The #1 Wealth-Building Rule Attorneys Ignore (Ep. 109)
Are you a law firm owner striving to optimize your financial future and secure long-term wealth? Then this episode of The Lawyer Millionaire Podcast is a must-listen. This episode breaks down the #1 wealth-building rule that many high-income attorneys tend to overlook. Spoiler alert: It’s simpler than you think!
Rather than diving into complex investment strategies or focusing solely on your income, the episode highlights the often-ignored but powerful principle of spending less than you make. Darren dives deep into why many attorneys struggle with this, how lifestyle creep can sabotage even the highest incomes, and practical ways to start building wealth without feeling like you’re missing out.
Understanding Lifestyle Creep
As incomes grow, so does the temptation to expand your lifestyle—a phenomenon known as lifestyle creep. It’s easy to justify spending a bit more when you’re earning a high income, or when your income increases due to more business or a large settlement. But is this really the path to wealth?
Darren shares the story of a retired couple who lived modestly throughout their working years. Despite never living in a big house or driving luxury cars, they became incredibly wealthy by saving consistently. The essence of their success? Resisting lifestyle inflation and maintaining disciplined savings habits.
The Illusion of Wealth
In professional circles, especially in fields like law, there’s often pressure to “look the part.” Darren recounts how his father gifted him a Rolex to signify success. But is that what true wealth looks like?
Many people appear wealthy with their luxury cars and big houses, but they’re often drowning in expenses. The secret? Wealth is what you don’t see—it’s about what you keep, not what you show. It’s time to debunk the myth that looking rich is synonymous with being rich.
Combatting the Temptation
We live in a world that encourages spending, with credit cards making it easy to purchase beyond our means. Social media heightens this pressure by showcasing seemingly lavish lifestyles that are often not what they seem.
So, how can you bypass this? Start by automating your savings, treating it as a non-negotiable expense. This ensures that before any spending occurs, a portion of your earnings is building your future wealth.
Set Your Financial Path
Transitioning toward financial independence doesn’t require an eight-figure law firm or extravagant spending habits. Instead, it relies on understanding your financial limits. Define what “enough” looks like for you and automate savings to achieve it seamlessly.
Even when you receive unexpected bonuses or settlements, the key is to save half and invest it wisely to enhance your future security.
Conclusion: Prioritize Financial Security Over Lifestyle Choices
Ensuring long-term financial security isn’t about keeping up with the Joneses or purchasing every luxury you desire. It’s about making intentional, wise decisions with your earnings. As Darren advises, take your financial future into your hands by controlling spending and embracing strategic saving.
To law firm owners eager to embrace wealth without excess, The Lawyer Millionaire Podcast offers invaluable insights and advice. Stay ahead by prioritizing your savings, and remember—true wealth is about what remains unseen.
Connect with Darren Wurz:
Transcript:
Darren Wurz [00:00:00]:
What if I told you that the single most important financial lesson, the one that could make you a millionaire, maybe a billionaire, has nothing to do with investing, tax strategies, or even how much you earn. Welcome to the Lawyer Millionaire, the podcast that helps law firm owners build wealth, grow their firms and achieve financial independence. I’m your host, Darren Wurz, financial planner for law firm owners. Today we’re diving into one simple but powerful rule. Spend less than you make. I’ll share why even high income attorneys struggle with this, how lifestyle creep can silently sabotage your future, and practical ways to build wealth without feeling deprived. Let’s get into it.
Intro [00:00:45]:
We are on a mission to help lawyers and law firm owners maximize wealth and achieve financial independence. Welcome to the Lawyer Millionaire with Darren Wirtz from Wirtz Financial Services.
Darren Wurz [00:00:58]:
Law firm owners, are you ready to sharpen your financial mindset and take your practice to the next level? Join the Lawyer Millionaire Book Club, open only to lawyers, where we dive into powerful books that transform the way you think about money, business and success. It’s not just about books though. It’s about connecting with a community of like minded attorneys. Sign up now using the link in the show notes. All right, guys, let’s get into our topic today. Spend less than you make. How you doing in that arena, by the way? You know, some of my wealthiest clients don’t drive the nicest cars or live in the biggest houses. It’s so fascinating to me because I get an inside look at the lifestyle, the actual finance finances of individuals.
Darren Wurz [00:01:47]:
And I can tell you this is true. There are plenty of lawyers with luxury lifestyles who actually have less money in the bank. The real difference, it’s not about what you make, it’s about what you keep. This principle is deceptively simple but incredibly hard to follow. And today I’m going to explain to you why. You know, I’ve told this story before, I’ll tell it again. You know, a couple of clients of mine, they only, you know, they were older retired folks and during their working years they, they both had jobs, but they only needed one spouse’s income, the other spouse’s income. They saved the entire income.
