The Biggest Obstacle to Building Wealth? Lifestyle Creep.

Early in my career on the trading floor of the Chicago commodities exchange, I learned something early and hard: success in that world isn’t about how big your account looks, it’s about how much cash you actually have to absorb the swings and volatility that come with trading. One month you might win, the next you might lose—and if you haven’t built a buffer, your lifestyle becomes your liability.

I saw—and personally experienced—traders who had great months, sometimes great years, only to lose their edge because they adjusted their lifestyle to match short-term success. The account grew, the new car arrived, the upgraded home followed… but when the wins slowed, their trading suffered. Without margin to handle an off month or a down year, even the most talented traders found themselves under pressure—and pressure is the enemy of good decision-making.

Though I only traded for about ten years and didn’t get rich doing it, the lesson was invaluable: do not adjust your lifestyle to your income or even your wealth. In trading, that truth plays out quickly. In most professions, it plays out more slowly—but the outcome is the same. Those who let lifestyle rise with every bump in income eventually lose the margin that drives long-term wealth, career flexibility, and even healthy marriages.

You’ve probably seen it too. A friend gets a big raise and immediately upgrades to the high-end SUV. A couple moves into the bigger house thinking, “We’ve made it,” but a year later they’re stretched thin with higher taxes, insurance, and maintenance.

Meanwhile, you’ve also heard the stories of teachers or janitors who quietly retire as millionaires. They didn’t avoid spending; they simply resisted the urge to let their lifestyle expand every time their income did.

That discipline matters. Studies show that lifestyle creep—spending more as income grows—is one of the main reasons high earners fail to build wealth. According to SoFi and Fidelity research, even among Americans earning over $500,000 a year, roughly four in ten live paycheck to paycheck. The money is there; the margin is gone.

 If you ask me what the single biggest obstacle is to building lasting wealth, it’s lifestyle creep. In more than twenty years of working with hundreds of families and interacting with thousands of affluent professionals, this pattern shows up more often than any investment mistake or market downturn.

When spending rises alongside income without a corresponding increase in savings or investing, you consume the very potential you should be compounding. The result? Less ability to take career risks, less resilience during market pullbacks, more tension in relationships, and delayed financial independence.

Here are three practical ways to push back:

1. Have a Plan. Focus on two or three specific financial to-dos every 9 to 18 months. For example, increase your 401(k) contributions, update or create your will, and pay off a targeted debt or two. It sounds simple, but if you keep this rhythm over four or five years, you’ll have tackled a dozen or more important financial tasks. And when your income increases or a bonus arrives, decide in advance what portion will go toward savings or investing before making any lifestyle upgrades.

2. Be Diversified—not just in investments, but in lifestyle. As you work through your financial to-dos, remember that diversification isn’t limited to your investments. It also applies across tax exposure and time horizons. Aim to hold assets in different tax categories—such as a Roth IRA, a traditional IRA or 401(k), and a taxable brokerage account—so you have flexibility as tax laws and income needs change. Likewise, diversify across time and purpose. Keep an emergency fund that’s liquid, medium-term investments that grow steadily with moderate volatility, and long-term investments that fuel future wealth. True diversification balances risk, access, and opportunity—not just returns.

3. Seek Counsel. Seeking counsel goes beyond reviewing a plan or investment portfolio with a financial advisor. It means gathering input from multiple perspectives—AI tools, professionals in their fields, people who have already achieved success, and your advisor. Each offers a different angle. When you take time to weigh the best, worst, and likely outcomes, decisions become clearer and more confident. Lifestyle choices belong right alongside investment or tax decisions in the boardroom of your life.

   
   

The real enemy is subtle but powerful: the quiet belief that “if I earned X, I can spend X + Y.” The danger is that it feels reasonable in the moment. It happens slowly—new furniture here, a slightly nicer trip there—until one day the margin that once protected you has disappeared.

As Investopedia puts it, lifestyle creep is like a slow leak in a bucket. You don’t notice until you’re running dry.

“Financial success is not an event, it is the accumulation of all the financial decisions we make over decades.”

At the heart of that quote lies a warning: don’t let lifestyle creep turn your accumulation of good decisions into an accumulation of consumption.

DISCLOSURE - All written content on this article is for information purposes only. We utilized ChatGPT and other sources for this article. Opinions expressed herein are solely those of Core Wealth Consultants. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. Core Wealth Consultants, LLC a Registered Investment Advisor in the States of Florida, Indiana and Michigan. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Diversification and asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss.