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You see the money is showing up, but nothing's getting done. You don't feel like you're getting closer to the life you want to live. Then you start asking some questions of that money, like, where are you going, right? What are you doing? What are you going towards? Like, and a lot of this, of course, is asking yourself these questions, like what percent of my money is going towards my lifestyle? What percent of my money is going towards buying assets? Investing, right? What percent of my money is being allocated to create flexibility and options for myself and my future?

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Welcome to Earned and Unbound, the Black Abundance Circle podcast for people who have learned how to earn and are ready to become unbound from success that only looks good on paper. I'm your host, Ashley Edwards. Here we talk about turning income into ownership, options, and abundance and building a life that actually feels as good as it looks.

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I make good money. So why doesn't it feel like I'm wealthy yet? This is a question a lot of high-income earners find themselves asking. And it may not be as complicated as you think. So that is what we're gonna break down today. And I'd like to say, welcome. This is Earned and Unbound, a Black Abundant Circle podcast for professionals who are earning, building, and ready to be more intentional about turning their income into ownership, options, and abundance. So today's topic you know, I personally have run into this issue of just thinking that increasing my income was going to suddenly make it easier for me to become wealthy. And a lot of people think that, and I know it's kind of controversial, like people say money won't fix money problems. Have you heard that? And some people get really offended and it can get really heated. But it's true though, like it's not as simple as just getting more money, because if it was, then everyone that has a lot of money wouldn't have money problems, right? Or they'd be wealthy, but that's not the case. There is this gap that can exist between earning money and building wealth, right? And part of that gap is filled by starting to ask better questions about where your money is going, right? You have all this income coming in, and the question is why is it not allowing you to live the life that you want to live? We know that making good money can change your lifestyle, but we also know that it takes more than just the money to get to the place of optionality, right? And I'll explain to you how I came to this realization, the mistakes in my thinking, and how you can make more money than you ever have and still feel stuck and confused as to why you're not wealthy. So for me, you know, started as a teacher, definitely not making enough money. Eventually went to law school, and out of law school, like literally my first year out of law school, I was making $180,000 a year. Now that sounds like a big number for some people. Mind you, I was living in Los Angeles, so that definitely changes what that number means. And I was single. I mean, basically, I was married, but like we didn't really have a ton of expenses. We didn't have kids, it was literally just two adults, right? And all this money. And I quickly became actually single after I started making that amount of money. Another story for another day, but I found myself a single black woman in LA making almost $200,000 a year, yet I couldn't figure out how to create the life that I had dreamed of, like this life of travel and just ease, and you know, definitely wanted to do well in my career, but I also wanted to have like assets and things like that. But I couldn't figure out how to translate all the money I was making into those assets, and I just felt like once I started making that money, there was this level of excitement because that was the most money I ever made, and I just was spending it, I was spending it on everything, like just slaying money, and part of it was I had a lot of things that I wanted to do that I hadn't been able to do before. I had a lot of people I wanted to get gifts for, and I did all those things. So, I mean, I was getting paid I think every two weeks, and that money was going. I was eating out, I was buying people things just randomly, I was buying clothes, I was just buying things, you know. Um, at some point I ended up fully upgrading my entire condo, like new everything, new floors, new windows, new furniture. I actually hired a designer to completely transform it. And so the money was coming in, but it felt like it was slipping through my fingers somehow. Like it was like, yeah, I know I just got paid and it was multiple thousands of dollars, but like where is it now? You know, that was kind of the feeling that I was having. I started to realize through like books and everything that you know the income is what comes in on a regular basis, but wealth doesn't really happen and can't really happen unless some of that income is staying, right? It has to remain in my possession in some other form, other than how it came in, which is through my paycheck. That gap, right, of having the money coming in, but not really owning anything. I mean, I own my condo, but I wasn't at the place of being the type of investor and owner that I wanted to be. That gap is what I was confused about filling. I think a lot of people are confused about it. Like, first of all, don't get me on my rant, but today there's so much information about so many things, and there's just so much access to information that you would think people could easily figure things out. But what I'm realizing is it's actually making it harder and it's making it worse because now that there's so much information, people don't know who to trust, right? If everyone is out here saying that they are a wealth building expert, how do you know who to believe? Everyone's saying they are a real estate guru. How do you know who's the real thing, right? There's a lot of that happening, and it's just creating analysis paralysis, in my opinion. And so you would think that the more information, the more access, the easier it would be for people. But actually, I think it's actually just making it harder. But anyway, there's a lot of different reasons why someone would have a lot of money coming in, yet they haven't translated that into ownership. And when I say a lot of money, let's be clear here because depending on where you are in the