So how exactly are people affording so many luxury purchases nowadays? I thought I did things right - $225K+ job, $2M net worth, 36, live way below my means, invest in indices vs speculating, etc. Yet, I’m constantly stressed about going bankrupt, even though I thought I’d be at least be “doing well” with these habits. I go on vacation and see designer clothing everywhere, people flying business class, going to shows/expensive restaurants without a care, and I start to wonder where I failed?

“Live below my means”

That’s the difference between being fiscally successful / responsible and the people who buy luxury or designer goods.

Most of the people I know who wear luxury or designer stuff are renting, and/or would be stressed if an unexpected $5k or $10k bill came up… they’d rather live in “flash” and look successful than actually be successful. Good ol’ “fake it til you make if.

Honestly, it’s kinda sad but all too true.

You are likely "spending" a good portion of your salary on investing for the future while others may be spending for today.

That said, if you are constantly stressed about going bankrupt with $2M you are probably doing something wrong. Are you constantly monitoring investments and stressing about normal fluctuations? Are you invested more aggressively than your comfort level? Other risk factors?

Credit cards are a hell of a drug.

They could make more than you, be independently wealthy, have crazy debt, or just spend all their income and have no savings.

You failed to reconcile what you want.

Do you want to retire early, and live on less or work until normal retirement age and spend more?

Some people will always have more than you. Comparing yourself with others rarely a good idea

Bro you might need therapy if you have a $2M nw and are “constantly worried about going bankrupt.”

You may need to look at your situation more objectively… and you definitely need to take your focus off of what everyone else is doing.

Why are you worried about going bankrupt with a $2M net worth? That’s enough to FIRE for a lot of people.

Why do you think you’re not doing well? $225k annual income puts you in the top 5% of earners in the US and your age group.

If you feel like you’re missing out on life because you’re not flying business, going to nice restaurants, wearing fancy clothes, etc - maybe it’s time to ramp your savings rate down a bit so you can spend on those things. If you’re living below your means on $225k, you should have plenty of discretionary income.

Plus, the compound interest from whatever in that $2M you have invested should be snowballing pretty good by now.

I’m of the same stats and mind. $225k W2 salary, husband makes same, $550k household income with our businesses. 3.4mm NW. 2 kids. All the friends are flying business, doing private schools, expensive vacations, new cars. What I know from some close friends is that they don’t even have $1mm saved. Most people are appalled that we are retiring in a few years. We are almost 40 and want to FIRE and move before kids are 10yo. A couple who clears $1mm says that they need to work as long as they can to maintain their lifestyle and my guess is this what most people need to do to maintain…

As someone who has many friends in Miami, which I consider the capital of this, everything is not all that it seems. Most of the people flexing? Fraud, or ill gained wealth. Short term. No long term viability. Yes, the dream is sold to succeed in the corporate job and buy the boat house and cars, but reality is these people are over extending themselves and are nowhere near the savings you have with their depreciating cars (rented sometimes), expensive clothes, and jewelry that (besides watches) has no terminal value. 20 years from now, you will be in fundamentally different places.

I’ve come to appreciate that basically everyone my age in my town has significant family wealth that no one ever acknowledges. It’s true in my case and it’s the only way anything makes sense for any of the families we are friends with.

For some reason many middle-class people nowadays incorrectly believe the "Fake it till you make it" approach to life also applies to getting wealthy.

Im contrast, most self-made (multi)millionaires I know drive Toyota or similar and avoid designrr brands. I personally have a $5+M net worth and drive a Ford Explorer. My only luxury item is a watch that I purchased years ago to celebrate both a promotion and earning my 2nd $Million.

I know of two insanely wealthy people with over $20M NW that are even more luxury-averse than I am because theyre afraid of being taken advantage of.

Agree with much of the advice here!

I'm in a similar boat (with a lower NW closer to 1.3M), and we do micro indulgences. For example for our 10 year wedding anniversary (we are 32/33 just got married young) we went all out for 3 days. Booked a villa at Pelican Hill (using cc points we had saved up), then did some shopping at fashion land, and went out to some nice restaurants. We spent less than $2k cash, but it was crazy magical and fun. All this to say even the people you see spending might be on a "once in a decade adventure on points" and a reminder you can do it too without materially impacting FIRE ❤️

Wife and I retired early last year with $2.7Million invested across all accounts. Like you, I was nervous for about 2 years , and stressed that I didnt have enough invested.

Unlike you, I dont care at all about luxury branded clothes or stuff like that (My wife typically buys a new handbag every 1-2 years). Wife and I travel "Premium Economy" for any long'haul international trips since it provides near business class experience at about half the cost.

Although my spreadsheets said we could afford to retire, I got a second opinion via a paid Financial Advisor, and triple checked with a friend that is a CPA. All 3 said we could retire so I pulled the trigger last August.

The Iran war added anxiety around Sequence od Returns Risk because my invested balance dropped nearly 10%/by $250k.

Today our portfolio is over $3.25M, thanks to rebalancing my portfolio, adding a few new ETFs, and earning over $300k in the past 60 days.

All this to say, if your model says you can retire then give it a go.

Honestly, it doesn’t matter. There could be many reasons why these people spend more on material good than you. Ranging from they won the lottery to they are completely irresponsible with money. Execute your plan. You can’t worry about the Joneses. There may need to be a psychological reset though as you seem to be doing quite well but feel you are failing. That’s a you thing you need to figure out how to address.

Remember and stay focused on your own your priorities - not other people’s. Your post reads like a lot of social media FOMO - designer brand clothing, expensive shows & restaurants, business class flights - none of those are individually bad (except for designer brand clothing, buy quality, not a label) - but you’re likely not seeing the same people spending the same at each of those categories.

Some people will decide that comfortable flying is important, but they might not choose the same expensive restaurants that other people might and those folks may not see the same shows that others are prioritizing.

Basically, pick your own joys and stay in that lane, which I realize is easier said than done.

You may want it all, and by a lot of indicators you’re close to having it, but do. you. NEED. it. all?

I’m not suggesting you not enjoy your life, but if your baseline survival is getting activated by your overspending to due to personal comparison, you might need to take a breath and re-evaluate where you’re spending & why.

And I strongly recommend, take some of your annual designer-fashion spend and book a year of sessions with a very qualified therapist to explore your relationship with wealth and success. That was critical to unwinding a lot of my own emotional issues that had caused me to overspend.

2M is really nothing in the grand scheme of wealth... check your expectations. You are doing well but you are far from luxury spend in a sustainable way.

You did do it right. You did not fail. Good job.

Never chase or keep up with the Joneses. Too many ppl live paycheck to paycheck with levels of "bad dept" they should have avoided. Being truly wealthy and being able to FIRE comfortably means you have a strong handle on your expenses, not just your income/net worth. Too many ppl equate broadcasting symbols or wealth with actual wealth - don't fall into that trap.

Therapy.

And ditch social media.

Dude, my family’s net worth is about $10 million. We don’t have any kids, and I still feel this way.