Darren Wurz [00:02:32]:
They never lived in a big house, they had a very small house. They drove, you know, mid, mid range cars, you know, Toyota, you know, standard vehicles. And they retired multi, multi millionaires, amazingly wealthy just because they were able to save a ton of money their entire life. Now what am I saying? Should we all do that? Not necessarily, but let’s talk about it. Let’s talk about this because so Many people struggle with this. In fact, this is one of the number one reasons that people come to me. They’re making tons of money, high six to seven figures and struggling to save money. Why is that? Why is that? It’s such a difficult thing.
Darren Wurz [00:03:21]:
Well, let’s talk about one area, the trap of lifestyle creep. You know, as we get older, as our incomes grow, we tend to expand our lifestyle. When we get a raise or a big settlement fee, we naturally spend more and you know, sometimes rightly so. Right. You know, you’ve been living off of ramen right out of college and then you get your first big bonus and you start getting raises. And you know what, you’re like, hey, I deserve, I deserve something nicer. Right? The thing is, we tend to fill the space as human beings. We fill the space into which we go.
Darren Wurz [00:04:03]:
You ever notice that? That’s why they say don’t buy a big house because you’ll end up buying a bunch of crap to fill it with. Buy a small house and then, you know, you won’t be tempted to buy as much stuff because you won’t have the space to put it. In fact, you’ll want less stuff. The same thing happens with money, right? We fill the space that money creates. You get a big credit card with a big credit limit. What happens? You go out and you fill it up. Well, a lot of people do. Maybe you don’t.
Darren Wurz [00:04:30]:
Hopefully you don’t. But if you do, you’re in the right place because we’re going to talk about this today. You know, society is part of the problem too. We feel like we deserve a bigger house, a luxury car, lavish vacations. Not because we did anything special, but because we’re middle class professionals living in America. I should be able to go to the Bahamas on vacation. Or, you know, not saying it’s a lot of ways to go to the Bahamas. But, you know, I deserve to drive this certain type of car just because I am living in the country that I am.
Darren Wurz [00:05:07]:
Right. And because my neighbor drives that car. Right. It’s the comparing ourselves with the Joneses all the time. And that happens a lot in professional services, in the legal world, in the business world, you have well to do clients, you have well to do colleagues. There’s often a lot of pressure to look successful for those colleagues and those clients. And I get it. I totally get it.
Darren Wurz [00:05:31]:
One of the things, you know, when I started my business, my dad gave me a Rolex because he said I needed to look the part. And I understand it and I did. I had to look the part, I bought some very nice tailored suits. Ask me the last time I wore a tailored suit. I mean, this is post Covid, right? I’m jeans and a blazer all day long, right? Old Navy jeans at that, right? You know, but there is a need to look a certain part. Have you ever experienced that? But here’s the dirty little secret. The dirty little secret is many people appear wealthy but are actually drowning in expenses. That’s the dirty little secret.
Darren Wurz [00:06:15]:
You see the nice car they drive, you see the nice house they live in. But what you don’t see is the mortgage, the, the loan, the car payment that they also have to make. You don’t see that. And this is just part of our human nature, right? Money is this made up thing, right? And so it’s not easy to see. Everyone should keep all their money in a giant glass house. And then you could see how much money everybody has, right? No, but we don’t see, and this is one of the lessons we learned in the psychology of money is that wealth is what you don’t see. I’ll say that again. Wealth is what you don’t see.
Darren Wurz [00:07:04]:
A big house, a big car, that’s not wealth. 90% of the time you see someone driving a really nice car, living in a really nice house, they bought it on credit. All that means they’ve got a great credit score or they have a sufficient credit score to be able to borrow enough money to buy whatever that is. Instead of spending more as you earn, try to increase your savings rate instead. Right? We’re always tempted to continually expand our lifestyle. Find out where your enough is. Find out where you’re comfortable. Right here at this level.
Darren Wurz [00:07:40]:
This is good. I’m happy, I’m comfortable. And no, a bigger house won’t make you happier. Why do people downsize in retirement? They get frickin sick of a big house. I gotta clean all this crap, I gotta mow this big yard or I gotta pay somebody to mow this big yard. You don’t need all that downsize. Less is more so often in life. And there’s so many studies that support this, especially with kids.
Darren Wurz [00:08:04]:
And the amount of toys that kids have, less toys makes kids happier. I started seeing a lot of those studies that have come out, right? It’s amazing. The clutter, the stuff, the crap that we have is making us anxious, stressed out. It’s not making us happy. I want you to think back to when you graduated law school and when you were in law school and you were eating ramen, right? Or Whatever. Hopefully you weren’t eating ramen. I don’t think I ate ramen in college, but anyway, maybe a few times. Okay, yeah, you didn’t have two nickels to rub together, but I bet you were happy and maybe you weren’t.
