← Your Next Dollar: Money Management for High Earners
Your Next Dollar: Money Management for High Earners
Why You Make Six Figures But Still Feel Behind (Even When You're Not)
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You're a high earner. You do the responsible thing and you say no to plenty. So why does it still feel as though you're behind? If that sounds familiar to you, you may not even be behind at all. And that is our goal for this episode today, is we want to show you a if you do feel behind, why you may not be behind. But we're going to dive deeper than that because we want you to understand that you may be comparing your net worth to someone else's spending. And that, my friend, is not something you want to be doing whatsoever. And for many of us, behind is just a feeling. It's a feeling that we're not accomplishing exactly what we want to be doing. And so I want to help you understand that you may not be as behind as you think. So today we're going to help you fix this. We're going to cover the real reasons why high earners actually feel behind. And when the math says otherwise, we're going to talk about the signs that prove that you're actually ahead of most of the country. And many of you right now probably are ahead of most of the country, even though you feel as though you were falling behind. Or we're going to talk about what to do this week, especially if you genuinely are behind, so that you can work towards your financial plan and help fix your finances. And in addition, we're going to talk about a few things that nobody truly talks about, why your 30s and 40s might be some of the hardest decades to build wealth and get ahead. We're going to talk through how much of behind is just a comparison game running in the background and whether the feeling itself is costing you more than the Gap ever could. I'm Andrew Giancola. Welcome to your next dollar. Let's dive in. So first, I want to talk through a couple of different reasons why you may be feeling behind. And the first one is that you are comparing your net worth to other people's spending. Now, this is something many of you have felt before. Maybe you have a friend who got the brand new car and when they got that brand new car, you felt as though, well, I've been driving this car for a long time. How are they affording those monthly payments? Or maybe you have a colleague who just bought a brand new house in the nicest neighborhood in town and they invite you over for a barbecue and you say, how are they affording these monthly payments? Or you are seeing other people going on vacation. I know specifically for me, when you see people go on vacation, On Instagram, on their highlight reel, you feel as though, why can't I take those same exact trips? This is one of those traps that many high earners can fall into. If you have a bunch of friends or family members who are also high earners, you may be seeing their highlight reel. You may be seeing the situation where they are spending more than they actually make. In fact, let me give you a stat about this. US household debt just hit a record $18.8 trillion at the end of 2025, with $1.28 trillion of it being US credit cards. So that vacation that you are seeing people take to time and time again could be a vacation that is just being financed. And in fact, the statistics show that many people are financing their vacations. They are going into deeper debt for their vehicles, they are going into really deep debt to buy their brand new house. And so this is something that if you are comparing yourself to someone else's highlight reel, you want to make sure that you understand the full picture. I have a friend who every single quarter goes on a vacation. And they seem to go on this lavish vacation. So they went to Europe, they went to China, they went over to the Philippines, and they've been traveling across the world. And I thought to myself, well, how is this person actually affording this? And many people out there, when they are seeing this, they most likely feel as though they are behind because this person can continuously take this vacation over and over and over again. Well, I ran into that person a couple of months later after seeing them take all these amazing vacations where they were traveling the world over and over again. I said to them, hey, what has it been like to travel the world like that? And they started to go into detail about some of their trips and start to talk through some of the things that they were doing. But then they laid down the one big thing that I was wondering, and it was that the fact that their father had just sold this huge business, and every single quarter, one of the big things that he wanted to do was take his family on vacations. So I was comparing myself to someone whose vacations were getting funded by someone else. And I tell you this story because the reason behind this is that you need to understand that you have no idea what other people's situations are. And when you are comparing yourself to other people, in reality, it is not the best outcome overall. Now, the average American carries about $105,000 in total debt, according to Experian. And nearly half of the people with credit card balances expect that debt to grow in 2026, according to Nerd Wallet. And just over half of Americans say they are not making enough to compared to what they see on social media. And this is incredibly important to understand because social media is going to make you feel behind. And once you recognize this, deep down, it's going to shift the way that you think about money. Once you realize that I'm comparing myself to people where I don't really know what their situation is. And among people who are experiencing this, 82% say they feel behind in their finances. And it affects 43% of Gen Z