The Real Reason You're Broke (It Has Nothing to Do With Lattes) | Mrs. Dow Jones

Psychological Roots of Financial Behavior and Shame

Haley Sacks emphasizes that money relationships are formed early, often by the age of seven, shaped by family attitudes and early experiences. If parents speak about money with a mindset of scarcity—saying, “we can’t afford that”—children internalize that approach. Sacks encourages parents to instead say, “we’re saving towards something else,” to instill a value-driven mindset focused on working toward shared goals rather than deprivation.

Sacks describes her first money memory—wanting a snack at school, lacking money, and secretly taking some from home. This led to feelings of shame and the belief that she couldn't rely on herself for money, a feeling that shaped her later financial behaviors. She identifies how money shame often comes from trying to hide financial realities and internalizing a belief that self-worth is tied to net worth—a mindset reinforced by a world where money literally buys value and experiences.

Shame is perpetuated when individuals think their financial standing directly reflects their intrinsic value, leading them to hide aspects of their financial life and compounding insecurity. Sacks affirms that although individuals are responsible for their financial choices, significant external forces—cultural, systemic, and historical—also drive financial anxiety. She encourages confronting these factors openly because acknowledging systemic issues can reduce self-blame and empower personal change. Sacks insists it’s impossible to discuss wealth-building in America without recognizing the societal forces—especially for those who are not typically privileged by race or background—that make financial freedom more difficult but not unattainable.

Dangers of Aspirational and Emotional Spending

Sacks warns that in today’s frictionless financial environment, impulsive and emotional spending is easier than ever. Mobile payment systems and immediate transactions make it simple for purchases to serve as a quick fix for difficult emotions. Many people now use spending as a form of emotional regulation.

Modern consumers face unusually high ad pressure, seeing up to 5,000 advertisements per day compared to 500 for previous generations. This barrage of aspirational messaging normalizes spending as a way to attain lifestyle goals displayed online or by influencers. Sacks observes that seeing so many seemingly extravagant lifestyles online can drive individuals to try and recreate those experiences through consumption—buying expensive items in the hope they will acquire the associated status, happiness, or fulfillment.

However, this often leads only to debt and stress rather than satisfaction or security. Sacks describes her own experience of spending a $3,000 check on a Louis Vuitton bag to signal success and value, only to have difficulty paying rent that month. She now recognizes this as “looking rich” rather than “being rich,” and she calls out financial trends like the Birkin bag culture, where luxury goods are misleadingly framed as sound investments, encouraging people—especially women—to spend for the illusion of security and status.

Sacks identifies these behaviors as learned financial helplessness, a response to feeling the economic system is rigged. When people believe real opportunities are out of reach, they may fixate on shortcuts like luxury goods, ignore finances, or disengage from wealth-building entirely.

Identifying the Difference Between Projecting and Building Wealth

Sacks and Lewis Howes explore how true wealth differs from displaying wealth. Wealthy individuals tend to prioritize experiences, relationships, time, and health over visible markers like designer brands. Sacks has learned from her frugal yet successful father that meaningful wealth is not about the projection but about low-key generosity, investing in quality, and consistently saving and investing for long-term growth.

Expensive purchases are often used as a shortcut to success in a system perceived as unattainable, but they rarely provide lasting security. Real wealth, as Sacks describes, is about financial independence—having freedom, living authentically, and not needing to chase external validation thro ...

Haley Sacks, author of "Future Rich Person," and Lewis Howes discuss the essential steps to not only make financial progress but also to create a sustainable and empowered approach to money. Sacks lays out three rules for building wealth: cultivating the right money mindset, identifying and wisely deploying your action money, and directing your financial energy toward actions that deliver long-term results.

Rule one: Develop a Healthy Money Mindset Through Self-Examination

Sacks emphasizes that true and lasting financial change comes from addressing the root causes of your relationship with money. She explains that without facing your own beliefs, patterns from childhood, and family influences, all the financial advice in the world won't create lasting change. The first chapter of her book is simply titled "Face It," reflecting that individuals must confront the real sources of their financial behaviors before any transformation can occur.

Financial wounds, Sacks says, often hold lessons and power. By embracing these wounds and ceasing to avoid finances, individuals unlock the potential to change not just their bank accounts but their lives. The process involves becoming aware of personal triggers and emotional responses to money, which then enables intentional, rather than habitual, choices—like breaking the cycle of impulsive spending or striving to "keep up with the Joneses." Sacks asserts that emotional regulation and awareness of how money feelings developed are keys to shifting from avoidance to empowered action, leading to more sustainable financial habits.

Rule two: Identifying and Deploying Your "Action Money"

Next, Sacks introduces the concept of "action money," the surplus funds left after covering all expenses. This money is critical—it doesn't matter whether you have a small or large income; if you don't have action money, you won't make progress. Sacks asserts that everyone, from the average person to Warren Buffett, needs this surplus to build wealth.

A key part of keeping action money available is constructing a budget that includes space for enjoyable expenses. According to Sacks, entirely depriving yourself leads to burnout and ultimately causes people to abandon their financial goals. Enjoyment and practicality must co-exist for long-term commitment.

Sacks also introduces the idea of "financial energy." She compares it to physical energy: everyone wakes up with motivation, but it gets depleted by the end of the day. She warns against spending this finite energy on constant, minor savings—like cutting out every coffee or doing without pre-chopped vegetables. Instead, she recommends that people channel their financial energy and action money toward impactful strategies that have lasting effects.

