Why People Making $200k Are Still Broke 

Thank you for this wonderful video! I have incurred so much losses trading on my own....I trade well on demo but I think the real market is manipulated.... Can anyone help me out or at least tell me what I'm doing wrong?

So many people are living above their means. Buying and owning homes that costs way over what they can afford, then end up living paycheck to paycheck or having to be super frugal with their monthly budget to own their homes. Shouldn't jump on the band wagon to do what others are doing without reflecting if it's a good fit for your life. Be patient and find happiness without comparing self to others.

No mortgage, car payment or personal debt. We make a combined income of 40k per year. Paying cash for the next car.

I knew a person who used to make 140k USD in Ukraine annually, and in Ukraine it's an astronomical amount for a working guy, he wasn't a businessman. He somehow lived paycheck to paycheck. Literally. You can spend any amount in a day. It is an attitude.

One principle that has held our finances to scrutiny and intentionality from making $13/ hour back in 2009 all the way to (1,2,3, etc)00k / year income, is always having a 40% savings {Retirement + Brokerage Investing + HSA + Cash} when times are good, or bad. Live on less than you earn (1), and that money and income is not a measure of success, wealth is (2), and finally money does not make someone a better person, be humble and kind and graceful (3). We've been doing this for so, so, so long that there simply is no other way to live. If it's not 40% set aside each pay period, its not happening. There is always a way with less, and its often more fulfilling, liberating and rewarding.

Pay yourself first 🙌 Great video, Rachel!

Good advice, Rachel. Anyone earning 300% more than the median income without saving and investing 20% every year is clearly spending way more than they should. 50 years ago, we were low-income college students and even then, we saved half of our income just about every year. We just got used to being frugal and we still are. It helped to not own a car from 1974 to 1978.

Daycare for 2 kids and a mortgage these days will cost $6000 a month and that’s with nothing else

Do you pay $7 a gallon for gas? 10% sales tax?

Even though my wife's grandfather didn't earn much, he retired with over a million dollars. He saved $75 from every paycheck for 45 years and was cautious with his money. If he had invested in mutual funds, he could have been worth several million. It's not about how much you make, but how you manage your income.

I made 104,855 last year. And I'm only 6800 away from being debt free. Super stoked 🙌

Live below your means, your lifestyle should always be lower than your income. I’m 70, finally retired at 65. I have 35% of my investments in an IRA, 25% in index funds, and the balance in an investment acct. I receive income from rental property too. Zero debt. Everything is working well 👍🏻

Great video but if you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life, Successful people don't become that way overnight. most people see at a glance-wealth, a great career, purpose-is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life too 🙏🙏🙏

It's not about what you make, it's about what you keep!

We find that the key to living "debt free" is to live below our income. There is so much peace with this lifestyle.

I totally understand how a family earning $100k could be living paycheck to paycheck. My husband makes $82k a year. After taxes and insurance, he only gets to keep $57k. We just found out that we were $6000 short on our federal taxes for 2022 despite claiming zero deductions before tax return so we lost our entire CTC. Factor in inflation and all the most important things for survival have gone up either 50% or more than doubled (groceries, utilities, gas). Thank God we have a mortgage. I can't imagine paying today's rents. We survive, but it's extremely tough. We don't buy soda, alcohol, packaged food, fast food. No dates, no new clothes, no luxuries. We only have 2 subscriptions that total less than $20 per month. He can only afford to invest 5% into retirement and there is not much money left at the end of the month to put into savings if we have to replenish our emergency fund. Only reason we get by is because we have no debt. I never would have said $100k wasn't enough 3 years ago, but this inflation is just unreal.