and 41% of of millennials. And this is according to Hartford Funds. So if you feel behind, this comparison trap is the number one thing that I want you to start to evaluate. Evaluate your psychology when it comes to this and see if you're comparing yourselves to other people. Ask yourself this question every single time you see someone take a vacation. Do you feel jealous? Or is this something where you just understand, hey, I don't know what their situation is, and I'm going to focus on the things that I can control, which is my own finances. Now, number two is measuring from when your income changed. See, many high earners just recently got a raise, or maybe you just recently increased your income over time. And many folks out there are comparing themselves to when their income changed. So let's say, for example, that over the course of your early 30s, you were making $50,000 per year. And over that time frame, all of a sudden you got one raise, and then you got another raise, and then you got a third raise, and then all of a sudden you're making 150 to $200,000 per year because you worked your way up the corporate ladder. Well, comparing yourself to when you made less money and the things that you did with your finances back then is just something that you should not be doing. And for example, if someone who is 38 years old earning $55,000 per year with $40,000 saved, whose income jumped up to $200,000 per year, and they're saving $50,000 per year when their income jumped at an 8% rate of return, would have roughly $3 million by the age of 60. And so this is an example that shows you that you can catch up when your income increases. So stop comparing yourself to the days when you were making less money. Now you have the most powerful thing at your disposal, which is your income. And your income can transform your entire financial life. And once you take a portion of that income every single month and Put it towards your financial goals. That's where you'll see the transformation happen. Number three is you are not defining what you are actually behind on. Now, this can be the culprit for many people that I have talked to in the past because you may be behind on paying off your student loan. You may be behind on being able to buy a home, if that's one of your financial goals. You may be behind on paying off a personal loan or a personal debt, but you may be way further ahead than most people on your retirement accounts. Maybe you've built up a fully funded emergency fund. Maybe you have a really high savings rate. And so many people will look at one category of their finances and say to themselves, well, I feel as though I am way further behind because I don't, for example, have my student loans paid off. But look at the bigger picture. Zoom out and look exactly where you are today. Because if you feel as though you are behind just from one category, you may be way further ahead than most people. So I want you to separate this into buckets, okay? I want you to separate this into retirement. Well, how are you doing on retirement? And do you feel as though you are moving forward? Separate this into a down payment. If buying a home is one of your big goals, do you feel as though you're progressing there? Separate it into paying for college or paying down your student loans. And then lastly, separate your debt and look at those four categories. Where do you stand in each one of these categories? Because only half of Americans have ever tried to calculate how much they will actually need in retirement. And if you don't know what these four numbers are, then you need to understand that you have to have a financial plan going forward. And we can help you here at NerdWallet wealth partners with a Financial Plan would love for you to schedule. Schedule a time to meet with us. And we'll have the link down below in the show notes. And so here's the reality. You can be ahead on retirement, you can be behind on paying off some of your debt and still be in a great financial situation. So make sure you understand where you are today. Now, number four, and this is a huge one, is that you are in the messy middle now. The messy middle. Many of you are experiencing this in your 30s and your 40s, where maybe you are just now getting married, maybe you are starting to have a family and your career is progressing more than you ever thought it could. And so when you're getting pulled in all these different directions, we call this the messy middle. You have less time than you ever had, but maybe you're making more money than you ever had. But the reality is that you have a lot of different expenses that are popping up. One of the biggest ones for families in their 30s and 40s is if you have kids, you have to pay for things like daycare, especially for high earners who are trying to push and move their way up the career ladder. And if you have to pay for daycare, on average in this country right now, the average amount that someone has to pay per year for a child in daycare is $13,184. And this is according to the Child Care Aware of America. And so I want you to understand that this is a season of life. And for many of you out there, I know when my kids were in daycare, for many of them we were paying upwards of $20,000 per year just to have them in daycare. But guess what? When you realize this is a season of life and you may not be able to save or invest as much as you originally thought, that is going to be something that is going to give you comfort. That's going to be something where you stick to your financial plan. And over the course of those next couple of years, maybe you're saving and investing just a little less. Many of you during this timeframe may also have aging parents. And if you have to take care of your aging parents or if you have to help