In Tim Ferriss's book, The 4-Hour Work Week, he poses a deceptively simple question: Who is richer: Jane, who works 80 hours a week making $100,000 a year, or John, who works 10 hours a week earning $50,000?
The answer reveals everything wrong with how high-earning executives think about wealth. Jane makes $25 per hour. John makes $100 per hour. In relative terms, John is four times richer because he has both money and time.
Being rich isn't always about having more dollars. It's about having more freedom per dollar. And if you're an executive earning $200,000 or more but working 60-70 stress-filled hours per week, you might already have saved enough to retire comfortably, but you're trapped in a cycle that's costing you the one thing you can't buy back: time with your family.
The High-Earner Trap: A Real Case Study
As a certified financial planner, I've worked with countless executives who've made the same costly mistake: sacrificing their present life for a future they might not even enjoy. They miss their children's most important years while accumulating wealth they don't actually need.
Let me show you a real example. I've created a case study of an executive couple—both 45 years old with a combined household income of $400,000. They own a million-dollar home and have two young children. Like many of you, they're killing themselves working high-pressure jobs, convinced they must keep grinding until retirement age.
But when we run the actual numbers, we discover something shocking: They could step back from their executive roles right now, take jobs paying about half as much, and still easily retire at age 65 with over $5 million.
Three Misconceptions Keeping You Trapped
There are three fundamental misconceptions that trap high-earning executives in an endless cycle of working more to save more. These beliefs are so deeply embedded in executive culture that people never question them—even though they're responsible for keeping thousands of successful professionals working harder and longer than necessary.
Misconception #1: "I Need to Keep Saving Until Retirement"
Many people believe they must maximize their income and savings all the way up until retirement. But the truth is that once you've saved a substantial amount—especially if you've done it at a fairly young age like 45—the math of compound growth becomes almost magical.
The Financial Breakdown:
Let's look at this couple's current situation:
- Net worth: $1.8 million (exceptional for age 45)
- Cash reserves: $50,000
- Investment accounts: $1.5 million total
- Joint investment account: $200,000 (taxable)
- 401(k) assets: $1.2 million
- 529 college savings: $25,000 per child
- Home: $1 million value with $750,000 mortgage
- Combined income: $400,000 annually
With their current savings rate—maxing out both 401(k)s and contributing to 529s—their assets will grow to approximately $7.8 million by age 65. They have a 100% probability of meeting their retirement goals. In fact, they're projected to leave behind an $18 million inheritance by age 95.
But here's the critical question: What's the point of leaving an $18 million inheritance if it costs you 20 years of your life?
The Power of Compound Growth
Watch what happens with compound growth given what they've already saved:
- Age 45 (now): $1.5 million in investments
- Age 55: $4.2 million (after inflation)
- Age 65: $7.6 million (after inflation)
Now here's where it gets interesting: If they simply stopped saving extra money to their 401(k)s today, they'd still end up with about $6 million by age 65. That's still plenty—more than enough to meet their retirement goals.
The couple's goal isn't to leave the largest possible inheritance. It's to have a wonderful life as a family. So what is the point of all these extra assets if it costs them 20 years of their lives?
Misconception #2: "Reducing Income Means Financial Disaster"
The second big misconception is that reducing your income inevitably leads to financial disaster. Let's run an alternative scenario for this couple.
Currently, they each earn about $200,000 and spend approximately $8,000 per month plus mortgage, taxes, and healthcare. What if they reduced their combined income to just $220,000?
The result? They'd end up with about $3.8 million in today's dollars by retirement. This is still enough to meet their retirement goals and never run out of money. They can nearly cut their income in half and still hit their financial targets.
Three Critical Requirements:
This approach only works if you do three specific things:
- Maintain a stock-heavy allocation: Keep enough equity exposure to substantially outpace inflation throughout your life
- Delay Social Security until age 70: This increases your monthly benefit and improves overall probability of success
- Choose the right lower-income role: A $110,000 role is nice, but make sure it provides meaning and structure without the 70-hour work weeks
Misconception #3: "Retirement Itself Is the Goal"
This might be the most important misconception of all. I've seen too many executives save aggressively, retire early, and then find themselves miserable within five years.
Work provides purpose, structure, social connections, and intellectual challenge. When someone who's been highly successful suddenly stops working entirely, they often experience what I call "retirement depression"—they have plenty of money but no sense of meaning.
A Better Approach: FINC (Financial Independence New Career)
Instead of the traditional FIRE movement (Financial Independence, Retire Early), I recommend what I call the FINC approach: Financial Independence New Career.
By age 50, this couple will have enough wealth that money is no longer the primary factor in determining their career decisions. They can choose roles based on:
- Personal fulfillment
- Work-life balance
- Impact and meaning
- Time with family
They've essentially bought themselves the freedom to work by choice, not necessity. That's true financial independence.
The Real Goal: Buying Back Your Time
These three misconceptions all create the same problem: They prevent you from recognizing that you've already won the financial game.
Here's what I've learned after working with countless executives: The goal isn't to accumulate the most money. The goal is to accumulate enough money so that you can buy back your time and freedom as quickly as possible.
If you're a high-earning executive with substantial savings, you might have already crossed the finish line without realizing it. The question isn't whether you can afford to retire. It's whether you can afford not to reclaim your life:
- While you still have young children at home
- While your health is still good
- While you have decades ahead to enjoy the wealth you've built
The math is clear. The path is clear. The only question is: When will you give yourself permission to take it?
Ready to find out if we're the right fit for your financial planning needs? Schedule a complimentary discovery meeting where we'll provide a real assessment of how we can help your specific financial situation.
-A note from Bjorn Amundson, CFP®
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing contained in the material constitutes a recommendation for purchase or sale of any security, investment advisory services or tax advice. The information and opinions expressed in the linked articles are from third parties, and while they are deemed reliable, we cannot guarantee their accuracy.
