You've Already Made a Million Dollars (Here's Where It All Went)
Good morning! I've got a lot to get off my chest today, and it starts with this profound realization: You've already made a million dollars. Probably two. Maybe even five.
And yet, you have almost nothing to show for it.
Before you dismiss this as impossible, let me walk you through the math that will completely change how you think about money, spending, and wealth building. Today, I'm going to show you how to shift from short-term thinking to long-term planning by understanding the cost of missed opportunities.
The Million-Dollar Math That Will Shock You
Let's start simple. From age 20 to 45 – that's 25 years. If you make just $40,000 per year during that entire time (which is below average), you've earned $1 million.
$1,000,000 ÷ 25 years = $40,000 per year
But here's where it gets interesting. Most people's income grows over time. If you start at $40,000 and work your way up to $96,000 by age 45, you've actually made $2.4 million over those 25 years.
So where did it all go?
Your "Non-Negotiable" Expenses Are Eating Your Wealth
Let me break down what the average person spends money on from age 20 to 45:
Monthly Non-Negotiables:
Mortgage: $2,000
Utilities: $600
Internet/Cable: $120
Childcare: $200
Auto (payment + insurance + gas + maintenance): $800
Food (groceries + dining): $900
Other debt payments: $600
Insurance (health, life, dental, vision): $900
Total: $6,120 per month
That's $73,440 per year just in non-negotiable expenses.
Now, when you're younger, your expenses might be closer to $2,500 per month ($30,000/year). As life gets bigger – house, family, better lifestyle – they grow to that $6,000+ per month.
Here's the shocking part: Over 25 years, you'll spend between $750,000 and $1.8 million just on these non-negotiables.
The Discretionary Income You're Wasting
Let's run two scenarios:
Scenario 1: You make $40,000/year, spend $30,000/year on non-negotiables
Total earned over 25 years: $1 million
Total spent on non-negotiables: $750,000
Discretionary income: $250,000
Scenario 2: You make $96,000/year, spend $72,000/year on non-negotiables
Total earned over 25 years: $2.4 million
Total spent on non-negotiables: $1.8 million
Discretionary income: $600,000
The million-dollar question: Where does this extra $250,000 to $600,000 go?
It goes to:
Random spending
Interest on debt
Market losses
Impulse purchases
Things you can't even remember buying
What That "Extra" Money Could Actually Do
Let me show you something that will make you sick to your stomach.
If you took that discretionary income and simply put it in a 4% high-yield savings account:
Scenario 1: $10,000/year for 25 years at 4%
Instead of $250,000, you'd have $433,000
Scenario 2: $24,000/year for 25 years at 4%
Instead of $600,000, you'd have $1.03 million
And that's just with a basic savings account!
What could you do with $433,000 to $1.03 million after 25 years?
Pay off your mortgage completely
Buy a second home for rental income
Build a legacy that passes to your children
Purchase vehicles, art, collectibles
Have multiple investment accounts (401k, IRA, IUL)
Create true financial security
Why Most People Reach 45 With Nothing
Here's why this doesn't happen for most people:
They don't know they should be saving the discretionary income
They think short-term instead of long-term
They don't break down expenses vs. income properly
They don't understand non-negotiables vs. negotiables
They don't calculate their lifetime earning potential
They don't plan and track their money properly
The Real Client Success Story
I have 25-year-old clients who just had a baby and make a combined $120,000 per year. They're already saving $20,000 per year into a properly diversified portfolio. They're working on real estate for passive income.
Why are they succeeding while others fail? They're forward-thinking. They're not focused on their pockets right now – they're planning for 25 years from now.
And here's the beautiful part: they're having more fun than people living paycheck to paycheck.
The Income Diversification Formula for Wealth
If you want to build real wealth, here's how to allocate your income:
30% Living Expenses (your non-negotiables)
10% Taxes
25% Debt payments and short-term savings (emergency fund)
35% Investing and charity
This is the road to wealth. If only 30% of your income goes to living expenses, you have massive amounts left for wealth building.
The Three Money Filters Destroying Your Wealth
Every dollar you earn goes through filters that can destroy its value:
1. Inflation Filter ⚠️
Bank accounts, cash under mattress, low-yield savings all lose to inflation
Spending on anything immediately exposes money to inflation
2. Market Filter 📉
Some investments can lose value in market downturns
Poor investment choices destroy wealth
3. Tax Filter 💸
Most spending isn't tax-deductible
Wrong account types get hammered by taxes
The secret: Put your money in places that avoid these filters – tax-advantaged accounts, inflation-hedged investments, and smart asset allocation.
Start Planning Like Your Future Self Depends On It
I don't care where you are financially right now. If you properly plan and organize your spending using this system, you can build serious wealth.
Yes, it's harder when you have lower income. But NOT planning because you feel broke is like knowing your bank account is being emptied and refusing to look at it.
Here's what you need to do:
Calculate your lifetime earning potential (age now to retirement)
Break down your non-negotiable expenses over that timeframe
Identify your discretionary income
Start treating every extra dollar as precious
Implement the 30/10/25/35 allocation formula
Book an appointment to go over your wealth building blueprint
The Bottom Line
You're going to make millions of dollars in your lifetime. The question is: what will you have to show for it?
Most people reach retirement with almost nothing because they never understood this simple truth: making money isn't about the income coming in – it's about what you keep.
I've shown you the exact math. I've given you the allocation formula. I've explained the filters that destroy wealth.
Now the choice is yours: Continue thinking short-term and wondering where all your money went, or start planning long-term and build the wealth you deserve.
Your future self is counting on the decisions you make today.
This article is an excerpt from my podcast, The Success Blueprint, which airs live Monday, Wednesday, and Friday mornings at 8 AM CDT on my YouTube channel or here on LinkedIn. Follow Charming I. for updates on the live podcast. Want to dive deeper into building responsibility-driven success? Check out our resources at reforgedhq.com and discover how to create your own success blueprint based on responsibility, not motivation.