country, what responsibilities you have, that can mean different things to you. Now, I gave the very specific context of being a single black woman in her 20s making almost $200,000 a year living in Los Angeles, right? Now, to give you even more color on that, I lived in a condo that I owned. My mortgage was technically like $19.95, like $1,995 a month. But then I had my HOA fee, which was $400 something a month, and then of course, utilities and you know, car insurance, things like that. And so I didn't have crazy expenses. I had credit card debt, I had um, I didn't have a car note at the time, uh, maybe life insurance. I had I didn't have a lot of expenses, so keeping that context in mind, I'm saying I was making a lot of money, right? Now, somebody else may be in LA making almost $200,000 and have four kids and be supporting an elder parent and have a lot of other things going on. So it really is relative to your situation. But generally, if you feel like for your situation you make a good amount of money and you should be able to build wealth, then that's probably true for you. Okay, so I'm gonna let you define that for yourself, you know, whether you're someone who's making a lot of money that can be turned into wealth. Now, in terms of the reasons why high-income earners may feel like the money is just disappearing, it's just slipping through their fingers, it's it's gone. One lifestyle creep. I know you've heard this before, but the income goes up, and so do your lifestyle expenses. And when I say lifestyle, I'm talking about you know, the gym you go to, right? Maybe before you were at Planet Fitness and now you're at Equinox, right? Those are very different gym memberships. Planet Fitness, I think you can get in at $10 a month. If you want to bring a guest, you can get in at $20 a month. Equinox, we're talking about $250 upwards per month, right? Very different. Another example of lifestyle creep is the type of grocery shopping you do, right? Maybe before you were shopping at Aldi's, maybe even Trader Joe's, and now you find yourself at Whole Foods and Erewan and Gelson's, right? Totally different places and totally different prices. Maybe before you were good with your little Toyota Camry, and now you decided, you know what? I deserve a BMW because I worked hard for this, you know. That is how that manifests. That's what lifestyle creep looks like. And the creep part is because you don't really see it coming, right? You are just living your life. You you may feel like, you know, I'm gonna treat myself, and that's all great, but I'm just bringing to your awareness that this is how lifestyle creep creeps up on you. Okay, another reason is fear, right? Some people know that they have this income and that they can do more things with it and better things with it, but they're scared, right? They've heard horror stories about investing. They they have a friend who put five thousand dollars in crypto and they got scammed, you know, or they have a auntie who put twenty thousand dollars in the stock market and it's done nothing for her, you know. So some people have fear, and a lot of times it's based on other people's bad experiences, or even based on something they tried one time that really didn't go well, and so that can cause them to freeze, right? And so now they know they should be doing something more, but they're not because they're afraid. You may have ignorance, right? Despite how much information and access there is in the world, there are people who still say, I don't know, right? I don't know how to invest, I don't know how to turn my income into ownership, I don't know how to create the life that I really want to live out of the income that I have, right? And that's valid. Like I think that it's given that it's so much information and it's hard to know who to believe and who to trust, I can absolutely see ignorance being a reason. Then you have people who say they don't have time, right? There's so many people who claim like they just don't have the time to either learn what it takes to turn that income into a life of abundance, or they don't have the time to learn how to invest, how to grow their money. They're just so swamped and overwhelmed, right? They have the money, but they just they don't have the time. Some people are overthinking, right? They have the access to capital, but they find themselves thinking for five, six, seven months for every opportunity that comes their way, and then they never make a decision. Then you have people who say it's a lack of partnership. I've actually heard this. People have told me, you know, I have the income and I know that there's a life that I'm building toward and that I want to live, but the thing that's holding me back is a partner, like a spouse. You know, they feel like they can't build this alone, even with their income. They need someone in partnership with them to make it work. Another one I've heard is debt. Some people have created so much debt earlier in their lives, maybe before they started earning, or even while they were earning and being high-income earners, but now the debt is so overwhelming that they find themselves using all their discretionary income to service debt instead of to build. Okay, so there's a ton of reasons why someone may feel like, you know, I am a high income earner, but the money is disappearing. Okay, how do we fix this, right? Like, how do we acknowledge that we are high income earners and that we are not where we want to be, and then take the first step to change that? So I think the first thing here is retraining your mind to see money as a tool, okay, or as an employee, you know. Let's let's stick with that one. Seeing your money as an employee, right? And starting to ask better questions of that employee, right? So if you have someone working for you and you're paying them hourly or salary, and you don't see that they're producing results, you're gonna start to ask some questions, right? I mean, I would, and I want you to look at your money the same way. So if you see your money as an employee, you know, I hired you to do this job, meaning I hired you to go and help me build the life that I want to live. And over time, you know, you see the money is showing up, but nothing's getting done, you don't feel like you're getting closer to the life you want to live, then you start asking some questions of that money. Like, where are you going? Right? What are you doing? When you come into my bank account, what are you going towards? Like, and a lot of this, of course, is