From Earning to Investing: Turning Income into Freedom

For years, I thought that earning more was the key to freedom.

And in a way, it was—but not for the reason I imagined.

I used to believe that if I just worked hard enough, stacked enough cash, and hit a certain income level, the rest would take care of itself. I’d feel secure, successful, and eventually free.

But the truth was, the more I earned, the more complicated things got. I had more expenses, more obligations, and less clarity on how to use that income to build a future I didn’t need to escape from.

At one point, I had multiple businesses, a sizable real estate portfolio, and a solid six-figure income—but I wasn’t free. I was just busy. And even though I was “doing well,” I still had moments where I felt like my finances were slipping through the cracks.  My biggest problem was that I didn’t have a plan, a goal, or any kind of path in view to follow.  I was going full steam in every direction—only to realize I was just running in circles.

What finally changed everything was when I stopped seeing income as the goal.  I developed a plan—and started using my income as fuel for building actual wealth.

Why High Earners Stay Broke

Here’s something most people don’t realize until it’s too late: high income does not equal high net worth.

Some of the most stressed-out people I’ve met have incomes north of $250,000. But they’re drowning in lifestyle creep, managing too many moving parts, and hoping things “settle down” at some indistinct point in the future.

Here are a few of the biggest traps I’ve seen (some I’ve personally fallen into):

• Not paying attention to the details. Little leaks—like insurance renewals, subscription creep, or neglected investments—can quietly drain thousands a year.  Who is still paying for a gym they haven’t been to in months or years?

• Assuming things will just improve with time. The reality? If you’re not actively planning, most financial situations drift toward disorder, not prosperity.

• Lifestyle inflation. You start spending based on income, not priorities. It feels normal—until you realize your freedom is being bought by things you don’t even value that much.  This one hit me hard. Beautiful house. Frequent travel. Everything expensive. But none of it really made me happy.  Looking back I didn’t really want any of it.  It was all about trying to impress or satisfy other people.

• Waiting for the perfect time to invest. Paralysis by analysis keeps a lot of people in cash—where inflation slowly eats their purchasing power alive.  The best saying I’ve heard is “Don’t wait to buy real estate, buy real estate and wait”.  This is also true of most investments, especially those that generate income.  Stocks, especially hot stocks, are probably the biggest caveat to this advice, since they have a tendency to take drastic moves based on the news cycles rather than on the earnings and growth.

• Overpaying in taxes. Without proactive planning, high earners are some of Uncle Sam’s best customers.  This gets ugly fast…yikes.  It’s (relatively) easy to legally avoid this monstrous expense.  But it does require advance planning.  This is a recurring theme with investing.  Money saved should be money reinvested, this alone could fund your retirement if you do it right.

The truth is, it’s not about how much you make. It’s about what you do with it.

The Identity Shift: From Earner to Investor

This was the mindset change that unlocked everything for me:

Every dollar you earn is either fueling your freedom—or feeding your lifestyle.

High-income earners are often stuck playing defense. They’re trying to protect what they’ve earned, avoid mistakes, and keep everything afloat. But real wealth comes from going on offense.

I had to stop thinking like an operator and start thinking like an owner. The question wasn’t how can I earn more? It became how can I make what I earn start working for me?  There are really just three numbers that matter: your earned income, your passive income, and the percentage of that total being reinvested.  The goal is for your investment percentage to stay high, your passive income to continuously be increasing.  As it increases your earned income becomes less and less relevant.  

You don’t need to be a full-time investor. You just need to make investing part of your identity.

Because the real secret is this:
You can’t save your way to prosperity. You have to invest your way there.

The Income Allocation Framework (Pay Yourself First)

This isn’t your budget. This is your freedom plan—how you allocate income for building real, lasting wealth.

If you’ve read the earlier articles, you’ll recognize this as a part of the “wealth pyramid” system from the foundations of wealth. In that system your budget is composed of needs, wants, investments, and charity.  This is a further allocation of the investments portion:

Here’s how I break it down:

1. Liquidity Reserve (First Priority)

Start by building a reserve fund—your financial buffer against life’s curveballs.
But don’t just let it sit idle in a bank account earning 0.01%.

• Keep it very liquid and accessible

• But aim for a competitive return (think high-yield savings, money market funds, or even whole life cash value depending on your strategy)

• This is your protection against short-term disruption and a launching pad for future investments

You don’t need a huge reserve, ideally you’d have 3-6 months of your budget built up to ensure there is no disruption at all to your lifestyle, but that will take a while to build, and would consequently cost you a lot in lost investment returns.  

The alternative would be use 100% of your investment dollars to build up 2 months worth of needs, then reduce that allocation to maybe 75%, possibly less if you feel your income is very secure. 

 Once you’ve built up a more substantial reserve then you can drop to 50% and continuing dropping it until you hit 0% when you have that 3-6 months of total budget saved up.