Darren Wurz [00:08:42]:
I shouldn’t generalize, but, you know, people look back on those. Those were the. The good old days, right? The glory days. You know, the living in not having much, but. But, you know, having some friends and, you know, you can create happiness in any situation, any circumstances you’re in. It’s not about the stuff. So often we think it’s about the stuff, and the stuff is actually making us less happy. I hear this so often.
Darren Wurz [00:09:18]:
I just want to dispel this myth. I hear so often people say, you know what? I just want to have enough money that I can go into a store and I can buy whatever I want, and I don’t even have to think about money. I can just spend. I can buy and I can do whatever I want, and I just don’t even have to think about it. Get that out of your head. You will never, ever, ever, ever be able to just spend whatever you want and not even think about it. Billionaires can’t do that. Hello.
Darren Wurz [00:09:52]:
This is why NFL players go broke. Let me say that again. This is why multimillionaires lose everything. Because they think they can just spend whatever they want. No one can just spend whatever they want. And you will never be able to do that either. Okay? The sooner you realize that, the happier you’ll be. It’s not about the spending.
Darren Wurz [00:10:19]:
Okay, okay, I’m gonna calm down now. You know, there are some things in the world that make this more difficult. We live in a corporate capitalist society, and corporate America wants you to upgrade your lifestyle. Credit cards were not around forever. I know. I forget when credit cards were invented, but when credit cards were invented, watch out. Of course, the American economy boomed after that because people could spend, spend, spend. They could spend money they didn’t have.
Darren Wurz [00:10:51]:
And you know what’s really crazy about it? There’s a whole generation of people that started with credit cards, but their parents did not have credit cards. And so we as a human species have had to learn how to figure this out and how to deal with credit cards. We had no one to really teach us and train us how to. Credit cards are relatively new, a new invention in the span of human history. And then there’s social media, which fuels comparison. You see these people and, you know, they’re doing their social media, and they’re in these big houses and nice cars and 9 out of 10 times they are rented, they’re not owned. But even the government pushes us to spend more because consumer spending drives the economy. What did George bush say after 9/11? Go spend money.
Darren Wurz [00:11:42]:
Go buy. Buy stuff. Go buy stuff. Right. Keep the economy going. And of course there’s our own human nature. Human nature makes us crave instant gratification over long term security. It’s just part of the way that we’re wired and we live in a world of instant gratification.
Darren Wurz [00:12:01]:
We live in the Amazon TikTok world where you can just tap on your phone and it shows up tomorrow or sometimes it shows up tonight. I can get same day delivery. Just wait until Amazon gets drones flying in the air. The solution is being intentional. The solution is automation. Making it so that you can’t mess it up. Right? Automation setting. You know, doing things are going to force you to make the right choices.
Darren Wurz [00:12:32]:
Not deprivation, but strategic spending. If you’re struggling with this, by the way, we can help. This is one of the top things we do, cash flow planning. It’s a problem I love to help law firm owners think through and solve. Automating their cash flow, regulating their cash flow, making it, making irregular cash flow regular. And we can help with that. The link to schedule an intro call with me is in the show notes. You’re welcome to go down and click that link jump on my calendar.
Darren Wurz [00:12:59]:
And by the way, listeners of this show get $250 off your first month as a client. Just mention this episode. All right, so how do you build wealth without feeling deprived? Number one, automate your savings first. Treat your savings like a non negotiable expense. Increase your savings before you expand your lifestyle or anytime you get a raise, you get a raise automatically increase the savings. This is actually automating savings is one of the biggest impact things we’ve done for our clients. And I’m not talking about just setting up an automatic draw into an account, although that’s part of it. Setting up flows, flows into various accounts.
Darren Wurz [00:13:41]:
Right. So that you are putting things into buckets. Now let me tell you something really powerful. You don’t have to go build an eight figure law firm to become a multimillionaire. I’m going to say that again. You do not need to go build an eight figure law firm to become a multi millionaire. I know, I know. Everywhere we go on LinkedIn, Instagram, everyone’s talking about grow, grow, grow, grow, grow.
Darren Wurz [00:14:13]:
Get your firm to seven figures. Get your firm to eight figures. What’s going to be next? Nine figures. Well, great. You know, that’s great for some people and if you, if that’s what you’re passionate about, fantastic. But I just want to tell you, you don’t have to do that to become a multimillionaire. It’s one way. It’s one way you could do it, but it’s not guaranteed.
