How To Spot A Financially Illiterate High Income Earner….

A financially illiterate high‑income earner is easy to spot: they earn a lot, but their decisions reveal that they don’t understand money, risk, or long‑term planning. An even bigger danger is that society often uses them as a poster child and a measure of financial success, copy‑and‑pasting the habits they believe will help them achieve similar results.

Below are some of the clearest ways to spot a financially illiterate high earner. It is important to recognise these behaviours, because you may find yourself easily influenced by someone you perceive as more successful than you are.

1. They have a high income, but never have money. They live paycheck‑to‑paycheck with no budget, no tracking, no emergency fund, no savings, no sinking fund, no clear strategy. They don’t understand compounding and they do not see the need to change anything.
   

2. They Celebrate Tax Refunds. They treat tax refunds as though it is free/bonus money and an obvious financial hack. A tax refund usually mean that you overpaid on tax all year and gave SARS an interest‑free loan, i.e. Retirement Annuity contributions. Financially literate people plan ahead and adjust their income tax withholdings accordingly
   

3. They Celebrate Reward Programs. They treat rewards from loyalty programs as free/bonus money. They think they are being rewarded for spending that they "would have done anyway". They do not understand how loyalty programs use psychology to get them to overspend.
   

4. They Finance Lifestyle, Not Assets. The upgrade cars every 2–3 years, rent upmarket apartments, spend heavily on status items(latest cellphones, loud branded clothing) and have no meaningful investments outside those that are forced by employment contracts or those that earn tax refunds. They often confuse income with wealth.
   

5. They Only Look at Monthly Payments. They buy cars, furniture, or gadgets on credit and proudly say “It’s only R3,000 a month.” They ignore interest rates, fees, total repayment cost, and compounding debt.
   

6. Private Clients, More Debt. They often fall into debt traps and justify it with the lower interest rates that are received by being a private client.
   

7. They Don’t Understand Their Own Financial Statements, Or Financial Concepts. They cannot understand or explain their own tax bracket, effective interest rate, net worth, retirement gap, insurance covers(in detail) or investment fees.
   

8. They Think Earning More Will Solve Everything.  They are highly mobile in the labour market and often job‑hop for higher salaries. “I just need to make more.” But without financial literacy, higher income only scales bad decisions.
   

9. They often have difficulty seeing things from perspectives that are different from theirs, especially when dealing with people they consider inferior or who earn less than they do. “I make more money; what can you teach me.”
   

10. They Normalize Financial Chaos. They frequently overdraft, pay bills late, have bounced debit orders, borrow from family and friends, use payday loans, justify credit‑card use “as long as you settle it every month”, and regularly use “Buy Now, Pay Later” for non‑essentials.

As a bonus, below are some of the real-life ways I spot high income financially illiterate people online. They just make it too easy.....

• Will always comment about tax on every post that talks about interest income. "Always focus on the NET income, not the interest rate"

• Often dismisses anything that is different from the commercialised financial literacy.

• Will often criticise without offering a constructive improvement

• Will dismiss government bonds but will swear by reg 28 investments (tax effect)

• Will talk about best investments “for high tax brackets”. If you don't agree, then you don't understand tax

• Retirement Annuity is a solution to every investment question

• Often compare the interest rate on debt against growth rates on investments when deciding whether to invest or pay off debt first

• The sole purpose of their lives has become about “paying less tax”. They think they are sticking it to the government

• Often cash out their retirement plans when resigning or changing jobs. The tax tables for lump-sum withdrawals were more favourable than their marginal tax, cashing out the investment was seen as a lucrative hack

• Think being in a lower tax at retirement is a definition of success

• Any view different from theirs is just wrong

Do you have any of your own? Please share and let's educate each other