Why So Many High Income Earners Are BROKE
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- Опубліковано 31 тра 2024
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If you've ever thought that earning six figures means you’ll become wealthy, chances are you’re wrong. 51% of Americans making $100,000 or more are living paycheck to paycheck which is really strange but there’s 5 reasons why high income earners are broke.
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⌚️Timestamps:
00:00 Start Here
00:15 Weird Behavioral Phenomenon
01:53 Income ≠ Wealth
05:53 The Broken Path
09:00 Bombardment Spiral
11:31 Wrong Tax Strategy
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Renting an apartment is the dumbest thing one could possibly spend money on. you're basically throwing money out the window.
The big problem I have with people like you is that no one wants to walk you through how to make money step by step.
My parents were high income when I was growing up, but they were living well beyond their means. Thus, we were always on the verge of financial collapse. I didn’t understand why I was rich in some ways and poor in others. Only as an adult did I figure out why our situation was like that.
high-income earners have too much student debt which is ironically why they earn so much in the first place, lots of education. same thing for other income earners, business debt, mortgage debt. those income-generating investments are all finance by debts so although you earn more, you have lots debt and hence high monthly interest to pay so paycheck to paycheck.
It's called keeping up with the Jones's. I have in-laws that did that for years. My late husband and I always lived beneath our means. We didn't take fancy vacations to LasVegas or Hawaii. We didn't have credit card debt in the tens of thousands. We didn't take cruises two or three times a year. I currently have no credit card debt, no car payment (paid cash), a mortgage with a 2.875% interest and making extra principal payments. I live very comfortably and putting money into savings every month.
The economy is no longer income-based, it’s wealth-based now.
That and the high tax rates for those making under $100k, plus the Ukraine and Israel tax fund.
@millabasset1710 except the tax rates above 100k are more than that of lower
Exactly. There are clear tax brackets and those that make above $100K are paying more. @@theokay1
Would you rather have 90% of $60k or 50% of $1m? Only looking at the tax rate is... Grossly misleading.@@theokay1
Bye bye middle class
I started in my job making around 40k and now I make around 150k (been in my job for a while, like a while) and my spending hasnt really changed over the last many years. I am actually motivated to save more and decrease spending.
high-income earners have too much student debt which is ironically why they earn so much in the first place, lots of education. same thing for other income earners, business debt, mortgage debt. those income-generating investments are all finance by debts so although you earn more, you have lots debt and hence high monthly interest to pay so paycheck to paycheck.
Good for you! If you were born 10 years later you would be having room mates and being up to your eyeballs in debt as 65k is the new 40k. A house?? HA! You need 130k a year for that. Good luck starting out or if you are under 40.
@@timgibney5590 it is still possible to live a good life. i graduated college debt free and now making 140k as a software engineer at age 27. I have over 160k in networth all in savings account, 401k and IRA. i can buy a 1 million dollar house with 200k+ downpayment by age 30 if I wanted to.
problem with many young people nowadays is that they like to impreganate and get pregnant before marriage, go to none public schools with high debts to earn useless degrees, and on top of near zero financial literacy. if they don't have the wisdom to make good life choices like using protection during sex, studying something useful for the money spent, I would not be surprise they make poor decisions in their finance as well.
@@IamAWESOME3980 i get your point but ill also point out 15-20% of high-income works never went to collage there field pays really well when i started out in the oilfiels in 2007 as a pumping unit tech only made 30-50K after leaving getting on a rig 100+ most i made was 147K a year but 2 years later having a stroke cuz wife at time racked the credit card up over 200k i worked 6-7 days a week 14hrs minimum most times 18-20hrs. the stroke happen after filling chapter 11. Then she left ive never made over 60k since but ive saved 15-20K every year since so saving money needs to be both partys priority not one sided or we can just pay it off over time, debt to me is scary i dont like it, when you make xyz you should have a % to save and % to invest its up to you have control unless you have a wife/parter that thinks your like the government you can just keep spending till your broke then find someone els that has more.
I highly agree Vincent. I, myself, work as a healthcare provider and make high income which causes us to buy cars, cellphones 📱, homes 🏡 because “we can always work” more hours. Lifestyle inflation is real. Currently I do not have a car payment and put more into my retirement so I am moving in the right direction but I know I could do more. Thank you for this video 🎥
6 figures is just upper middle class, not rich
Six figures can be $999,999 a year wtf are you taking about?
@@sfrealestatedealmaker6001yes that’s upper middle class
@@djtwister6997 highly dependent on location. As a blanket statement it’s incorrect
6 figures USD in Vietnam easily means top1% cuz less than 1% people there make this much
"Six figures" is a dumb classification that has little practical meaning. It could mean $100K or $900K. Someone making $100K is living a very different lifestyle from someone making $900K. To lump them together as if they're in the same socioeconomic class is absurd.