Rule Three: Maximize Financial Energy Toward Wealth-Build ...

Haley Sacks and Lewis Howes discuss actionable strategies for building wealth, focusing on skill development, smart investing, and leveraging practices common among wealthy individuals.

Earning More Through Skill Development and Career Advancement

Skill enhancement is fundamental for increasing earning potential. Sacks cites that 70% of people who actively improve their skills witness significant career and income growth. In today’s era, especially with the rapid pace of AI advancement, technological literacy is crucial. Sacks stresses that rather than fearing AI’s disruption, it is those who learn to use AI effectively who will secure better job prospects and higher incomes, making tech literacy a vital wealth-building strategy. She highlights personal use of AI tools like Claude Co-Work to streamline financial management, illustrating how these innovations can save money and improve organization.

Sacks also notes that staying in the same job without substantial raises can stagnate financial progress. Strategic career moves every two to three years—seeking 10–20% salary increases, rather than waiting years for modest raises in a static role—prove far more lucrative over time.

Harnessing Compound Interest as the Primary Wealth-Building Mechanism

Early and consistent investing leverages compound interest—the most powerful force in wealth accumulation. Sacks explains that investing just $200 a month starting at age 25, assuming an 8–10% annual return, can yield over $700,000 by retirement. Delaying even a decade and starting at 35 can cut this amount by at least half, emphasizing the immense benefit of starting early.

The core principle of compound interest is that early investments grow much more rapidly than larger sums invested later, as earnings continually generate more returns. Sacks urges investors to remain steady even during market downturns; volatility is the “tax” for long-term growth and often provides discounted buying opportunities. She likens investing during market lows to purchasing valuable goods on sale. The key is not to withdraw in panic, as losses are only locked in upon selling. A robust emergency fund is essential so funds dedicated to investments are not required in the short term, allowing compounding to work uninterrupted.

Sacks advocates for low-cost index fund investing, the same vehicle often used by billionaires, advising against chasing get-rich-quick schemes. Slow and steady, consistent investing wins in the long run. She references Warren Buffett’s grounded approach as the philosophical basis: invest early, often, and don’t aim for extraordinary returns, but rather average, reliable growth.

Implementing Wealth Strategies Used by Wealthy Individuals

Wealthy families, especially old money, excel at using leverage. Sacks explains that old wealth multiplies its assets ...

Financial independence stands as the foundation of personal freedom and fulfillment. Haley Sacks and Lewis Howes explore how controlling your own finances is the most reliable way to attain autonomy over your life, relationships, and choices.

Transformative Power of Self-Reliance and Rejecting Financial Dependency

Haley Sacks describes the experience of being financially dependent on others as limiting and constraining. She observes that when you rely on someone else—be it parents, partners, or others—for your financial needs, "you don't have any ability to leave and it keeps your life really small." Freedom is earned by generating your own income rather than relying on others, such as rejecting ongoing family support or not basing relationships on money. Sacks gives the example of her best friend, who had a pattern of seeking financially successful partners but found that dependence on a partner’s wealth limited her ambition and autonomy.

According to Sacks, dependence on someone else always brings expectations and compromises, granting others power over your decisions. She emphasizes, "nothing's free, even in relationships." Only after becoming financially independent did Sacks shift her self-perception from helplessness to capability, realizing she could actively build a life she wanted and make autonomous choices.

Howes echoes this, noting that overcoming his "money wound" provided a sense of independence and freedom from dependency. Sacks adds that despite technological advances and automation, you can never fully abdicate responsibility for your financial life—if you aren't in charge, "someone else will be."

The example of Rihanna further demonstrates the importance of self-reliance. Early in her career, despite incredible success, her lack of financial management knowledge led to financial mismanagement and tax issues by her advisors. Once she took control, fired her advisors, and became directly involved in her finances, she not only recovered but thrived, ultimately becoming a billionaire. Sacks stresses, "no matter where technology goes, you still have to have an eye on your bottom line or someone else will."

Inherited Wealth and Family Subsidies: Hidden Constraints

Financial support from family, while seemingly beneficial, often comes with strings attached. Sacks reflects on her own experience of "family debt"—a subtle but impactful form of dependence, even in adulthood, as family subsidies carry implicit expectations. She shares, for example, that parental support for rent meant a lack of full freedom and a feeling of indebtedness, with considerable emotional and practical constraints.

Sacks also describes how financial aid from family can be tied to power dynamics, using the example of a mother-in-law who finances her son's wedding but takes control, turning it into her own event. She points out that such generosity is never without conditions: the expectation to live next door, choose certain schools for children, or accept other forms of control over life decisions.

Inherited wealth, Sacks notes, can be even more limiting if not accompanied by financial education. She recalls her father’s concern for children of wealthy families who become aimless or helpless because they never learn to manage money or develop purpose. Without fostering competence and responsibility alongside abundance, inherited wealth can encourage dependence and erode self-worth. Sacks emphasizes that true generational wealth requires teaching financial literacy, not just giving money.

The Relationship Between Financial Independence and Life Autonomy

The relationship between financial independence and life's autonomy is particularly profound for women. Sacks highlights that, until recently, women had severe financial restrictions—unable to have credit cards until 1974 or take out business loans without a male co-signer until 1988. These shifts are r ...