alright, so we've got people excited.
They're starting to get ready to invest. Do you have kind of a, an estimated kind of ballpark what to aim for, for how much of your salary to save or how to like come up with, oh my gosh, how much money should I even start figuring out how to collect, you know, where, where do we even start? Like where's our target?
So the the ultimate target general target is I want people to put away 20 to 25% of our income. Yeah. Generally speaking, Pre-tax post That now you might look at, huh? Pre-tax income, post-tax. I would, I would prefer pre-tax income, but because you're in a business, there's expenses there. And I totally get that. Yeah. And,
and I, and I get that you might sit back and say, I can't do that now. So I'm not asking anyone to jump to that. Now I'm asking you, get in the game, get on the field, get off the, out of the stands and 'cause we can't win the financial game until we're on the field. So we get on the field and every time we get a chance to boost it up a percent,
we boost it up a percent. Something that I did, 'cause I was very project driven in my business, I would get these projects in that that would pay me, you know, 10, 50, a hundred grand at a time. But I didn't need that. So, so what I looked at is I said, okay, if I got this windfall of money in,
and I said, how much time do I need to take care of my expenses between now and the next revenue generating event? Okay, potential. I, so I, I took that, that, that difference. And I said, okay, I'm gonna take a piece of it to celebrate with because we still need to enjoy it. I'm gonna take a piece of it and set it aside to cover me for this,
this until the next revenue generating event. And then the rest of it, I did what's called, what I call LEAP ro leapfrog funding. So all of a sudden I could, instead of having to put a thousand bucks away or, or $500 away, I had an extra 10 grand. I put it away on top of what I was already doing.
I didn't change what I was doing. I didn't say, okay, I put 10 grand away and now I'm free for 10 months. No, no, no, no, no. It's, that's why it's called leapfrog. And so when we get these windfalls, you want to take a piece and say, how do I put some aside to, to carry me for the,
for the down for the, the next time? How do I take a little piece so I can celebrate and, and feel good about it? And then the, the the line share I was putting towards my future. And what you'll find is those leapfrog fundings can really, really hit. And depending on your business model, you might go through seasons and you sit back and say,
Hey, this is a season where we make a ton of money. And the mistake that we don't do is we don't think about, well, that ha, money has to last us for the next six months or the next seven months, plan it out. And one of the things to think about is this, when we plan our weeks, our days,
we plan it in advance. When we hire employees, say, we're gonna hire 10 employees, you would not come in and bring on 10 employees, put 'em in a conference room, say, welcome aboard. You'll notice that I didn't give you a job title. You'll notice I didn't give you a job description. You'll notice I didn't give you goals.
You'll notice I didn't give you tasks, but I wanna double my business in the next 12 months. Let's have at it. I mean, it's just not, but that's what we're doing with our money, right? And so what we really need to do is give our money. Every dollar that comes into our life needs to have a job description. But that job description needs to be given to it before it ever comes into our life.
When we go to hire someone, we figure out the job description, the, the title, the goals, the roles, all that stuff. And we put it in there to hire the right person to do the right things. But when we come in and, and don't do it with our money, what we fall prey to is social media and temptation.
And we make emotional decisions with our money. And when our emotions and money come up, come together, we make bad financial decisions. And so in advance, you look at it and say, every dollar has a job description. This dollar is for the mortgage, this dollar is for my food, this dollar is for my clothes. This dollar is for fun,
this dollar's for more equipment. And you, you allocate it beforehand. It removes temp temptation on one hand. But the other thing it removes is it removes guilt and shame. Now, when you go out to dinner and you spend the hundred bucks on the dinner that you went out to, you already said to yourself back when that that was what that was for.
And there's no guilt. There's no shame. You're living by a plan. Some people will call it a budget, but a budget feels like a diet. It feels like deprivation. This is a permission plan that allows you to know I'm building my future, I'm living my today, and I've already made the decisions. And so I've removed all the friction of,
of how I'm gonna use this money upfront before I ever earned it. Oh my gosh, yes. So much. Absolutely. It makes such a big difference. 'cause yeah, we didn't even tap into all the, the guilt, shame, emotion that underlies so much of people's money decisions and money management. I mean, that's really the driver for almost everything.
Oh Yeah. Yeah. Wow. All right. So in your new book, the Money Machine, give us a little breakdown of what people can expect to, to learn or go through as they go through this book. Let's just real quickly how this book came about was, I was actually speaking, I was keynoting at a, at a conference, a couple thousand people.
And the promoter of the conference said, Hey, I have a a block of time. Would you be the, the reception was so good, would you be open to answering questions? And I said, yeah. So I, I started to answer questions. I I did that for about 30 minutes and then I came off stage and I was backstage.
She says, you seem in your head what's going on. And I said, there's a lot of fear out there. There's a lot of uncertainty. There's a lot of people that have angst around the money and their future and the economics and all that stuff. And he said, okay. I said, I can't help them all the way I'm doing.
And and he says, so what are you thinking? I said, I gotta write the book. I I gotta, I gotta take, because here's what happened. This was, this book is a culmination of decades of my journey. Now most of it, look, I'm a cpa, but I didn't write it from a CPA's point of view. I wrote it from my,
my journey. I screwed up, I made mistakes. I got caught in a Ponzi scheme, wiped out one third of my net worth. I made bad investments, I made bad decisions. But there is, there, there is scientific evidence that shows that we learned more from those, from from, from those those mess ups than, than we do from our successes.