Hm, I always thought high-income earners were rich. I guess that was naïve of me. And I’d like to think that I’d never be broke if we made $200K. We actually only make $53K on one income while raising children and paying off six figure debt. We paid off $26K last year and $33K the year before that. So what Rachel is saying makes sense-the income doesn’t matter if budgeting, spending, etc isn’t managed well. And thanks for the encouragement, Rachel! Living below our means really is difficult, especially for us as low income earners. We’re having a birthday party for my little girl tomorrow and it’s so tempting to do more and more and more. But this video was a good reminder to stay within our boundaries❤

What really had me accelerate my savings is my Dad passing away last year at age 65 . I’m 40 now and was planning on retiring at 60 but I’ve changed that to age 50. I figure if I suffer the same fate that gives me 15 years to enjoy retirement(hopefully a lot more)

People who make 100k+ and are broke are broke because habits they initially formed scale with their income. Behaviour is key!

Because their expenses are $200k. They spend it all. If they made $300k they would spend that too. 😁

I’m living paycheck to paycheck, but only because I’m gazelle intense on paying my house off by the end of the year.

In a lot of states making 100-200k can mean you’ll lose almost 50% to taxes. Not only income taxes but the other taxes too. Property taxes, consumption taxes, corporate taxes, taxes, taxes, taxes.

what should be on everyone’s mind currently should be to invest in sectors based on performance and projected growth, pretty much how i made my first million. Especially with the current economic crisis around the world. i'm taking advantage of the low prices. I have a diversified portfolio that spread across stocks, grade bonds, coins and etfs. my broker James Fletcher Brennan, handles all my investments and ensures I stay above the market.

Overbuying on their home and refusing to buy modest used vehicles and pay cash for them are the big reasons many high income earners live paycheck to paycheck or close to it. Furthermore, many chose to accumulate all that extra debt before paying off their student loans, so they put themselves in an even worse position. You can always outspend what you earn.

Big car payments, bigger house payments, someone else cleans their house, someone else gets their groceries, someone else cleans their car, someone else mows their grass, out of town all the time, eating out all the time. They also have a habit of replacing things that function just fine, but don't have the latest and greatest style to them (clothes, shoes, furniture, appliances, kitchens, bathrooms, it's never-ending).

If you can't manage $200 you won't be able to manage $200K. Every income level is susceptible to the idea that you are not in control of your choices and that it is some exterior thing that is to blame.

This reminds me of HGTV. Wife is a dog walker and the husband is a caterpillar collector. 2 kids. Budget for a house is $1.5 million.

I can attest to lifestyle creep. I made $100k in 2022 yet, basically live paycheck to paycheck. The good news is that I’m $5k away from paying off two debts. Once those are paid off, those two payments worth will be going directly into savings each month, and that should be a huge help toward building a nice cushion.

I have friends that were living paycheck to paycheck when they were making $50,000 and are still living that way now that they make over 6 figures. It's like you've talked about before, it's lifestyle creep. They redid their home, upgraded their cars, phones and toys. I'm not judging, I'm guilty of it myself at times. I can see how easily it can happen. Just because someone starts to make more money, they don't suddenly become a new person and handle money differently.

Lifestyle creep is something to watch out for and many people are susceptible to it. A really good question to ask yourself is "If my income were half what it is, would I still buy that thing?" If you hesitate at all it means you don't really need that thing (and if you didn't buy that thing when your income was half what it is now it is a much bigger clue that you don't need it). It is extremely important to stay grounded as household income increases and stick to basic wealth-building principles. It is very easy to think "I've made it now so I can spend what I want" when that is not remotely true.

Nothing beats contentment and living below your income.📌📌

Live within your means regardless of income. I am on SSI disability. I don’t like it but it’s what God has given to me. I’m able to help with some of the household expenses. Still living with my parents but I do my best to improve my situation and I refuse to go into debt to do so because it won’t help anything

some millennials fail to do one thing right which is INVEST. I made my first million from blue chips and top etfs using a broker so i invested and re-invested my profits. I also acquired large amount of high-quality dividend-paying stocks too that gives me a solid base of passive income. ever grateful to Susan Kay Mack handling my portfolio, two years now and he still surprises me

I made 148k last year and I’m pretty much broke. My wife doesn’t work and we have 3 kids. Live in a very average rent home and have 2 very average vehicles. We don’t spend money on anything other than bills, food, etc. I don’t even have healthcare on the family either. It’s ridiculous how expensive it cost to raise a family now days

Because they spend all their money

Discipline, save, invest, lower expenses, live less than your income and stop buying things you truly don't need and can't afford.

