As the new year kicks off, many of us make renewed commitments to finally get our finances in order. We vow that this will be the year we stick to a budget, crush our debt, and build substantial savings. The allure of perfect finances is strong. But the hard truth is that complete financial security will likely always elude us. Here are some reasons why.

Reaching the Top Tier of Wealth is Rare

Becoming truly wealthy, meaning joining the ultra-rich elite, is extraordinarily rare. The famous “one percent” is exactly that – just one percent of the population. 

Even if you live in an advanced country, diligently save and invest, and are extremely financially disciplined, your chances of attaining great wealth are slim at best. Various studies and surveys have tried to quantify exactly how rare it is:

– The Millionaire Next Door, a popular finance book, defined millionaire status as having a net worth of \$1 million or more, excluding your primary residence. Based on their survey of Americans in the 80s and 90s, only around 5-10% had accumulated this level of wealth.

– A 2021 study by Wealth-X found that only 1% of American adults are millionaires when measured in USD. Globally, less than 1% of adults worldwide are millionaires. 

– The Global Wealth Report by Credit Suisse found that in 2021, only 1.1% of American adults had a net worth exceeding $5 million. The threshold was 2.4% globally.

So across various studies, only around 10-20% of people will ever attain millionaire status. And in the last few decades, that threshold for being considered wealthy has increased substantially with inflation. Having $1 million dollars in net worth doesn’t even make you properly “rich” by today’s standards. 

Assuming you follow the 4% rule for safe portfolio withdrawals, \$1 million would only generate \$40,000 in annual passive income. While certainly livable in low cost areas, that is far from the luxurious lifestyle most associate with real wealth.

The hard truth is that even if you live in an advanced country, save regularly, invest wisely, avoid excess spending, and do everything “right” financially, your odds of joining the ultra-rich elite are extremely slim – almost like winning the lottery. 

Why We Aren’t Told Becoming Wealthy is Unlikely

If becoming financially wealthy is indeed so rare, why aren’t we told this more often? Why do so many finance gurus make it sound attainable for the average person?

Simply put, selling the dream is better for business and more appealing than the harsh reality. Personal finance influencers can sell far more courses, books, and coaching programs with taglines like:

– “Follow my steps and you too can become a millionaire!” 

– “Learn how I retired at 35 thanks to real estate investing!”

– “These 5 tricks helped me crush my debt and build wealth fast!”

Telling their audience bluntly that only 1 in 100 people will ever join the millionaire club – despite their best efforts – doesn’t hook people in quite as effectively. Bursting the wealth-building bubble crushes hopes and dreams rather than monetizing them.

Similarly, finance books that focus on everyday millionaires “just like you” have much more mass appeal than books about building dynastic wealth more relevant to the ultra-rich. The millionaire next door who clipping coupons and driving a used sedan is a lot more relatable than the mogul landing their Gulfstream V jet at a private airport.

People want to believe the dream of attaining substantial wealth through discipline and hard work is achievable for anyone. Selling that fantasy, even if unrealistic for most, is simply better for business and more appealing than the harsh reality.

High Income Earners Still Struggle

Okay, you might be thinking, maybe becoming ultra-wealthy is out of reach for the average person. But certainly high income earners have an easier time getting their finances in order, right? 

Well, not necessarily. Many high income earners still struggle greatly to manage their money and achieve financial stability. Here are some of the top reasons why:

Lifestyle Inflation

As your income rises throughout your career, your lifestyle and spending tend to scale up as well. This “lifestyle inflation” can quickly devour any additional income gained by raises or promotions.

Trading up to ever more expensive houses, cars, clothing, vacations, schools, and social activities becomes almost mandatory to “fit in” at higher income levels. Refusing to keep up with your peers would make you an outsider. 

For example, the young investment banker making $80k can get away with shared housing, public transit, and a used economy car. But the veteran banking executive pulling in $800k is expected to have a luxury house, new BMW, tailored suits, and send their kids to expensive private schools. 

