The High-Income Trap: How to Stay Focused, Avoid Distractions, and Build Lasting Wealth

You’ve made it. You’ve climbed your way up the corporate ladder in industries like technology, biotech, and healthcare. You’ve figured out how to become a high earner, consistently bringing in a solid income. For many of you, that journey included getting an advanced degree—whether it’s a master’s or Ph.D.—and making yourself indispensable to companies that value your expertise. You’re not alone. Most of my clients are in similar industries and positions, earning six- and even seven-figure incomes, often with equity compensation like RSUs.?

There was likely a time when you never imagined making this kind of money, especially in your 30s or 40s, even 50s. Maybe you thought that once you hit a certain income level, you’d be set for life—on easy street. But something unexpected happened along the way.?

The Reality of High Income??

First came the higher tax brackets. The more you made, the more taxes chipped away at your paycheck before you even saw it. Then there were student loan payments, saving for that first home, the nicer cars, and, for many, the arrival of kids. Those of you who became parents soon realized that daycare costs, often over $2,000 per month per child, were no small burden.?

Now, you’re looking around and wondering—how is it that even with this great income, things don’t add up the way you thought they would? Lifestyle creep is real. The cost of living has never been higher, and with social media and advanced marketing strategies from every brand imaginable, we’ve become super-consumers.?

Despite all this, many of you reading this still manage to have money left at the end of the month. So where should that extra money go? Into your 401(k)? Roth? Individual investment account? Or should you start buying real estate??

Avoiding the “Shiny Object” Trap?

For many high-income earners, there’s a constant temptation to chase the next “big thing.” I’ve been there myself. The more I made, especially when it came quickly in large amounts (sound familiar with those RSU vests?), the more I was on the lookout for the next high-flying investment. It’s called shiny object syndrome.?

But after going through it multiple times, I’ve learned a few things. I’ve become more seasoned as both a person and an investor. Now, I focus on consistency and thoughtful decision-making—less on chasing the next hot stock or investment trend. My goal now is to help others avoid these mistakes and consider alternative views for building and preserving wealth, not just buying into what’s sold to them online or through the news.?

The Power of Staying Consistent??

Today, two close clients called me with questions. One wanted to invest more capital into a popular energy drink company, and the other was interested in acquiring more shares of a large technology company. Taking positions in individual stocks is fine—as long as you understand the risks and build your portfolio thoughtfully, in line with your overall net worth and financial goals.?

But here’s one thing I want every high-income earner to know: Understanding your risk and volatility tolerance is key. When you design an investment portfolio that aligns with your goals and risk tolerance, you set yourself up for a much higher probability of success. If you keep feeding that portfolio consistently, adjusting along the way, rebalancing for risk, and being mindful of taxes, you’re setting yourself up for long-term success.?

The Smart Way to Build Wealth?

It’s important to build a mix of pre-tax, after-tax, and tax-free accounts. Real estate can be a smart part of your portfolio when it makes sense. You also need to manage your equity compensation properly, without letting emotions take over your investment decisions.?

Working with a trusted fiduciary advisor—or a team that has your best interests in mind—can be invaluable. They’ll give you the honest truth, whether it’s something you want to hear or not. They’ll also coordinate with your tax and legal advisors to ensure every angle is covered, helping you create clear goals and strategies to support those goals. And remember, thinking five moves ahead is crucial—not just in your career but in your financial life too. Your advisor should be thinking that way as well.?

When you do these simple things—design a smart, diversified portfolio, manage risk, stay consistent—you won’t feel the need to chase the next high-flyer or obsess over the latest stock tip on TV or social media. Instead, you’ll already have exposure to the best companies through low-cost institutional funds, index funds, or ETFs—without having to pick the next Nvidia or Microsoft yourself.?

The Bottom Line?

The moral of the story is this: Don’t chase the next big idea. Life is going to cost more than you think, but you can reach your goals and beyond by being smart and staying consistent. Work with the right people who will keep you on track—not just with your money, but with your health, mindset, relationships, and everything else that matters.?

If you ever want a second opinion on your financial picture or are interested in a complimentary wealth strategy call, schedule it today. I’ll even include a free one-page financial plan after the call with actionable steps to help improve your situation.?

Book you call today! https://calendly.com/bfawealth/new-strategy-call?month=2024-10

About Mateo Dellovo: I’m the founder of BFA Wealth, where we focus on helping clients make smart financial decisions for the long term. Our goal is simple: provide clear, personalized guidance that aligns with your goals, without the sales pitches or unnecessary complexity. www.BFAwealth.com

Disclaimer: BFA Wealth does not provide tax or legal advice. All investments involve risk, including the loss of principal. Please consult with your tax advisor or attorney regarding your specific situation.