10 Biggest Financial Mistakes High Income Earners Make

November 14, 2023

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Written By - Ravi Shankar (GoodMindKeeping)

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High income earners often assume their sizable salaries equate to naturally savvy money management. High income do not automatically translate into financial wisdom.

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Here, we'll explore 10 biggest financial mistakes high income earners make and provide tips to avoid these hazards. 

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Adhering to intelligent money management principles allows any income to be leveraged into true financial success. 

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1. Assuming Their High Income will Continue Indefinitely 

High income earners should be cautious about locking themselves into an expensive lifestyle that assumes income will never decrease.

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2. Continually Pushing for Higher Income without Considering Consequences

Working 80 hours a week may boost income but can affect health, relationships and happiness.

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3. Growing Lifestyle too Quickly as Income Rises 

Spending all your high income on payments and debt will keep you broke no matter how much you make.

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4. Taking Unnecessary Investment Risks

High risk also means the potential for huge losses. Focus on a long-term investment strategy with an edge.

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5. Investing too Heavily in Illiquid Assets

Things like rental properties, antiques or collectibles may seem like attractive investments. 

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6. Overcomplicating their finances 

Spreading money across too many accounts, investments and advisors can complicate finances unnecessarily. 

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7. Surrounding themselves with the wrong financial advice

Financial salespeople and advisors often target high earners looking to profit from them. 

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8. Poor Tax Planning 

Proactive tax planning could save thousands but is often neglected. Consulting a tax pro can identify tax-saving opportunities. 

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9. Not having proper insurance coverage 

Good insurance protects earning and assets, yet many high income earners have insufficient coverage.

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10. Looking down on basic financial literacy

Many high earners disparage basic money management strategies as beneath them. 

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Staying focused on innovative money management is vital for long-term financial success.