$500K and Still Feel Broke
Why the "paycheck to paycheck" headline says more about our relationship with money than our bank accounts.
It seems to happen every few months or so. There’s a headline like this:
These types of stories are perfect headlines because they have the ability to make everyone angry. The wealthy feel misunderstood, and everyone else feels vindicated.
The stat comes from a Goldman Sachs New Economics of Retirement report which talks about how housing, healthcare, childcare, and college are creating a “financial vortex” that makes traditional retirement advice of “just save more” feel out of touch.
The showstopping chart responsible for the headline above is this one:
At first glance, the final column says 40% of those making $500k or more are living paycheck to paycheck.
However, if you gave it more than a glance, you’d see the question and response:
Question: How would you describe your financial situation?
Answer: I find it tough to make progress on any long-term financial goals.
I understand surveys would be invading someone’s privacy if they had access to someone’s account balances, but this is quite the leap to say that not making progress towards long term financial goals equates to living paycheck to paycheck.
First things first, making progress on long term goals is supposed to be hard! Just about anything worthwhile in life takes a tremendous amount of time and effort. Why would financial goals be any different?
If it were easy, no one would care or strive for it.
It’s also worth highlighting that the magic of compound interest is time and the heavy lifting happens in the later years. Technological innovation has done a lot for the world, but speeding up time will never be possible. Financial success cannot be microwaved. It’s best in a slow cooker.
We also live in a world where it’s never been easier to feel behind in life thanks to social media. Socioeconomic comparison has reached grossly unhealthy levels and the genie is completely out of the bottle. A $500k earner scrolling through their feed isn’t comparing themselves to their neighbors anymore. Today they’re comparing themselves to the most curated, highlight-reel version of the wealthiest people on the planet.
It’s important to also point out that living paycheck to paycheck isn’t necessarily a bad thing. I wrote about this years ago. My personal finance system doesn’t leave a ton leftover. By the time my payroll deductions are taken out, automatic transfers take place, bills are paid, and I’ve spent on the things that bring me joy - there’s almost nothing leftover.
But who cares? I’ve watered every financial plant in the garden, and it’s perfectly normal for lots of them to not bear fruit for quite some time.
The Goldman Sachs report is genuinely worth reading. The data on competing financial priorities is real, and there is a serious squeeze on everyday savers. But headlines that conflate “not yet where I want to be” with “broke” are misleading and do more harm than good. They make people feel like victims of a rigged system when the truth is that building wealth has always been slow, unsexy, and deeply personal. If you’re earning good money, directing it intentionally, and playing the long game, you’re not broke. You’re just not done yet.