Darren Wurz [00:14:33]:
I mean, I know owners of multimillion dollar law firms that are struggling financially. Okay. Personally. Because the secret, the secret to wealth is in your spending. That’s the secret. It’s in your own personal financial habits. I have known owners of multi owners of eight figure law firms that have gone bankrupt. I’m just telling you this, I’m just being real.
Darren Wurz [00:15:05]:
It’s not about necessarily growing your law firm as big, as exponentially big as you can make it. Although that can help. Growing your law firm certainly helps and that’s certainly a noble pursuit. But that is not the one and only secret to wealth. In fact, I think it’s pretty rare. I think the more common method and approach is mastering your personal financial habits. And you can do both. You can master your personal financial habits and go build the giant law firm, great.
Darren Wurz [00:15:40]:
But you’re never ever going to become a multimillionaire if you don’t master your spending and savings, period. Not gonna happen. And I can say that definitively. The reason I can say that definitively is the encyclopedia of stories of multi millionaires who’ve gone broke. I’m just telling you. Okay, so automate your savings first and then follow some sort of percentage rule to put your money into different buckets. For example, maybe 50% in a needs bucket for your very basic needs. 30% in a wants bucket for.
Darren Wurz [00:16:22]:
Spend whatever you want on it. 20% into savings and investing. But make sure you’re prioritizing that savings and investing first. Number three, set a lifestyle cap for yourself. Just because you can afford something doesn’t mean you should afford it. Right? You don’t need to drive the nicest car. You don’t need to have the biggest house. And by the way, those are the things.
Darren Wurz [00:16:45]:
I mean, yes, the small things add up, but the big things, the big things really, really matter. Keep your major expenses below what you qualify for and you will be, you’ll be just so much happier. Number four, use your windfalls wisely. Bonuses and settlements. Take half and put it in your savings. Do it. You’ll be so much happier. A couple.
Darren Wurz [00:17:10]:
Take a quick story. A couple of my clients during COVID they sold their House. They bought a new house. Their old house had a bunch of equity in it, but instead of just rolling that equity into the new house, they took that equity out. They bought the new house with the mortgage, started over. New mortgage, new house. When they sold the old house, which had equity, they took the equity and they put it in their investments. And today they’re millionaires.
Darren Wurz [00:17:41]:
It was a couple hundred thousand. Today they are millionaires. Yeah. You know, so that’s, that’s the power, right? When you get those lumps of money, don’t just go blow it. Take a big portion, take at least half. Put it in your investments. You will thank me later. And finally, most importantly, define you’re enough.
Darren Wurz [00:18:07]:
What does financial security really look like for you once you hit your target? Shift your focus from spending to freedom, from growing to preservation. That’s where people. That’s where a lot of people go wrong. A lot of people go wrong. They hit their target, they get the money. They think they’re invincible. They blow it. Okay, don’t let that be you.
Darren Wurz [00:18:31]:
Next steps for you, go automate your savings today. Put it on autopilot. Pretend it’s a bill. It’s my electric bill. I got to pay it. True wealth isn’t about looking rich. You ever notice that? I walked into a networking event in Santa Monica, California, and there were like two rooms. I was in the first room.
Darren Wurz [00:18:52]:
It was a bunch of lawyers and other people. And then I walked into the back room and somebody stopped me and they were like, oh, I don’t know if you can be in here. These are the billionaires. This is, this is where the real money is. And yeah, there were some. There were some people in there, some multi business owners, people who had, had created and sold businesses multiple times. Multi exits, who were very wealthy. You know what I noticed? They were all in jeans and T shirts.
Darren Wurz [00:19:23]:
Now, that’s not always the case. Let’s be real, right? But don’t be deceived by what you see. Wealth is what you don’t see. By controlling your spending, you control your future. Start today. Set a goal to save a higher percentage of your income than last year. And by the way, this is what we do here at the Lawyer Millionaire. We’re here to be your advocate, to walk with you, to help you be successful, not only in growing the wealth, that’s one thing.
Darren Wurz [00:19:55]:
But then in staying wealthy, we can help you with that. And if you enjoyed today’s episode and you got something out of it, please connect with me on LinkedIn and tag me with your biggest takeaway. That would really be something. Well, anyway, that’s a wrap for this episode of the Lawyer Millionaire podcast. Thanks for joining me. I’m your host, Darren Wurz. See you next time.
Outro [00:20:23]:
Thank you for listening to the Lawyer Millionaire. Click the Follow button below to be notified when new episodes become available. This content has been made available for informational and educational purposes only. This content is not intended to represent investing or tax advice. Always seek the advice of a qualified investment or tax advisor with any questions you may have regarding your own financial circumstances.