Much of this added spending is required to maintain a certain high-status lifestyle and social standing. Saying no to lifestyle inflation altogether means saying no to advancing in your career. The higher you move up, the more your expenses rise in lockstep.

Workplace Pressures 

Many high-paying careers also come with significant personal sacrifices and pressures. Long hours, high stress, frequent travel, and unreasonable demands from employers can leave little time or energy for focusing on your personal finances. 

Jobs like corporate law, investment banking, management consulting, and tech startups often expect 60-80+ hour workweeks. This grind burns people out and saps time that could be spent on money management. Waiting for the big payoff down the road also encourages current overspending.

In addition, many lucrative careers require relocating to extremely high cost-of-living areas like New York, San Francisco, Hong Kong, or London. Good luck trying to save and invest living in these cities on a middle class salary. Geographic flexibility counts for a lot. 

Enjoying the Rewards

Lastly, people pursue ambitious careers in part to enjoy the rewards like prestige, luxury goods, world travel, and immediate gratification. After so many years of education and hard work, it’s understandable they want to enjoy the fruits of their labor.

But living well in the moment makes it tough to have much leftover for aggressive savings and investing. The energy trader might earn $500k, but he works crazy hours under immense pressure. So on the weekend he wants to blow off steam and not think about money.

Trying to resist lifestyle inflation, workplace pressures, and the urge to enjoy their high salaries altogether can leave high earners feeling very deprived of the rewards they worked so hard for. It’s a difficult balancing act.

So in summary, even those lucky enough to earn substantial incomes will likely never fully figure out their finances and find complete peace of mind around money. There are simply too many competing interests and forces pulling at their wealth for it to ever feel “sorted.”

Financial Perfection is Elusive for Everyone

Here’s the universal truth of money: NO ONE ever fully “figures out” their finances. Not the middle class, not millionaires, not even billionaires. The more money people earn, the more money problems they tend to have.

Sure, with extreme discipline you may be able to save up a respectable nest egg over decades of work. You can become financially stable and comfortable. But truly attaining complete peace of mind around money is nearly impossible. 

For the average person, monthly expenses just seem to grow to meet income. An unexpected home repair bill or job loss can quickly drain savings accounts. Markets go through periodic crashes that wipe out portfolio gains. Reaching “financial nirvana” remains perpetually out of grasp.

Even the mega-rich spend more time worrying about complex investments, wealth preservation, tax minimization, and inheritance planning than the average person does just making rent each month. There will always be some new estate tax regulation, market crash, or overseas turmoil that threatens their balance sheet. 

Warren Buffett, one of the richest people in the world, still famously lives in the same modest house he bought in the 1950s and drives an old Cadillac. He understands that no matter how large your net worth grows, some money stress always remains.

So while skills like budgeting, smart investing, and delaying gratification are extremely worthwhile, don’t drive yourself crazy chasing perfection. Focus on mastering the basics, building healthy financial habits, and finding contentment in what you have. Some money worries will always nag at you – for both paupers and princes alike.

So in summary, while complete financial mastery will remain elusive for most people, dedicating time to improve your money management can certainly pay dividends. Focus on adopting healthy financial habits rather than perfection. Small steps forward are still progress.

Final Thoughts 

As the new year begins, many of us feel renewed motivation to finally get our finances sorted out once and for all. We start budgeting religiously, searching for savings, and vowing this will be the year we get rich. 

But in chasing the illusion of perfect wealth and stability, we often lose sight of what matters most – finding balance, building connections, and appreciating what we have right now. 

Your energy is better spent developing reasonable money management skills than in the endless pursuit of financial nirvana. With some prudent saving and investing habits, you can still live prosperously. But expecting to eliminate all money worries altogether is unrealistic. Even the richest people have financial stress.

Rather than an endless pursuit of perfection, set some realistic financial goals for this year that are meaningful for your situation. Focus on progress through better habits. Patience and perseverance pay off more than get-rich-quick schemes.

What are your biggest money challenges at the moment? Are there any financial habits you want to work on cultivating? What are some realistic money targets you can set for yourself this year?