Brian Dress, CFADirector of Research, Investment Advisor, Left Brain Wealth Management, LLC · Wealth Strategy for Corporate Executives & High-Net-Worth Investors | Concentrated Stock & Equity Compensation Planning | Director of Research | CFA | Left Brain Wealth Management

The Hidden Wealth Killer: Lifestyle Creep in Corporate America. #LifestyleCreep #FinancialPlanning

22 Aug 2025 · 2 min

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1:33

In this video, the speaker addresses mid‑career executives who, as their salaries rise, often see their living expenses increase at a similar pace—a phenomenon known as lifestyle creep. He emphasizes the importance of “paying yourself first” by automatically increasing investment contributions (deferred compensation, employee stock purchase plans, 401(k)s, restricted stock) in line with income growth. While corporate‑sponsored auto‑funding programs are powerful wealth‑building tools, they can also create a psychological illusion that the post‑deduction paycheck is entirely discretionary, encouraging overspending. The speaker advises executives to deliberately raise their savings rate as earnings climb, using automatic payroll deductions to avoid the trap of expanding consumption and to build lasting financial security.

Chapters

As a mid-career executive, you know, you have a family, you have kids, you want to go on vacations, kids need braces, they need to go to college. And then eventually the kids, you know, the kids need more space. And so you move up, you like a nicer house. Yeah. You want a nice ride. And one thing leads to another. And there you sit. Your income has gone up, but your expenses have gone up at a commensurate rate. So we always just tell executives, you You know, one thing to think about is as your income grows, think about increasing your investment at a commensurate rate and pay yourself first so you don't fall into this lifestyle creep. You know, I think it's a sort of a blessing and a curse. The way that corporate America is set up today, a lot of these plans that you and I are talking about, the deferred comp, employee stock purchase, 401(k) plans, restricted stock, these are kind of auto funding programs. It was like a set it and forget it. I think that's worked well, you know. We have trillions of dollars in these plans, right? So it has worked, but almost too well, because I think psychologically we think, now that I have my paycheck, if we've taken out every deduction you can think of, including my healthcare, FICA, all of this stuff, what I get left is mine. But there's one more investment we'd like to make, which is our savings for ourself. Yeah. And we can do that right out of our checking account automatically. But that's one of the things that can lead to lifestyle creep, overspending, and it can lead to all sorts of bad habits.