your aging par, that also could be a financial burden for you. And so when you're in the messy middle, you have less time and you have more financial obligations. And so this is a perfect storm scenario where you're just not going to be saving as much as you will be in future years. And that is okay. We want to let you know that that is okay. But the key here, and what gives you reassurance, is having that financial plan in place. Because when you have a financial plan in place, you know exactly where you're going and what you need to be doing next. So just understand this phase is temporary. You only have so much surplus to save and invest. And so moving forward, we need to make sure that we just remind ourselves of that. Don't beat yourself up if you can't save as much as you want to during the messy middle. Now, after the messy middle happens and you feel as though you have a surplus again, that's when we want to take some of those extra dollars and start putting them towards our financial future. Now, number five, this is one many people I have talked to feel is you Focus on what you haven't accomplished yet. How many of you are in your 20s or your 30s or your 40s and you just look ahead and say, man, I wish I had a million dollars saved and invested already. Or you say to yourself, I wish I had bought my house already. Or you say to yourself, I wish I had that fully funded emergency fund. And sometimes some of the accomplishments that we are currently achieving are being overshadowed by, by us looking forward and looking ahead to some of the things that we have not accomplished yet. This, my friends, is one of the comparison traps that a lot of high earners fall into. Why? Because typically, if you are a high earner, you are someone who is a high achiever and you want to push and you want to progress and you want to continue to move up the ladder. And so because of that, many times it's in your nature to look forward instead of looking, looking back at all the different things that you have already accomplished. Maybe over the course of the last five to 10 years, you maxed out your retirement accounts, you were able to contribute to your HSA, you were able to get that 401k match, and you were able to actually build up an emergency fund. Well, if you've done all these amazing things, looking forward to the fact that you don't have a million dollars invested or $5 million invested is something that we need to evaluate why you feel that way. And so if you are someone who is a high achiever, I get it. I feel these same exact feelings. I. But it is something that you just want to evaluate because if you have not accomplished certain things yet, you will moving forward. And that financial plan is going to help you with that. Number six is, I want you to understand this, that most wealth is invisible. So stealth wealth. Millionaires are something that we talk about a lot on this podcast and they are folks who typically are building wealth over time. And you can't really tell. There's a book called the Millionaire Next Door that talks about a lot about this. These are millionaires that don't have the flashy cars, they don't have the flashy clothes, but they are building wealth in the background. They are contributing to their 401ks, they are contributing to their IRAs, they are doing their mega backdoor Roth IRAs and contributing to their retirement and brokerage accounts. And they are building wealth quietly over time. In fact, for a lot of people out there, they feel as though millionaires actually inherit their money. But this is one of the largest misconceptions that we have seen in fact, according to Ramsey Solutions, this is when they did the study of the largest millionaire study in the country, where they studied over 10,000 different millionaires and found that 79% of them received no inheritance before they reached their first million. Why is this so reassuring and why is this stat so amazing? Because that means you and I can reach millionaire status by doing it on our own. You don't have to inherit money, you just have to have a financial plan in place and know exactly where you're going. And a lot of them built them on ordinary incomes. And so for high earners, this is completely reassuring because you have an above average income. And so because of this, you have one of the most valuable assets of all, where you can take a portion of that income and put it towards wealth building activities. And about one third of these millionaires consider themselves wealthy. Most millionaires still don't feel wealthy yet. And so sometimes when you don't feel wealthy yet, even though you have built a tremendous amount of wealth, you can feel as though you are behind. Now, number seven. And this is one that Ryan loves to talk about as well. But it's comparing ourselves to others at advanced ages. I know when I first started in my career, I said to myself, look at all these people in their 40s and their 50s and their 60s. Look how much wealth they have built over this timeframe. Why have I not reached that status yet? And this is because I was comparing myself as someone in my mid-20s and someone in my early 30s to people that have been doing this for decades and decades. And so comparing your stage to someone 20 years ahead of you is not a fair comparison whatsoever. In fact, what you can do is look at something like median net worth by age. Now, many of our listeners of your next dollar are going to have above average median net worth by age. But let me just give you some of the data so that you can have some reassurance, so that you can feel a little bit better about yourself here. So the 2022 data of the Federal Reserve and the new data is actually going to come out later on this year. But if you are under the age of 35, the median net worth is