My spouse and I make low six figures each. We live off one of our incomes, the remainder goes towards extra on the mortgage & retirement. It's easy to let lifestyle creep ruin any income increases without the right mindset.

After taxes and rent, 200k turns into 90k max in ca, assuming you are renting a cheap 1 bedroom apartment. Good luck if you have kids here.

The people who could benefit from this video will never watch this video as they are very busy on Amazon Prime.🤣

wealth isn't about what you make, it's about what you spend!

It's not that much anymore in a high cost of living city with inflation. $400k is the new $200k.

It’s so hard when you get the higher income to not spend it. We made on average $50k for a decade as a 1 income household with 5 kids. My husband got his break 3 years ago and we have made on average $200k for the past 3 years and on track to do it again (commission). I’d be lying if I said we each didn’t have moments of ridiculous spending but luckily we did manage to get some debts paid off and we refinanced to a 15 yr mortgage at 2.3%. We put money into 401k and IRAs which sadly have taken a hit this past year and we saved $70k in a saving account. We could have done so much better but you live and learn.

I made $44,000 last year and I don’t live paycheck to paycheck. Should make $60,000 this year. I plan on giving myself 10% more for myself, the other 90% will go to retirement and growing my emergency fund. I honestly don’t believe in lifestyle creep. You either live within your means or you don’t. Simple.

I don’t get it, live below your means!

I've seen people at my job get a promotion for like $6K, which would put them between $75K and $85K annually and the next thing you see is them driving a brand new luxury car (Lexus, Audi, BMW and Mercedes). I also see brand new Louis Vuitton hand bags.

The Are BROKE Because They Spend All Their Money On Liabilities Instead Of Assets 😮

It’s the big fancy house in the prestigious neighborhood. Ive never understood needing the big house

$200,000 doesn't get you far in metro areas of California (Bay Area, LA, San Diego). If you live extremely frugally there you'll just break even.

I could care less how badly a lucky person spends their money. How they treat others in order to obtain that money is more of a concern.

Only if a good amount of folks do what you guys teach, just imagine how many millionaires we already have or will have in the future. Not the sad statistics where at least 50% of people are living paycheck to paycheck, even for high income earners. Great contents as always!

Much better than Grant Cardone's "You're a loser if you make less than 400k/year" video haha

What a load of Rubbish. 200k income is living in Luxury. Sure you pay a lot of Tax but you still have a lot of money to Afford anything.

a co worker was making about 80k with a family and getting takeout almost every night. No emergency fund

I’m going be making about 100 to 120k starting. I’m going to try to live on 60-80k of that. And pay down debts with the rest. Then save the rest.

They should really have a course in high school regarding finances. It should be required period. However, that won’t happen since it will make it harder for credit card lenders to prey on college students.

I lived on less than $12000 a year for my whole life. And realized these people who live on materialistic things really are nothing in reality

I wish she would talk about how people on Social Security and how they can improve their lives living on a very fixed income

a lot of us making 6 figures are living paycheck to paycheck because it took a lot of debt for us to get there. Now we're aggressively paying off that debt which doesn't leave much room. The issue for a lot more than a lot of people is not living outside their means but realizing their means aren't much for now due to what comes out of it. paying 5k/mo for some of us means getting out of debt in 2+ years

After taxes, multiple cars, vacations, shopping sprees, kids' college educations, and instant gratification, there might be nothing left.

Very interesting. What about people who have a high net worth but low income ? Please make a video on that too.

$200k is the new $100k

Rachel needs to learn to speak without constantly saying "like" and "you know".

First and foremost. Max out your 401-k. Not the company match. The government limit. That money is not taxed until later in life. If your wife or husband is working and not making that kind of money. Do the same thing. That's over$ 22000.00 dollars that is not taxed. For each of you.I maxed out every year and I never grossed that much. If your at 4% at work change it to 30% or whatever it takes to max out the government limit. It's all about taxes, taxes taxes. That money will be taxed at a lower rate when you retire. Be smart. Be different. We both retired at 55. Work sucks.