I went from earning 6 figures to now only needing $5k a year to survive. Capitalism has made me an anti-consumer, so when I do buy, I buy used to not have to give taxes to the man.
No amount of money will ever be enough if you can't realize a life independent of its need. Or, the ONLY way to HAVE money is to not SPEND money.
We spend money as a family with kids in a high cost of living area and still have money.. You can still have it even if it don't hoard every penny that you have.
@MisteMAGA 🤡rMischiefGaming
I make $192k a year and I save and invest $7k a month. Like I literally don’t know what to even do with that extra $7k other than save and invest it. I eat out every day and my car payment is $1k a month. If you can’t live on $250k a year, you’re the problem.
that means you’re only living on 2k per month (after the 1k car note) which is very low for most people making that amount of money. (assuming this is your pre tax income )
Depends on where you live . Bay Area or NYC 250k per year is not that much. If you have a family you just get by.
Terminally online take 😂
I wanted to do that but I have to pay my mortgage and HOA that was like 5k a month.
did you know that before getting the mortgage? that's wild@@DonutAgain
Comparison is the thief of joy.
People around me at work mostly EAT up their paycheck on expensive lunch!
This video is soooo needed🙏🏿😊🔑💰
Financial focus hit me very late in life, though I was always trying to maximize my 401K. Even retired and on SS I have an hourly job (which I enjoy) and currently contribute 50% to my 401K. The balance (after tax) leaves me with ample spending money and sinking funds for house improvements. I’m still careful and do a lot that costs me nothing. My hobby is doing better …
I was 39 when I started, so probably older then you, better late than never
Firsr gen american. Blue collar governemnt job full benefits. Community college. Most of my friends dropped out of college have about 20k of college debt wasted time. I started on cop cars, then diesels, Now working on e buses bc electric vehicles are the future. Have a 401k w 15% rate of return(literally chose random disbursements lmao). No 401k match just what im putting in. All benefits. Job security. Only high value thing i have is my 2016 4r that is kinda above my needs but gotta find a way to enjoy doing what you do at some point (car camping, wheeling, etc)
All that people need to know is money talks however wealth whispers
i think you have that backwards, money whispers and wealth talks.
@@jared19882 no because if you’re truly wealthy, you’re not walking around wearing Gucci like look at Mark Zuckerberg he wears the same black T-shirt every day
@@youknowwithMartyKauffmanNothing wrong with Gucci if you can comfortably afford it
@@barbarar5869 oh, I never said there’s anything wrong with Gucci. I just am implying that if you are ultra wealthy, you are not flaunting your wealth because that will get you got.
This is very true. My wife and I live well below our means and have everything paid off.
This video is so good. So so good.
Thank you so much! Did you learn anything new from it? :)
That saving is worth more than the sum of its parts.
I won't feel bad for those that have been smart enough to get a job that pays 6 figures but not smart enough to understand that you don't have to keep up with the Joneses. I can understand this behavior from younger people, but after your mid-30s there really is no excuse. If they are happy living this life of debt and extravangance they can't afford, they I am happy for them.
Great Video 🎉
At my first post-college job, I earned 40K. Now I earn 160K. I improved my lifestyle with a new house and used cars in-between but overall I have not changed my routine. I still mostly make my own meals and rarely buy new things. So I never had issues paying my bills and am saving plenty. I still look back at my life before and can't believe I lived on only 40K.
I wish I had a problem with making 6 figures and spending it. Currently at 70k with kids and its not easy!
I remember when I was 21, and my wife and I together made $25,000 with a newborn son.
Hang in there, your not alone
Better than making only 20k
I remember remaining virgin without friends and social life. I made 130k a month and a 200k saved up by age 27
TIL in Japan, houses are not good investments; they depreciate and deteriorate rapidly. Look it up. I was blown away...
I am more than comfortable with $263K invested. I'm retired but still invest for the kids/grandkids now. I live on about $10K/year and not feeling deprived. I made about $45K/year when I retired 16 years ago. My older son is an electrican and makes over $100K/year. He seems to have absorbed my attitude though. He still drives a beater car like me. He only perhaps overspends for his twin daughters.
Homeowners insurance, property taxes, bills, food. How you living on 10k a year lol
@@jared19882No debt;
self insured on house;
taxes homestead exempt;
utility bills $309/month;
car insurance $69/month;
internet, $45/month;
phone 15.14/month;
charity $90/month;
auto expense $40/month;
don't eat out ever;
which leaves $265/for food less than I spend;
I live in Nebraska;
Income is $39K+/year
lol back
that's not true, assuming 10% return, you would need 1mil to earn 100k. So having 100k income is like having 1mil net worth. The difference is the income goes away when you lose job or retire.
If you invest in dividend stocks compound interest will ensure you don't need to come up with the 1mil yourself. In reality you're coming up with half to 3/4th depending on your portfolio.