about $39,000. Between the ages of 35 to 44 is about $135,600. Between 45 to 54 it is about $247,200. And between ages 55 to 64 is about $364,500. Now, when you look at these numbers, and when I look at these numbers I realize these are low for these ages. And so for many of you out there, you are most likely have a much higher median net worth or you are going to have a much higher median net worth than most of these numbers. Now, here's another interesting stat. Net worth roughly doubles every decade for the typical American household. And this is according to the Federal Reserve. So someone who is 20 years ahead of you has already been able to have a few of those decades prior to so that they could double their net worth over that timeframe. And so if you use the median for your own age and compare yourself to that median, then you can figure out, am I ahead or am I behind? And typically, you want to be way ahead of some of those median numbers because those numbers are typically low. You're just looking at the median American out there. And as a high earner, you want to take more of those dollars and put them towards future you. So again, don't measure yourself against people who are way ahead of you on the career ladder, or they're just way ahead of you in terms of how long they have been compounding, and long they have been building wealth. And so this is the thing that we want to remember is compounding and time are the two keys when it comes to accumulating wealth. Now, number eight is maybe you started late. And for those of you out there who did start late, maybe you're in your 40s right now and you're saying to yourself, I wish I started investing in my 20s, I wish I started investing in my 30s. But guess what? It is never too late. One, you need a financial plan, and you should be having a conversation with an advisor at NerdWallet Wealth Partners. But two, you need to look at this situation as something where you now have an opportunity. Because sure, the best time to plant a tree was yesterday. But the second best time is today. And getting started today can absolutely transform your financial future. But the key is getting the ball rolling and just getting started. And so if you have a high income right now, taking a good chunk of that high income, even if you started late and putting it towards assets and things that will grow over time, can change your retirement significantly. So I have four questions that I want you to ask yourself. Number one, am I ahead of where I was five years ago? Because what many people do is they look forward and they say, I haven't accomplished all of these different goals that I've wanted to accomplish, but I want you to look backwards for a second and say, am I ahead of where I was just A few years ago. If you are 35, go look back at when you were age 30 and look how far you have come. Go look at your retirement account statement. Go look at your Roth IRA statements and see how far have you progressed over this time frame. Go look at your net worth statement. Has your net worth increased over the course of the last five years? Because this is the second question that I want you to ask yourself. Your net worth is the scoreboard. This is the scorecard that shows, hey, am I progressing over time? And if your net worth is going up, my friend, you are doing much better than the rest of the country. You are doing much better than most people are right now. And so tracking that net worth, at least on a yearly basis, is something that we would love for you to do so that you can track your progress over time. It is one of the metrics that I always make sure that I am tracking every single year. In fact, I love to update it quarterly just because I love to see the shifts and changes over the past quarter. Number three is, is my savings rate strong? Are you saving enough to accomplish your financial goals? And are you saving enough to progress forward financially? And have you been doing so for the last couple of years? Because if your savings rate is strong, and I'm talking 20% plus, then you should be making some really good progress. Now, when we talk about savings rate, we're talking about putting dollars towards your financial future or into your emergency fund or paying down debt. Those are some of the areas that can help you increase your net worth over time. And then number four is, am I buying more freedom every single year? Because if you are someone who is buying your freedom every single year, maybe you're maxing out those retirement accounts. Maybe you're putting more dollars towards your financial future into your taxable brokerage account. Maybe you're making the right moves in order to buy more assets. Then you are progressing further than most people in this country and you are moving further ahead. So next we want to talk about some of the reasons why you are not behind. So number one is you are earning above the median income for your age. So we talked about the Federal Reserve data, which we can go over again here. But between ages 18 to 34 is $60,530. Between ages 35 to 44, it is $86,470. Between ages 45 to 54, it is $91,880. And between ages 55 to 64 is $82,150. Now, this data shows you that if you are earning more than the median income for your age, this is going to be one of those things that you are definitely further ahead than most people. And so if you've been beating yourself up saying I am not progressing financially, but your income is is above this median number, well, you are doing better than most. And for most listeners of your next dollar, your median income is definitely above these numbers. Now one of the interesting things that I want you to note is that we have looked at studies of folks and their income and you can see over the course of their 30s is when their