Probably because most ppl making 200k are men with wife’s who don’t work and 1,2,3 kids. 200k is very good money and if u live pay check to pay check making that kind of money u are probably doing something very wrong or have way to many liabilities.

Thank you for this video! I love the stats and reality of money! Your videos have such digestible information and it is so helpful. Keep on doing what you are doing!

Thanks bud for keepin us financially Educated! Regardless of how bad it gets on the economy, I still make over $22,000 every single week.

I’m somehow spending 4 to 500 a week on groceries

When I report my income this year for 2022, and for the first time since like 20 years ago, I managed to survive making less than 20k! 😂 This was easier a long time ago when things were a lot cheaper, like rent for a townhouse used to be 700-900 dollar range collectively, but it amazes me I was able to survive now.

This thought just came to me. Yes these people have all the money in the world. What they don't have is humility, knowing that it can all be taken away quickly. Bible verse to my mind about choosing to sit in the back of the church building rather than the front. Luke 14:10.

Watch out below and report these scammers! Every 2 weeks a 30k return on 7k investments....NOPE !!!!

I feel like a lot of ppl making this income also live in high cost of living areas

In my profession, people are expected to have a certain lifestyle - high-end foreign car, huge houses and fantastic vacations. Given the amount of student debt they accrued to get to this position along with a high tax bracket, it can be a prescription for disaster.

Income tax, property tax, sales tax, car insurance, home insurance … eats all income nothing left

You really need to understand just how bad inflation is… people just say it like it’s a bullet point and move on. Most people have an idea of the value of money that becomes a fixed point of reference for them for most of their life. For me, my idea of the value of a dollar is rooted in about 1996. So my idea of what $100k is requires $189k. To have what I feel is $100k after taxes would require $260k gross in todays dollars.

This is mind boggling cause you think people will be smarter with their own money since they make so much. However some people who make less money than some of the high income people are managing their money a lot better.

People always spend on items they don't need. Instead of saving for the future (house, car, retirement) they waste it on the following (and it adds up: Paying for 4-6 streaming services, buying $5 coffee everyday, driving a $60-70k car when a $40k car is fine, eating out WAY too often since eating at home is x3-x4 cheaper, going on 1-3 vacations a year, etc. There are so many but the main ones are eating out too often, expensive car, and vacations.

I've always been surprised by how many people in each income bracket live paycheck to paycheck. But so many times, I've seen people and heard stories of people making tons of money a year that end up bankrupt and don't have much to show for it. It's not easy, but I've continually worked on lowering my monthly expenses and raising my income to the point that I now live on about 40% of what I net and less than 50% of what I gross. I've a lot of friends wonder why I don't buy more toys or cars, etc, and it seems backwards to a lot of them, but there's no comparison to the peace and control I experience in knowing that I'm not in trouble if an emergency comes up or I have to find a new job. No judgement against my friends or people who like to spend their whole budget on fun. I get why people do it, and they often have fun stories of vacations and other things they go on. It's just my experience, and what is said here that when you have control of your finances, everything just goes much easier.

Awesome video Rachel. DIRECT HIT 👌🏽🚀🚀🚀

I brought $69 net income in 2022. Saved $30k cash and lived on $39k. No debt except the house which I will be paying off in eight years.

Because they spend money and don’t focus on what is important

Its because culture has accepted debt as normal, even noble. So sad.

Make your own Hedge fund

In my country that amount would be enough for housing, children education and retirement. Wow…

Money is never enough even celebrities become poor if they dont make money in sleep

I know a couple who make 30K a month and the wife complaints about not having enough money etc.....to us, who make a fraction of that

I've created a budget for this whole year in January. This way I know how much can I be spending on groceries, cosmetics, etc. not only per month but in the year, since some categories vary, like medical expenses. I accounted for 10k annual variable spendings. I was at around 12-13k in the past 3 years, but because my fixed expenses went up, I want to decrease the variables. I spend max 50% of my take home income monthly but ideally aim at saving/investing 70%-90%. It costs me lots of sacrifices but I'm fluffing up emergency fund/sinking funds/house downpayment/retirement/investments. I'm renting an awful gloomy place in unsafe area and hate every minute of living here and fear for my life daily. I'm telling myself just few more months to set me up for life.