asking yourself these questions like, what percent of my money is going towards my lifestyle? What percent of my money is going towards buying assets? Investing, right? What percent of my money is being allocated to create flexibility and options for myself in my future, right? These are all valid questions that you can be asking yourself or asking your money employee to figure out what's going on and why you're not getting closer to the life that you want to live. So thinking of income as something that shouldn't just fund your lifestyle, right? But assigning that money a job to help you build the life that you want. Now, if you were hiring your money as a team of employees, I'm gonna tell you the four jobs you're gonna need, okay? So you need four people to hire. The first one is gonna be in charge of your life, right? Your lifestyle. That's your everyday things, that's your mortgage or your rent, that's your groceries, that's your car insurance. If you have a car payment, that's your car payment, that's your the maintenance cost of your car, that's um, that could be your gym membership, any any money that it takes to live your lifestyle. So that's gonna be the first job for your money, okay? The second job for your money is gonna be protection. So this is about, you know, if something were to happen, and let's think about COVID for a second, because I'll tell you a story. But if something were to happen to me or happen to my spouse or my income, what protection do I have in place? And one thing we saw during the pandemic is that a lot of people did not have protection in place. And so when people got laid off and the government hadn't yet stepped in, people found themselves in very difficult situations. So, what kind of protection are we talking about? We're talking about emergency funds, we're talking about assets that can easily be converted into cash, right? It can be a brokerage account, yeah, but that can also double in another category. We're talking about risk management, like insurance policies. So if something were to happen to you, yet you have kids, like are they protected? Some people get disability insurance. I heard someone today say that they had a cancer writer on their life insurance policy, and someone else told me that they had a um dementia writer. So, in the event that they got dementia, because so many people in their family got dementia, then this policy would kick in and be able to help provide for them. And so that second job is about protection. What have I put in place to protect me, my family, my loved ones, right? How have I allocated money towards protection? The third one here is gonna be ownership. So we talk about wanting to turn our income into assets and ownership and freedom and abundance, but how much of your money are you putting aside for ownership, right? Have you given your money an ownership type role in your company, the company of your life? Because that's really what we're talking about here. And the fourth one is gonna be expansion, okay? So that's that big bucket that is really about the life we want to live. Like what money is set aside for me to have optionality, for me to create the life that I want to live, for me to have flexibility. So, for instance, if I want to be able to just spend the day at the spa, right? But I know I have responsibilities at home, like cleaning and cooking. Do I have money set aside to cover some of those things? Like money for a cleaner? Do I have a sitter for my kids? You know, these are jobs for your money so that you can create flexibility and optionality in your life, right? And expansion can even go all the way into investments, right? Investments that generate income for you, that create optionality. Like, do you have assets that create cash flow in case you decide to leave your job or in case you are fired from your job or laid off, right? These are things that can create that feeling of expansiveness. So those four jobs for your money, right? So that's lifestyle, that's one job for your money, protection, that's the second job, ownership is the third job, and then expansion is that fourth job. Okay, what I want you to do is take a look at your income over the last 30 days. So if you're like me, that's two paychecks worth, right? I want you to take a look at that income and see how much was allocated to each of these four jobs. Okay, so if you made $10,000 last month, the question is how much of that $10,000 went towards lifestyle, how much of that $10,000 went towards protection, how much went towards ownership, and how much went towards expansion. And just to be clear, you may not own anything now, but when I talk about how much went towards ownership, I'm saying if your plan is to own something, then are you putting money aside to facilitate that ownership, right? Are you putting something away for something you plan to own in the future? Now, the income to wealth gap usually happens when our income is being allocated too heavily on the lifestyle side. Even though we have these four jobs, and I mean you can create whatever jobs you want, these are just my ideas for you, but if you have these four jobs and lifestyle is only one of them, yet 99% of your income is going towards the lifestyle bucket, that is what creates that income to wealth gap, right? So in trying to close that gap, we need to take some of that income out of the lifestyle bucket and assign it to other roles, okay? So if out of that $10,000 you made last month, figuring out a way to say, okay, right now I'm putting $9,000 towards lifestyle, how can I slowly move a thousand of that towards ownership? How can I move $500 of that towards protection? How can I move $2,000 of that towards expansion? And the allocations will really depend on you and what you want, but just starting to think about like how can I shift some of that money going goes towards lifestyle to other roles in my life, right? Because all of your money is gonna need a wealth assignment, right? Not a lifestyle assignment, which is probably what it currently has. If you feel there's a gap between your income and your wealth, it's probably because you have given your money a lifestyle assignment when really your money needs to understand that the goal here is wealth, abundance, freedom, options. Okay. So thank you for entertaining me with this idea and thinking about the four jobs for your income. I hope this was helpful. Shout out to the Black Abundance Circle sponsor of this podcast, and I look forward to speaking with you all next time.