Millennials making $200k are still broke—here's why

High-income millennials in tech are now living paycheck to paycheck as they overestimate their stock compensation and delay financial planning, creating a wealth trap that quietly drains them.

More than 35% of Americans earning over $200,000 are living paycheck to paycheck, according to LendingClub’s 2024 report—a stark reality in an economy where high salaries no longer guarantee financial security. Among tech workers, this trend applies to a minority—but those affected face unique challenges.

Samuel Deane, founder and president of Atlanta-based Rora Wealth, built his practice to address this exact reality. Launching his firm at 26, Deane focuses on guiding tech professionals through the financial pitfalls hidden behind equity compensation and unstable cash flow. His approach sheds light on why traditional financial advice often misses the mark—and what it takes to build lasting wealth today.

“This generation is facing challenges that previous ones haven't,” Deane explains. “Between equity comp, job market volatility, student loan debt, just the cost of living in major tech hubs, financial planning can look very different today than it did 20 years ago.”

One of the biggest blind spots, he says, is the false sense of security that stock options create. “So many tech professionals assume that their stock options will make them wealthy, and that can be the case, but it's not always the case,” he says.

The illusion often obscures critical risks tied to vesting schedules, tax exposure, and company-specific outcomes. “Imagine all the employees who took a role at TikTok thinking that their options were going to help them be millionaires,” Deane says.

But the real danger isn’t optimism—it’s inertia. Waiting for a liquidity event like a bonus, IPO, or stock sale before addressing financial needs can be devastating. “Delaying those decisions, especially around taxes, saving, or even insurance, can cost a lot more down the line,” he warns.

Lifestyle inflation compounds the risk, particularly among young professionals chasing rapid success. “We're all young. There tends to be this habit of wanting to be an overnight millionaire,” Deane says. Despite enviable incomes, many live precariously close to the edge. “People are living at like the edge of their income, even with multiple six figures coming in,” he adds.

Designing a financial life, not just a budget

Rather than push clients toward rigid budgets, Deane’s approach emphasizes intentionality. “It's less about budgeting and more about intentional design,” he explains. “Live your life by design, like design your ideal life and do the things that you need to do to give yourself that fulfillment.”

This ethos shapes how Rora Wealth addresses one of its biggest value propositions: tax strategy.

Taxes dominate client conversations far more than investment picks. “I would say we talk about taxes, probably more than we talk about investing,” he says, recalling a client who watched their net worth balloon from $300,000 to $4 million in a single year—only to face a six-figure tax bill. “No one likes to pay taxes, especially tens of thousands in taxes,” he adds.

Rora Wealth’s integrated model, offering tax filing and planning in-house, gives it a crucial edge. “We’re sort of like a one-stop shop for all things money,” Deane says. This becomes even more vital when handling complex equity compensation, where missteps can be costly.

Equity compensation: Promise vs. reality

“Not all equity is created equally,” Deane says. He points to examples like WeWork where valuation declines left many employees holding underwater options. “If you were granted equity during those years where the valuation was at its highest, your strike price now is higher than what the valuation would be,” he explains.

Understanding vesting schedules is equally critical, yet often misunderstood. “More than half of tech employees leave their companies before they're even fully vested,” Deane says.

His team helps clients weigh what they’re leaving behind before jumping to new roles. “It doesn’t necessarily mean you should stay,” he adds. “But you should make an informed decision.”

Planning around taxes is another cornerstone of Deane’s process. “We do tax projections throughout the year,” he says. “To know that [your tax bill] in October and to have nine months to plan to pay that bill in April is very different from finding out in March and having a few weeks to pay that bill.”

Beyond service offerings, Rora Wealth’s brand itself signals a generational shift in financial advice. Instead of focusing on retirees, it speaks directly to tech-savvy younger professionals navigating a different financial reality. “If you go on my website and come across articles that I've written, it feels like this person is talking directly to me,” Deane says.

The content isn’t just tailored—it’s a filter. “If you are not a tech employee, you probably won’t even know what incentive stock options are,” he explains. “You’ll just end up dismissing it.”

Deane built Rora Wealth from scratch at age 26 while living with his parents, with no clients and assets. His growth strategy was simple: make expertise visible. “Putting our brains on the internet,” Deane says. “Trying to help very specific people, and in turn, those people reaching out because they saw that I was an expert in the things that they considered pain points.”

A new generation of wealth builders

And it's resonating. Where the traditional retirement-centric model still clings to the question of “when can you retire,” Deane’s clients have a different goal. “It’s about time, freedom and flexibility,” he says.

That shift is mirrored in how younger investors approach assets. “Older generations looked to stocks and bonds. Younger generations are looking to real estate and crypto and alternatives,” Deane says.

They’re also more conscious about aligning investments with their values. “I have clients who say to me, ‘Hey, I don’t want to invest in anything related to Elon Musk. I don’t want to invest in anything related to tobacco or gun violence,’” he says.

Financial advisors who don’t adapt risk being left behind. “If this is a demographic that we're going to be serving for the foreseeable future, we need to know how to approach that,” Deane says. “They want to invest in crypto; they want to invest in alternatives. They don't just want to have stocks and bonds.”