Why the Wealthy Still Feel Broke
Financial freedom is typically defined as a number: enough passive income to cover expenses, a specific net worth, the ability to retire early. But here’s what the numbers don’t explain: why do people who achieve these milestones often still feel financially anxious?
The answer lies in how human needs actually work.
Stability Is Not Wealth
First, a distinction that changes everything: financial stability is not the same as wealth.
There are millionaires who suffer from terrible financial instability, and there are modest-income families who are models of stability. If you are financially stable, your finances enhance—not detract from—your health, relationships, quality of life, and peace of mind.
Financial stability is the ability to handle your financial obligations in a way that contributes positively to other areas of your life.
By this definition, someone earning $60K with a solid foundation, manageable obligations, and mental space for other concerns is more financially free than someone earning $600K who is anxious, overextended, and consumed by money.
The Mechanism Nobody Talks About
Maslow identified something that upends conventional thinking about money:
“A satisfied need is not a motivator.”[^1]
When you satisfy a need, it doesn’t feel like satisfaction. It feels like the emergence of a new need. The person who finally achieves stable housing doesn’t feel “done”—they feel the awakening of needs for security, then belonging, then esteem.
“Man is a wanting animal and rarely reaches a state of complete satisfaction except for a short time. As one desire is satisfied, another pops up to take its place.”[^2]
This is the mechanism behind lifestyle inflation. It’s not a failure of discipline. It’s how human motivation actually works.
The person making $40K struggling with safety needs and the person making $400K struggling with esteem needs both feel equally constrained. Each satisfied level unlocks the next level of need, which feels just as urgent as the previous one.
The Bandwidth Tax
Here’s the cruel part: financial stress doesn’t just feel bad—it makes you less capable of solving the problem.
Researchers Mullainathan and Shafir found something striking:
“Being poor reduces a person’s cognitive capacity more than going one full night without sleep. It is not that the poor have less bandwidth as individuals. Rather, it is that the experience of poverty reduces anyone’s bandwidth.”[^3]
Scarcity—of money, time, or other resources—captures the mind automatically. It’s not a choice. When resources are tight, cognitive capacity shrinks. You have less mental energy for planning, impulse control, and strategic thinking.
This “bandwidth tax” means those who most need good decision-making are the most cognitively burdened. Scarcity at the foundation level literally makes it harder to think your way out of scarcity.
The Tunneling Effect
The bandwidth tax creates what researchers call “tunneling”:
“When scarcity captures the mind, we become more attentive and efficient at what’s inside the tunnel. But we neglect what’s outside.”[^4]
The paradox:
- Scarcity makes you focus intensely on immediate problems
- This tunneling causes you to neglect important non-urgent things (saving, planning, health)
- The neglect creates more scarcity
- The cycle perpetuates itself
Financial freedom starts with breaking this cycle—not because higher needs don’t matter, but because unmet lower needs will hijack your attention and cognitive capacity whether you want them to or not.
Freedom To What?
But here’s where conventional advice gets it wrong: once your foundation is solid, higher-level spending isn’t irresponsible. It’s human.
Maslow asked directly:
“Who is to say that a lack of love is less important than a lack of vitamins?”[^5]
When higher needs emerge, they can dominate consciousness just as completely as hunger dominates the starving. The person desperate for respect, connection, or meaning isn’t experiencing a “lesser” need—they’re experiencing a different but equally powerful human drive.
Financial freedom means being able to allocate resources to connection, growth, and confidence without guilt—because you can see clearly that your foundation is funded and your bandwidth is freed.
The Real Question
Financial freedom isn’t about reaching a number where needs stop. That number doesn’t exist.
It’s about building a foundation solid enough that it doesn’t consume your bandwidth. It’s about seeing clearly what needs your money is serving. And it’s about allocating resources to higher needs with full awareness of what you’re doing and why.
The pyramid doesn’t tell you what to spend on. It shows you what you’re already spending on, so you can choose consciously instead of being swept along by needs you haven’t acknowledged.
[^1]: Maslow, A.H. (1943). “A Theory of Human Motivation.” Psychological Review, 50(4), 370-396.
[^2]: Maslow, A.H. (1943). “Preface to Motivation Theory.” Psychosomatic Medicine, 5(1), 85-92.
[^3]: Mullainathan, S. & Shafir, E. (2013). Scarcity: Why Having Too Little Means So Much. Times Books.
[^4]: Mullainathan, S. & Shafir, E. (2013). Scarcity: Why Having Too Little Means So Much. Times Books.
[^5]: Maslow, A.H. (1943). “A Theory of Human Motivation.” Psychological Review, 50(4), 370-396.