@@DioDiablo702yeah but that takes 30 years, who wants to wait that long 😂
i have no idea how people who have kids are coping. the older i get, the happier i am that i chose to stay CHILDFREE.
its the same concept olin the video, having kids will bring additional costs but you can also control how much you spend on them. if you are smart then buying them only the necessities should not be too difficult. think about it the people that have the most kids are sometimes financially unstable so if they can do it someone who has disposable income should allow you to still be in control of your finances even with children. i think…
Hopefully one day you’ll realize that having children is priceless.
@@yosefitche for you, not me.
@@yosefitcheI opted not to. I'm very happy
You need dual income for kids
Lifestyle inflation doesn't really exist. Inflation, however, does. Companies are making larger and larger margins.
Income doesn't equates to wealth, but also wealth doesn't mean anything if you can't live a little either.
People wish to live well when they have money, but if your wealth is mostly generated thru saving by living like you're poor, then what do you really have to show for it? Consumption in moderation is important, your body and soul needs the recharge as well. As your income grows, you should treat yourself better, it's a part of motivation and goal you give to yourself.
You're mistaken. It's "having income doesn't equate to being wealthy," but it does mean that you are creating wealth.
Spot on
@@twystedhumournot if you’re spending said income
It's interesting learning how certain things that were not hard to get growing up, to other people that was a sign of wealth.
I would love to see a video of what many of us thought "what being rich buys" as kids.
I had my nieces one day asked me if I was rich?
I was confused and asked her why she said that?
She told me, every time they come to my place, they eat stuff their parents can't afford on a regular.
I had to explain to her, making an income meant for 1 person can not feed a family of 5.
I didn't have to spend money every day, but her parents had to
we have 16 new $300k starting homes with raggedy d.r. horton and they are FULL but dont see many uhaul or furniture vans coming.
They are investor air bnbs
Completely agree. The current state of the economy is unduly difficult for most of us. Was used to buying and holding assets, but with the current economy and inflation catching up to my $210k portfolio, it feels tough to do. My biggest concern is life after retirement, honestly.
The government has let us down; just buy gold with it. Or hire/ work with a good market strategist. Youre safer that way
I took charge of my portfolio but faced losses in 2022. Realizing the need for a change, I sought advice from a fiduciary advisor. Through restructuring and diversification with dividend stocks, ETFs, Mutual funds, and REITs, my $1.2M portfolio surged, yielding an annualized gain of 28%.
@josephbush Do you mind sharing info on the adviser who assisted you?
She's known as a 'Heather Lee Larioni'. One of the finest portfolio managers in the field also widely recognized. Just research the name. You’d find necessary details to work with and set up an appointment.
Thank you for sharing. I just scheduled a phone call with her. She seems proficient considering her résumé.
Bankruptcy over medical bills, divorce, maybe "child support" which goes up to 80% of your net income in "New York" student loans ect.
I've noticed this among my friends in finance too. After 10 years working in wealth and asset management, where most of us make a good six-figure salary, I was surprised during a chat with close friends about our savings and investments. Only one friend had about $300k, and most had less than $100k saved after a decade in this well-paying field. It's a wake-up call that no matter our income, we must manage our money better. Loved the video!
Watching videos like this as a Canadian is a reminder that Canadians make less and pay more. (Average income US in 2023 was $59,384 (or $80,140 CAD). In Canada it's $63,181 ($46,817 USD). We also pay way more tax (for good reason, but it still hurts). Just interesting.
Interesting....🤔 So, by spending wisely, pick a decent place to live, keep track of spending, and know what can benefit me in the long run. Am I saying it right?
Great video and keep it up!😎👍
Edit: Can someone go without using a loan for long time?
Unless you are willing to pay cash for a 20k plus car or a 300k plus house you will absolutely need a loan. The very wealthy don’t even use their own money anymore
Getting increasingly difficult to get by without credit but it is doable. Not having loans of course means paying for things up front, so if it would take you 15yrs to save up enough money vs a 30yr mortgage to get in today, up to you if it's worth it.
Leverage can be useful, saving up hefty down payments to lessen your monthly burden if financing is used.
High income higher usually lives in hcol area so it cancels out. Making 100k in California is different from making 100k in TN
The trick is to have a budget. Don’t inflate costs as you earnings rise. Focus instead on saving not sounding more. My living expenses have generally declined as my income has risen.
They must live in the most expensive cities or high student loans would be my guess..
Most doctors have no pay raise in 15 years... making $250k average per year... not much to brag about
My outlook on money changed when I realized someone making $300,000 can retire broke & someone making $80,000 can retire a multi-millionaire. With the current market movement, you have $100,000 to invest. Where are you investing it?