2. Investment Allocation

Once your reserve is in place, begin allocating toward income-generating assets that build long-term freedom.
These are less liquid but more powerful.

This is where the compounding starts doing the heavy lifting—and where your high income starts turning into real wealth.

3. Protection Planning (Allocated Along the Way)

Wealth without protection is fragile.

You’ll want to intentionally allocate funds for things like:

• Asset protection structures (LLCs, trusts, etc.)

• Appropriate insurance (life, disability, umbrella, liability)

• Legal and tax strategy support

These aren’t optional—they’re essential. And when you’ve set aside the funds in advance, they don’t feel like a burden—they feel like a safeguard.

What to Invest In (And What Not To)

Let’s get clear on this upfront:

If it doesn’t generate income, it’s not an investment. It’s speculation.

And speculation can be fine—but it comes with extra pressure. You need to time your exit, time your re-entry, and stay engaged enough to monitor it. Most high earners don’t have that kind of time or interest.

I recommend most investors to stay away from speculation, or at the very least minimize it to 10-20% of your total investment dollars.  Instead, here’s what I focus on—and recommend to others looking to buy back their time:

📈 Income-Generating Investments

• Cash-flowing real estate (either self-managed, syndicated investments with professional operators, or platforms like Arrived and Fundrise)

• Dividend stocks or ETFs built for long-term income

• Oil, gas, or IP royalties

• Silent partnerships or equity in small businesses

• Index funds (solid choice, especially for automation, but income is often delayed)

💡 My “Whole Life Policy Wash” Strategy

When I have a larger amount to invest, I don’t just invest it straight away or let it sit in cash.
I “wash” it through a properly structured whole life insurance policy.

Why?

• It earns a stable return while I wait.

• It adds protection and structure.

• It lets me borrow against it later to invest without liquidating.

• It gives me a lifetime of flexibility with those dollars, and the dollars they create in the future, and huge tax advantages

(We’ll cover this “whole life washing” strategy in detail in a future article—it’s a powerful wealth preservation and acceleration tool when used correctly.)

Reinvesting Is the Game

High-income earners become wealthy not just by investing once—but by reinvesting constantly.

Here’s the truth: Your earned income should absolutely be allocated and invested.

But that’s just the beginning.

The income from your investments must also be reinvested—at least for a while—if you want true freedom.

This is what separates the wealthy from everyone else:

• They don’t spend all their income—even when they could.

• They always reinvest a portion of their returns.

• They create rules for when and how much of their passive income they’ll spend.

Here’s an example of what this could look like:

• Once your passive income exceeds $10,000/month consistently, draw no more than 40% for lifestyle or to offset reduced earned income.

• As income increases, gradually raise the percentage you spend.

• But always keep a healthy portion reinvesting—because that’s what creates unstoppable momentum.

Without a reinvestment plan, you risk stalling your growth—or worse, slipping backward.

Wealth isn’t just about getting paid.

It’s about what you do with the income your money makes.

Buying Back Time

This is what it all leads to:

The goal isn’t just to have more money. It’s to need less from yourself to make it.

Every dollar you invest in the right income-producing asset is a dollar that works so you don’t have to.

For me, this has meant:

• More time with my kids.

• Less stress about income fluctuations.

• More freedom to say no to things I don’t want—and yes to things that matter.

That’s the real power of investing. Not the status. Not the spreadsheets.

The freedom.

Start Here: A Simple Action Plan

• Audit your income. Where is it going today? Be honest.

• Pick a percentage. Start investing 20–50% of your income and increase as you grow.  Even if it’s 1% I promise whatever you allocate, as long as it comes out automatically, you’ll never miss it and you’ll adjust your lifestyle to not having it.  If you’re addicted to your paycheck this may be the only way to kick that habit of overspending.

• Choose one path. You don’t need to master everything. Pick one strategy and get help if needed.

• Use tools that align with your strategy. That might include IRAs, solo 401(k)s, whole life policies, trusts, or LLCs.

Most importantly: Get started now. Not someday. Not when it’s “calmer.” Now.  Remember, “buy real estate and wait”

Final Thought

High income gives you the opportunity. But only investing gives you the outcome.

The moment I started treating every dollar as a soldier—working for my future rather than funding my present—everything changed.

And that’s what I want for you, too.

📚 Recommended Reading

• Profit First – Practical cash allocation strategy
  
  

• Becoming Your Own Banker – Strategy behind the whole life “wash”
  
  

• The Gap and the Gain – Reframing progress and staying focused
  
  

• The 4 Disciplines of Execution – For setting and following reinvestment rules
  
  

• Cashflow Quadrant – Understanding the shift from earner to investor
  
  

• The 80/20 Principle – Maximize effort vs. reward in income and investing