Why High Earners Still Struggle with Money

The Psychology of Wealth

Author

The Morning Call
March 05, 2025 • Estimated Reading Time: 6 minutes

Money is fun

Today’s Does of Wisdom

“The road to wealth is a journey of self-discovery, not just a chase for money.” — Robert Kiyosaki

So This Happened

1- China Sets GDP Target at About 5% Despite Trump Tariffs

China also reiterated its longstanding stance on opening up its markets to foreign investors in the work report. Bloomberg

2- TikTok parent ByteDance valuation rises in latest share buyback, sources say.

TikTok's parent company ByteDance is offering to buy back shares at a higher valuation than six months ago as it launches a new share repurchase program for U.S. employees this week, two people familiar with the matter told Reuters on Tuesday. Reuters

Why High Earners Still Struggle with Money: The Psychology of Wealth

Earning six figures (or more) should mean financial freedom… right? Yet, many high-income professionals still live paycheck to paycheck, feeling trapped despite their wealth. If you’re making good money but struggling to save, invest, or feel financially secure, you’re not alone.

This is not just about numbers—it’s about mindset, behavior, and financial psychology. Let’s explore why even high earners struggle and how you can break the cycle.

Why Do High Earners Struggle with Money?

1. Lifestyle Inflation: The Silent Wealth Killer

One of the biggest reasons high earners struggle financially is lifestyle inflation—as income rises, so do expenses.

  • A bigger salary often leads to a bigger house, luxury cars, private schools, and high-end vacations.

  • Instead of investing or saving, many professionals increase their spending to match their new income level.

  • Over time, this creates a scenario where no matter how much you earn, it never feels like enough.

📌 According to a study by LendingClub (2023), 36% of individuals earning over $250,000 per year still live paycheck to paycheck. 

💡 Solution: Avoid lifestyle creep by setting a cap on lifestyle expenses and increasing your savings rate with every raise. A rule of thumb? Save at least 20-30% of every salary increase.

2. Poor Money Mindset: Fear, Anxiety, and Avoidance

Many high earners experience financial anxiety, even when they have enough. Why? Because their money habits are often driven by deep-seated beliefs about wealth, formed in childhood.

  • Some feel guilty about having more money than their family did.

  • Others fear losing it all, leading to hoarding cash instead of investing.

  • Some avoid checking their finances because it triggers stress or self-doubt.

📌 Research from the American Psychological Association shows that 72% of adults experience financial stress at some point in their lives.

💡 Solution: Shift from a scarcity mindset (“I’ll never have enough”) to an abundance mindset (“I can grow my wealth”). Regularly review finances, automate investments, and work with a financial advisor to remove emotional decision-making.

3. The Trap of Status Symbols & Social Comparison

Social media makes it easier than ever to compare your lifestyle to others. Instagram, LinkedIn, and TikTok are full of people flaunting luxury cars, designer brands, and extravagant vacations.

  • This pressure leads many high earners to overspend to maintain an image.

  • Instead of focusing on net worth, people focus on net prestige.

  • This often results in more debt, less savings, and a fragile financial future.

📌 A 2023 CNBC study found that 49% of millennials feel pressure to overspend due to social media influence. 

💡 Solution: Detach wealth from status symbols. Real financial success isn’t about what you own—it’s about how much financial freedom you have. Prioritize long-term investments over short-term luxuries.

4. Lack of a Solid Financial Plan

Many high-income professionals don’t have a financial plan. Without clear goals, budgets, and investment strategies, even a $500K salary can disappear quickly.

  • Many fail to optimize taxes, leaving thousands on the table.

  • Some keep money in low-yield accounts instead of investing in stocks, real estate, or index funds.

  • Others wait too long to start planning for retirement, assuming their income will always be high.

📌 According to a 2023 Charles Schwab survey, 57% of Americans earning over $100,000 have no written financial plan. 

💡 Solution:

  • Track your cash flow. Use budgeting apps like YNAB or Mint to understand spending patterns.

  • Prioritize investing. Max out retirement accounts (401k, IRA, Roth IRA) and allocate at least 20% of income to investments.

  • Work with a financial planner. The right strategy can optimize taxes, grow wealth, and ensure long-term security.

How to Break the Cycle & Build Lasting Wealth

If you’re a high earner but struggling financially, here’s how to turn things around:

Automate savings & investments – Pay yourself first by automating contributions to investment accounts.
Create a financial vision – Define clear goals: Early retirement? A real estate portfolio? A business?
Avoid high-interest debt – Even with a great salary, debt can eat away at your wealth-building potential.
Invest in financial education – Read books, take courses, or hire experts to improve financial literacy.
Focus on net worth, not income – Your salary matters, but your assets and passive income streams matter more.

📌 Remember: It’s not about how much you earn—it’s about how much you keep and grow.

Final Thoughts

If you’re making good money but still feel financially stuck, it’s time to rethink your relationship with wealth. Shifting your mindset, controlling lifestyle inflation, and investing wisely can transform your financial future.

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