And so if I lost over a million dollars in a Ponzi scheme, which effectively would've paid for a couple of PhDs at, at, at, at big, big universities, if I'm gonna pay for that education, y'all should get, get some some of the benefit of that education without paying for it. And so the book is My journey as a single full-time dad that was an entrepreneur raising his son at,
at six years old, building businesses, building wealth, but trying to find a path to financial freedom. So I had a life of choice, a life that was meaningful, a life that was impactful, that allows me to sit back and say, I get to choose each day the way I wanna do it. I give you the frameworks, I give you the systems,
I give you the very processes that we, that I've used to make this happen. And we start off, unlike most books, is I want you to know what your life is gonna be like. What do you want it to be? Because we can talk about I just want a million bucks. And my first question is why? It's, it's an arbitrary number.
So, so rather than figuring that out, you cannot talk about money without talking about life. They, they, they, they have to coexist. So building a bank account, but, but, but having a bankrupt life account is horrible. And I've watched so many people, 'cause I've worked with, with millionaires, billionaires and, and people just starting out,
and I have watched people that you would look from the outside and they go, oh, they are so wealthy. Yeah. And I look from the inside, I go, but they are so bankrupt. And so, so the book is part philosophy and life and living richly, but how do you use the money to fuel the life, the meaning,
the missions, the movements. You want to do it in a way that allows you to say, I did it my way and, and giving you the tools to make it happen one step at a time and breaking it down in non-academic kind of terms. Then, you know, me, i I do all kinds of frameworks and drawings. So it's,
there's, there's a lot of pictures in the book. Excellent. Well, we're a, a visual community, so that'll be helpful. Yeah, I love it. Yeah, no, I think it is required reading for not just every business owner, but literally every person. Like I, if I have to pay my kids to read these types of books and your book and just be like,
listen, you, I'll pay you to read this because this will set you up with so much more financial knowledge than you can get just from, from, you know, trying to figure out wherever it's coming from. Like, it's not taught in schools. People don't wanna talk about it unless you're lucky enough to actually have parents that understood this and imparted their knowledge onto you.
It's really hard to find. So Yeah, it's, it's the prescription, I think, to solving the financial problems if we do it right. And the greatest gift we can give our children is to give them financial literacy and independence, not by handing them a check or by handing 'em a skillset. Yes. The Second greatest gift that we can give our children is to be financially literate,
independent ourselves. So we're not knocking on their door at 70 years ago, 70 years old going, Hey, you know, I'm taking that spare bedroom. So One, they're not coming home to you at 30 and you're not going home to them at 70. Exactly. Everybody wins. I love it. So where can people go to find your book?
Did they go on elcon or is there a special spot that they should go get it from? There's A, there's a special spot because what I wanted to do is give a bunch of gifts and resources to allow them to implement and execute on this stuff faster. Okay. And so if they go to your money machine book.com, you can, you'll access it and you'll,
you'll get the steps you need to go through to, to buy the book. You'll end up still buying the book from, from Amazon and Barnes and Noble, but to get the, the other resources and the guidance from me and all that stuff, you want to use that website to do it your money machine book.com and then, and then we, we get you in the game.
That's awesome. Oh, and it's a fun game to, like, once you, it becomes addictive once you start learning about it. And once you start seeing these little results, and once you automate things and it make it easy on yourself, it becomes really easy to, like, like you said, you don't have to start off with 20% like right now,
but like, all right, you start with 1%, then 2%, and then 3%, and you're just going up in these little tiny incre in increments and you don't even notice it because it's coming out before it hits your checking account and you like spend it on life. Yeah. And, and then, and then because of time, you look back after 10 years or something,
you go, wow, look at that number. You know? Yep. And, and I know I threw a lot of statistics, but I think this is important, 79%, this was a, a millionaire study of 10,000 millionaires. 79% of 'em were first generation. Wow. Meaning that they didn't inherit it, they didn't win it, it wasn't given to 'em.
They created it. So eight outta 10 created it, 31% Of them did it on career earnings that never exceeded much more than a hundred grand a year. Wow. So it doesn't take a lot. It takes the behaviors, it takes the habits, and it takes the decision that you, you, you do this and what you can end up doing is creating that money machine that allows you to have a life that outlives you.
I love it. All right guys, go get your book, your money machine book.com and if you enjoy this conversation and you want to listen to more Money, talk with Mel, Mel, let 'em know where they can find your podcast and what, what that, those details are. Yeah. My, my podcast is the affluent entrepreneur show.com, so you can,
you can catch me there. I do a couple times a week on YouTube, on podcasts where we're talking about some of the topics, money topics, and some people will submit questions and I'll make sure that we answer the questions on them. The point is, is this, we were raised in an environment where money, speaking about money is impolite, but I think it's a mistake.
I think we need to open up the conversation, have the conversations if we're ever to solve the financial problems, or to allow you to have the financial destiny that you were born to have that you deserve. I think financial freedom's a birthright. Yeah. We just gotta go claim it. And I'm on a crusade. I like the path for a million families to make that happen.
I love it. Awesome. All right guys. Go get your book. Go listen to Mel's podcast and we'll see you next week. Mel, thank you so much for taking the time to chat with us today. Oh my God, thank you for having me. It was a blessing to me. Thank you.