income really begins to progress. And in their 40s and in their early 50s is where their income begins to peak. And so this is the optimal time if you're in your 30s or your 40s and to take that income and put it towards wealth building activities so that you can buy back your freedom. And I think that's the goal for many of us out there is we want to buy back our financial freedom so that we can get back our most valuable asset, which is time. Number two is you have paid off all of your debt outside of your mortgage. This is a second sign that you are ahead of most people. And you can look at all of your debts and say to yourself, okay, well, do I have a car payment? Maybe you do, maybe you don't. Do I have student loan payments? Maybe you do, maybe you don't. Do I have credit card debt? Well, if you do, then you may want to make sure you are prioritizing that above all else. But these are some of the scenarios where we want to look at where is your average debt right now? Because the average non mortgage debt in this country is about $21,603. And households carrying credit card debt, about 45% of them are carrying credit card debt right now, according to the Federal Reserve. And so this is another comparison tool where you can look at your debt situation and say to yourself, well, do I have most of this debt paid off? If I do, you may be ahead of most people financially. Number three is you max out your 401k and other retirement accounts. So if you're a high earner, we want you maxing out your retirement accounts or looking further into maxing out your retirement accounts. And if you haven't seen our episode about the your next dollar blueprint, this is our step by step guide on, on how to think exactly about your next dollar and where to put that next dollar. But we want to look at our retirement account specifically because this is going to Help us with our tax situation. This is going to help us further our wealth building going forward. And so we want to make sure that we are looking at our 401k. And participants who max out their 401k are only about 14%. So ask yourself, do you max out your 401k? If you do, you are ahead of 86% of people. And this is according to Vanguard and 2026 employee contribution limit is $24,500 for your 401k and for your IRA, it is $7,500 per year. If you're over the age of 50, you have access to that catch up contribution, which gives you access to up to $32,500 per year in your 401k. But make sure you check current IRS rules to ensure that you are looking at your current year to make sure that you know what those max rules are. Now, among earners that are earning above $150,000 per year, about 49% of them max out their accounts versus just 2% of those earning under 75 to $100,000 per year. So high earners are actually skewing the median a little bit and increasing that number. So if you are maxing out your account and you make over $150,000 per year, then you are doing better than 51% of high earners. Now, number four, and this is a big one, is that you have a written financial plan and you know your numbers. Now, there are some numbers that we want you to know and understand about your finances here. One is understanding your net worth. Number two is understanding your savings rate. And number three is understanding how much you're spending every single month. So only 36% of Americans have a written financial plan. And among Those who have 1, 96% feel confident that they will reach their goals. What if you could feel confident about reaching your goals? What if every single time you thought about your money, you felt confidence? How amazing would that feel? Well, that's what happens when you have a written financial plan. And we here at NerdWallet Wealth Partners would love to help you put together that financial plan. So again, make sure you check the link down below to schedule a free call and a free consultation to see if we're the right fit for you. Now, number five is you are not living paycheck to paycheck. You would be amazed at the numbers about how many high earners are actually living paycheck to paycheck for high earners earning over 300 to $500,000. Per year. 41% of them are living paycheck to paycheck, earning more than $500,000 per year. 40% of them are living paycheck to paycheck. I just recently talked to a friend. He was making $800,000 per year, and. And he was spending $805,000 per year. So you may be saying to yourself, how does this even possible? It happens very frequently. And so if you are not living paycheck to paycheck, you are doing better than a large chunk of the population, especially when it comes to high earners. So we are doing this episode because I want you to understand that you may not be as behind as you think. If you are accomplishing a number of these goals, then you need to look back at why you feel this way. Why do you feel behind? Are you comparing yourself to other people? Are you comparing your numbers now to what you used to make? Are you looking at other people's highlight reels instead of looking at your own situation and focusing on the things that you can control? So the big takeaway that I want you to have from this episode is you need to focus on the things that you can control. You need to focus on your own financial situation, because personal finance is very personal, and your situation is going to be different from every single person around you. So instead of comparing your finances to everyone else, make sure you look at the real numbers and do everything in your power to progress your financial plan going forward. All right, so now we're going to do a reaction segment, and this is a hilarious video where Larry David went on the Rich Eisen show to talk about traveling for a wedding and how much you'd be spending when you go and travel for a wedding.
