Humphrey Yang: Avoid These 3 Mistakes To Become Part of the Top 10%
Written by
Ashley Donohoe
Edited by
Zuri Anderson
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The Federal Reserve Survey of Consumer Finances noted that the median household net worth was $192,900, while the top 10% of Americans had at least $1,938,000. That 2022 data didn’t account for inflation, meaning the amounts are likely somewhat higher now.
Becoming worth nearly $2 million might sound unreasonable considering your current finances, but financial YouTuber Humphrey Yang believes it’s doable if you avoid three money mishaps. In a recent video, he broke down these common problems and offered advice for joining the top 10%.
Lifestyle Inflation
Yang discussed how even many six-figure earners are having trouble paying their bills, which shows that a top 10% income isn’t a guaranteed path to joining the top 10% in terms of wealth. Often, these high earners fall for the lifestyle inflation trap.
“Lifestyle inflation occurs because as we make more money, we think that buying more goods and services are going to bring us more joy and more happiness, but spoiler alert: It actually doesn’t,” explained Yang.
Since this habit isn’t a long-term solution for a satisfying, wealthy life, you’ll want to be intentional with how you budget and spend money so you can contribute more funds to investments and other assets that build wealth.
Expensive Car Payments
For the second quarter of 2025, Edmunds reported that 20% of new car buyers were paying over $1,000 per month for their car payments, and some buyers were turning to 84-month terms.
Yang discussed how unaffordable car payments are a problem alongside increasing vehicle expenses, like car insurance. His advice for becoming part of the top 10% was to not spend more than 10% of your pre-tax monthly income on the loan payment, maintenance and insurance combined.
Following this guideline might require saving a bigger down payment, picking a less luxurious model or buying used. But you’ll benefit from less financial stress and more available funds for wealth building.
Sitting on the Sidelines
Some people hold off on investing money since they’re looking for the perfect timing, like a dip that they could profit from. However, Yang said you won’t get wealthy that way and discussed the positive impact of consistently investing.
An S&P 500 index example from Fidelity showed how missing just five peak market days over a 36-year period could mean a hypothetical 37% difference in investment gains. There’s also the drawback of seeing your money’s purchasing power decline if you hold cash rather than invest.
“Unless you’re retiring soon and need to preserve your short-term wealth, it is often better to just stay invested in the market,” Yang advised.
Yang’s Steps for Joining the Top 10%
In addition to avoiding these mistakes, you can follow the four steps that Yang outlined for achieving a net worth in the top 10%.
First, he recommended using a monthly budget so you can track your income and expenses and determine the margin you have for building wealth. Ideally, you’ll cut expenses as much as possible and funnel your leftover cash into investments for retirement.
You should also get rid of your high-interest debt, which lowers your net worth and takes away from the income you could invest each month. Focus on debts with rates above 10%, which may even be higher than your investment growth.
Next, Yang recommended saving and investing at least 15% of your income, with 20% to 25% being even better. This will put you ahead of the average American, who Yang said saves or invests closer to 5%.
Finally, put that money to work to see your wealth grow. For example, if you earn $90,000 per year and choose a 20% investing rate, you’d regularly contribute $1,500 per month. A compound interest calculator shows you’d have around $2 million in 30 years based on an 8% return.
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