Breaking the High Income Curse

Filed under: Retirement

Portrait of happy senior man with computerThe idea that high-income earners are “cursed” sounds ridiculous to most people. After all, doesn’t more money equal more wealth, more freedom, and more happiness?

Well, it can… when managed properly. But if a high annual income always guarantees permanent wealth, why do 78 percent of NFL players eventually experience serious financial crises, including bankruptcy?

The fact is, some people who earn a high income don’t actually stay wealthy for a long time. These people face most of the same temptations and problems as people in lower income brackets, but they’re playing a game with higher stakes. When things go bad for wealthy people, they can go really bad. It’s often called the high-income curse.

There’s nothing superstitious about it, of course. What happens is that people who earn a high income can often develop a feeling of immunity, or of false security. If you’ve ever struggled financially, you know that budgeting and worrying about money becomes a part of your everyday life (or you can at least imagine it). Those with higher incomes don’t worry about money, and might focus their thoughts elsewhere. And that’s where the tendency to overspend, go into debt, and neglect retirement savings can creep in.

Luckily, there’s a fairly easy way to break the “curse”. If you earn a higher than average income, remember to follow these four rules.

  • Don’t spend more than you make.
  • Spend less than you make.
  • Save for retirement. Divert a percentage of your paychecks directly into a retirement account.
  • Pay off your debts. That high income is not guaranteed to last forever

Finally, remember that earning a high income does not automatically equate to having a high net worth. You should build your net worth over time, after getting your spending under control. In the future, when you are able to retire comfortably, you will thank yourself for putting your high-income years to good use. For more information on building wealth and preparing for the future, give us a call. We specialize in helping our clients reach their fullest potential.

Leave A Comment or Question

If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: .