I believe a healthy portfolio has 3 things, at the bare minimum: Exposure to ETFs for increased diversification, Exposure to assets that generate cash flow like dividend stocks, Exposure to market-leading tech.
Who is this person guiding you and how can i reach he/she?
So my all-inclusive rent is $300 less than the national average was in 2010. And it's 2024.
The internal adverts are effing annoying dude.
Don't spend at or above your means. Always spend below your means. I can't stress this enough.
My father as an immigrant did his best to feed my mom and my 2 siblings. At $42,000 a year, he was able to do it just right for a family of 5. Sure we didn't live a fancy life but we survived. We had 2 brand new vehicles, a 3 bed room apartment, we'd be able to dine out here and there and have a little bit of leisure. I don't understand how people cannot manage their financial stability making well over $100,000 salary, let alone living by themselves or with a 2nd or 3rd person.
As I got older, I knew how it is to fully develop financial literacy as I've endured the harshness of what my family went through in life. That lesson paved way towards growth and understanding of how to handle my money correctly. Now with my wife and I having a house hold income of a little over $200,000, we own a real estate, 2 brand new vehicles, a time share and we are currently renting a condo unit, going on cruises eating out almost everyday and living a pretty lavish life. We did it right.
People need to make sacrifices and live below their means. If you can't control your urges you don't deserve the high income. You can't handle money and don't want to build wealth properly. The poor who are financially responsible will become the new rich.
Deserving a high income is not related to controlling one's urges. Deserving high income is related to one's skill set.
@@otrebla8944 or being a trust fund baby / winning the birth lottery
Every $100 you put in your IRA at 20yrs old today equals $3,192 at retirement with standard 8% annual return. Remind yourself that every $100 you don’t save is worth a lot more than $100. Knowing this is the difference between wealthy and rich people.
high-income earners have too much student debt which is ironically why they earn so much in the first place, lots of education. same thing for other income earners, business debt, mortgage debt. those income-generating investments are all finance by debts so although you earn more, you have lots debt and hence high monthly interest to pay so paycheck to paycheck.
That’s why the rich get richer because rich kids parents can’t shoulder the bill
Rich kids also have better educations and skills tho. It is not pure nepotism.
I think you can if you live in a third world country instead, like for instance somewhere in the Caribbean. I’m referring to living off 60K per annum with 0 Student loans a cashflow business and great credit score that come with benefits.💁🏾♂️
Bro, your google ads are Grant Cardone. How ironic.
“Income inflation” is also known as “stupid” 😂
And this is why the government could care less about inflation. They know us wage slaves will find ways to figure it out. Let’s hope small business owners, comm and residential real estate, and corporations start seeing profit loss. That’s when we may see some relief as they can lobby!!!
Keeping up with Joneses.
My home mortgage = 0 - so I have FU $$ and I don’t have A Linkedin
Anybody could spend more than they earn.
I put 1/2 of my raises into savings. Around retirement I was putting 25% - 30% of my income into the IRA- 401K.
Boss. But money is fake… why do we save money? Gov print and deflate money?
Exactly that is why we don’t, we buy assets that hold value
As I’m watching this, I’m packing my apartment to move into a cheaper apartment. 😅love your content
as i make more, i save more, i save like 90% of my yearly income now
If a couple without children can't live on $125K, they are idiots.
More more more problems 🎉
Risk free investments that pay 10% returns on your wealth don't exist. For such reasons people with less than $5M in wealth still need to work.
story of my life
income taxes are a bitch
Anyone who says everything under an umbrella is garbage is garbage, and your opinion is invalid there on
1/ food is free people!!! Get of your ass and grow/ breed some 2/ stop paying for assets in cash, rich people do this all the time
Stack money. Live like a bum.
poor rich people 😢
I just don't spend a lot of money on things I don't need and I don't have a problem here.
Boohoo
Damn. I went from earning $45k/yr to $100k/yr in an instant (from a single raise). I almost fell into lifestyle creep. Then I started watching Dave Ramsey. Now I eat ramen noodles for breakfast lunch and dinner and can save almost half of my gross pay. I plan on making my lifestyle lag my raises.
If you're really eating that shitty everyday you will eventually pay with your health
😢 I wish I had you 15 years ago 😭
Oh, cry me a river, middle class aspirationals. Try surviving on a lower class income.
low six figures is not enough to live comfortably in the US. these days you need to make at least $500k if you have a family and want to live a decent lifestyle
Nah mate, 1.5mil
bad video
30000 a month after tax would be comfortable for me and i make 90k my wife makes 130k. Hopefully crypto will mame me retire early. So far i have about 5x my money. Been in the market since late 2017.
There's one reason. The government.
You're a clown if you pay more than 1400 for rent
The high income earners wasted their money buying crap products and services they don't really need. They should live below their means and invest in money earning assets like real estate, stocks, fine art fractional shares. 😂
Bidenomics
MAGA 🤡