300: Finance Friday: How to Avoid the “Middle Class Trap” When Building Wealth

BiggerPockets Money Podcast

You’ve heard of middle-class money traps before. Like spending your whole paycheck on rent, not paying yourself first, and the sneaky seduction of obsessive eating out. Today, we’re talking about a far less known type of middle-class trap, the type that keeps your wealth growing but limits the amount of “freedom” you feel in the process. Oftentimes, savers can find themselves in a position with a big cash surplus but hold tight to it to feel “safe” instead of feeling flexible.

Today’s guest, April, falls into this category. She’s done a phenomenal job at building a millionaire life, keeping large cash savings, and diligently investing in retirement accounts. She’s in a favorable position, but it’s not the position she wants to stay in. April wants to feel a true sense of financial flexibility, with the option to leave her job or decrease the amount of time she spends working. But, to do this, she’ll have to confront her limited “cash scarcity” mindset and chase other investing options.

Scott and Mindy guide April on exactly how to do this, walking through various types of investment options that she (and you at home) can use to maximize a lifestyle for freedom, not just wealth. Even a financial powerhouse like Mindy struggles with these same issues, and you might too once you hit millionaire status!

In This Episode We Cover

Whether or not you’re overinvesting in retirement accounts (and how to find out if you are)

Converting from a scarcity mindset to money abundant mindset to truly take worthwhile risks

Investing in passive income streams like rental properties, syndications, and dividend stocks

How much to keep in your cash position and when to start investing your excess capital

HELOCs (home equity lines of credit) and how they can combat a low-cash position

Whether or not to pay off your mortgage early (or your car loan!)

And So Much More!

Links from the Show

BiggerPockets Money Facebook Group

BiggerPockets Forums

Finance Review Guest Onboarding

Scott's Instagram

Mindy's Twitter

Apply to Be a Guest on The Money Show

Podcast Talent Search!

Subscribe to The “On The Market” YouTube Channel

Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets

Check Out Mindy’s 2022 Live Spending Tracker and Budget

BiggerPockets Money Podcast 243: Ramit Sethi's Money Advice for Couples: Live a Rich Life, Together

BiggerPockets Money Podcast 260: Finance Friday: How to Hit $10M Net Worth in 10 Years (Or Less)

BiggerPockets Money Podcast 18: Accessing Retirement Funds Before Age 59½ with The Mad Fientist

Learn more about your ad choices. Visit megaphone.fm/adchoices