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B
I say to my wife, we're going to a destination wedding. We should not give a presentation because my presence is my present. What do you say, Larry?
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C
First of all, where is the wedding? How far is it?
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B
Another country?
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C
Okay, you don't even go. You don't go. You don't go.
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B
But it's a close family friend.
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C
I don't care. I am not flying. 14 hours on a plane.
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B
Yes.
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C
To somebody's wedding. I'm not gonna do that.
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B
Even if it's a nice destination, where it's a nice hotel and you're set up.
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C
No. 14 hours on a plane. You can't even breathe. Come on.
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A
So what would be the.
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B
What? The distance from your house that you.
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C
An hour and a half by car. That's it. No playing that. You didn't. You don't get on planes for weddings.
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B
Right.
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C
Okay. Out of the question.
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B
So what do you put in the, in the, on the rsvp, do you write something to know?
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C
Can't, can't. Can't make it too far.
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B
That's it.
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C
That's it. Yeah.
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B
And just leave it at that.
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C
Leave it at that.
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B
You don't give no follow up phone
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C
call, no follow up nothing? No.
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B
Okay.
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C
They have to know when they're inviting you. They're putting you, they're making you go on a plane. First of all, you're spending $20,000 to get there.
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B
That's what I'm saying. Why do I need to get candlesticks or a gravy boat after all?
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C
Exactly. If you're flying to Europe, my God. And a hotel, it's going to cost $15,000.
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B
Yes.
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C
Yeah. How's that for a present?
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A
So first, I would love to hear how many of you have experienced this where you've had to go through overseas weddings and pay, you know, tens of thousands of dollars down in the comments below, wherever you are listening to this podcast. But this is something that I have actually experienced over the course of the last couple of years. I just counted before this episode and I got invited to 13 different overseas weddings over the course of the last five years. And this is something that I think if it's a really close family member or if it's a really close friend, that is a situation where you can travel overseas and kind of make the trip. But if this is something where it's happening constantly and you have to take multiple trips to, to go to weddings and you feel obligated, then you may want to reconsider what is happening here. Now again, as high earners, if you want to take the trip and it's a really cool destination, hey, more power to you. You should go take that trip and enjoy that trip. Enjoy more of your dollars. We want you to have that balance when it comes to this. But if you are someone who feels as though you are constantly get invited to these overseas weddings and you are, you know, shelling out 10,000, 15,000, $20,000 and it is eating in to your bottom line budget, then you want to make sure that you are really, really conscious, a parameter. I set a rule for when this happens going forward and if it's a very close family member or friend, then I will absolutely go. But if it is anything outside of that parameter, if it's just someone who is a friend but not a really close friend, then I am most likely not going to go, but I would love to hear from each and every single one of you. Let us know down in the comments below. How do you feel about overseas weddings? Do you go to those overseas weddings and what is the most you have ever spent on an overseas wedding? Because the most I have ever spent is about $15,000 to a wedding in Spain. My wife is actually going to one of her best friend's weddings this summer into into Italy and we were going to take the whole family decided against it and so now we're only spending about $6,000 on that trip specifically just because she is only going. But I want to know how much you have spent on an overseas wedding and what's the most you have ever spent? Would love to hear about that. Let us know down the comments below. And if you have any questions that you want us to answer on the show, feel free to send your question to podcast at NerdWallet wealth partners would love to get your questions and Ryan and I can answer those questions on the show. Listen. Thank you so much for listening to this episode of your next dollar. If you would like to get help from some of our advisors like Ryan and some of the other advisors that we have on hand, feel free to schedule a consultation or a call with a link down below in the show notes. And if you're getting value out of this episode, consider leaving a five star rating and review. And consider following this podcast and sharing it with a family member or friend. Thank you so much again for being here. We truly appreciate it and we will see you on the next episode.