Yes… so true…my close friend makes FAR more than that ($350K) plus bonuses and she simply spends it as fast as she can…on more expensive items…and is miserable. She is 60 days past due on a mortgage because she wasn’t “paying attention” for a home she built 36 years ago. Yep… refinanced over and over to pay off credit cards. At 1/3 of her income I have none of her problems and am debt free. Trying to help her is of no use…she can’t control her spending.

Remember- it’s not how much you make, it’s how much you keep!

My life has changed Thank you Jesus.$32,000 weekly profit Our lord God have lifted up my Life!!!, Glory to the everlasting God Almighty.

That's obscene that those with high incomes are living paycheck to paycheck. People are out of control with spending, acting like children, eating out, buying cars they can't afford. I make a modest income and a lifetime of frugality means I can save much of it, which I need for retirement.

When we have extra income, it gets saved for future family trips, home repairs that will inevitably happen, or saving for future car purchase. We act like it's not there and live like we are used to living on the lesser income.

I made 100,000 last year and have over 900,000 liquid cash in the bank. House paid for on 5 acres with no car loans because I pay cash for only used cars. Bills I pay are water, gas, cell phone, car and house insurance. I woke up in my 30s now at 48 I can rest at ease me and my wife. We are still young with no debt. I tell family and friends why buy all this stuff and work all day just to live flamboyant and do not own any assets at all and work 40 to 60 hours killing yourselves. Be smart with your money and invest it right and let it work for you instead of u working for it.

I have a friend that grew up poor and still poor to this day. One thing she knew and told me years ago was “the more you make…the more you spend “. I had no clue what she meant but I know now and I still wonder how…to this day…did she know all this…since like I said she never had money and still doesn’t ..and mostly hung out with people that didn’t have money. I can look at comments of people saying they thought anyone making that kind of money was rich…and up until maybe five years ago…that is what I thought tooo. And btw..I do not have money. But I do have family with it. The funny thing is though..I actually have family members that are living way way below their means and I grew up thinking you pay cash for a car for instance. I have in debt family members tooo…all I can do is shake my head. But the ones who spend correctly is who I was around growing up.

My parents divorced in 1972 leaving me vunerable at age 16. I struggled through junior college, entered the Air Force and served for 24 years. I married a poor woman from the Philippines who became a nurse. We bought a home and paid it off. We put 2 sons through university, they have professional lucrative careers. We helped her family in the Philippines. We helped my South Carolina family. We have money saved and just won a federal lawsuit. We are not happy with what we see around us!

Im guilty of this as well, me and my wife work very hard, from both serving in the military, janitorial work, puttin her through nursing graduate practitioner school. Together we make nearly 180k a year. We have no fancy cars, small 1450sqt foot house. And live paycheck by paycheck because i failed to budget our finances. Its unfair to her. She deserves better after working so hard we should have something to show for it. I know many who make less and live stress free and healthy financially. I need to get it together as a husband and father.thank you for this video

70K is about $33 an hour. I’d be blessed to earn that much

Is it because the family spends more money than they earn? Just a guess.

It’s not about how much you save or make. Spend every dime you make until you leave this planet. There is no right or wrong way to live. Trade the money you make for the things that make you happy. But don’t go broke before you leave.

As someone who lives in the DMV area. The reason is state taxes are incredibly high so they take $200-300 every check. Then when people start making 100k+ they spend beyond their means. I am working on making 200k in the next 2 years in IT and that's about 10k a month. You could easily get a home for 2-3k a month pay all your phone\internet and water bills for 1k save & take care of your kids health insurance $1k Car payments $1k ( married, bread winner) Point I am getting at is with all this money you are just wasting it. I make 86k right now and I made terrible decisions that last year that I have no choice but to make more money pay them off and do better financially. Otherwise I'll be stuck forever.