Why Everyone Feels Richer Than You (But Probably Isn’t): Sammie Ellard-King Explains

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[00:00] Sammie: If you’ve ever scrolled through LinkedIn or Instagram and thought, why is everyone doing better than me? Why is everyone buying houses and getting promoted and going on nice holidays and I’m just here treading water? Well, you are not alone because I get messages like this every single day. And I get it because I have been there myself. A few years ago, I was 24 grand in debt. 24 grand in debt. Credit cards, loans, all of it. And you know why? Because I was trying to keep up, trying to look like I was doing well. The car, the clothes, the nights out, all on credit. And you know what it got me? It got me a black hole of interest payments and feeling even more behind than I was when I first started. It took me 18 months to claw my way back out of that, and I have never looked back since. So when I say what I’m about to say, I am not saying it from a textbook.

[00:49] Sammie: I’m saying it because I’ve lived it. You are not behind. I know it doesn’t feel like that way right now, and I know that it feels like everyone’s moving forward and you’re just standing still. But the truth is, guys, most of those people you’re comparing yourself to, they are not ahead. They just look like they are. And today I’m going to prove it to you on the Money Gains podcast. I’m going to show you the real numbers. I’m going to explain the psychology behind why we all feel this way. And then I’m going to introduce you to two people, Simon and Mark, who start in exactly the same place, but end up over 80,000 pounds apart. The same salary, same decade, completely different outcomes. So if you’ve ever felt like you’re falling behind, stick with me because by the end of this, you’re going to see things in a very different way.

[01:35] Sammie: Now, part number one is the reality check. So let’s start with some numbers. And I think some of these might actually surprise you. The income reality is if you’re earning £2,200 a month take home and that’s after tax in your pocket, you’re already an above-average earner in the UK. Now I’ll say that again, £2,200 a month after tax puts you above average. And I’m guessing that’s a lot less than you thought. And you’re probably already there or quite close to it. Now, look, I totally understand £2,200 in London versus Leeds, it’s very differently. I do get that. But nationally, that’s the benchmark. Now, here is another one for you. If you’ve got any money saved at all, I’m talking at all, then you’re beating a huge chunk of the UK population. Because a quarter of UK adults have less than £100 in savings.

[02:22] Sammie: One in six have nothing at all. And nearly half of people under 44 have less than a grand put away. So if you’ve already got a few hundred quid tucked away somewhere, you’re ahead of millions of people in the UK. And that’s not just me being motivational, that’s real data right here. Now, quick caveat, yes, there are some people that are generally richer. Old money, inheritance, dual income households without kids, trust funds, that’s real. I’m not pretending everyone’s faking it out here, but most of the rich looking people that you scroll past every day on social media, they are not wealthy. They are just spending their money. But here’s the thing, right? Even knowing all of this, even knowing all of the stats, it doesn’t actually stop us feeling like we’re behind. And there is an actual reason for that.

[03:10] Sammie: It’s not random. It’s not just you being negative. There’s actual psychology behind it. So let me explain the psychology bridge. So there’s something called social comparison theory. Basically, we don’t judge how we’re doing in isolation. We judge ourselves against the other people that are around us. The people that we’re comparing ourselves to aren’t a fair sample. That’s the problem. Think about it. On social media, you’re seeing highlight reels, the promotion posts, the holiday photos, the new car. Nobody’s posting their overdraft or the credit card statement, which possibly got them there in the first place. So you’re comparing your full picture, the stress, the bills, the uncertainty, to everyone else’s best moments online. And of course you feel behind if that’s the case, because the comparison is rigged.

[03:58] Sammie: There’s another thing too, it’s called lifestyle creep. As people earn more, they spend more. So even people earning double what you earn often have the same amount saved. They just have nicer stuff and bigger commitments and more costs coming out of the bank every single month. And then there’s the algorithms, right? Social media literally shows you people who look more successful for than you do in real life, right? That’s how they keep you scrolling. It’s not a conspiracy here. It’s just how the feed works. You’re being shown a curated gallery of people doing better than you on purpose. You know, the hot girls, the nice cars, the hot men, the fancy trainers, all of these things are shown to you on purpose. So when you feel like you are behind, that’s not a character flaw here.

[04:45] Sammie: That’s a system working exactly as it’s been designed. And let’s be clear about who benefits from this. The car dealership offering you 0% finance, that isn’t really 0%. They benefit. The bank giving you a credit card with a 10 grand limit on it that you never asked for, well, they benefit because probably you end up spending it all. And the algorithm showing you people’s lives that they can’t afford, well, it benefits from showing you ads of the things that you then go and buy, which then puts you back into debt to fund a lifestyle which you didn’t even want in the first place. Every time you feel behind, someone makes money. Every time you try and keep up, someone profits. This isn’t a conspiracy, it’s just business, and you are the product. So the question is, what do you do about it? And that brings me to a concept that I want to share with you.

[05:33] Sammie: Something that completely changed how I think about money, work, and actually getting ahead and what that actually means. So part number two is renting your income. Now here’s something no one tells you, right? Most of us don’t own our income. We rent it. What do I mean by that? Well, if you’re employed, which most of us are, you trade your time for money. If you stop showing up, well, the money stops. Your income is controlled by someone else. Your boss, the economy, AI now, restructures. You’re basically a subscription service. And your employer can cancel that subscription anytime they want. And we’re taught that a stable job equals security. But your one redundancy, one bad quarter from that business, one new manager that you don’t like away from zero.

[06:21] Sammie: The average person will have 12 or more jobs in their lifetime. That is not security. That’s renting stability from a series of different landlords. Now, why does that even matter? And it matters more than ever right now because jobs are less stable. AI is changing absolutely everything. Pensions are weaker than what our parents had, and cost of living is absolutely brutal. Our generation can’t rely on the same playbook. The rules have changed. And here’s what makes it even worse. Most people fall into that same pattern. They earn more, they spend more, they need to then earn more to pay for the things that they’ve then signed up for, and they get a raise and they upgrade the car, you get a nicer flat, you go on a better holiday, and suddenly you need that higher salary just to maintain where you are. Most people earn three times what they earned 10 years ago, but have the same amount saved.

[07:09] Sammie: They’re running faster on a treadmill that someone else controls the speed of. So the question becomes: how do you get off that treadmill? How do you stop renting your income and actually start owning it? Well, let me show you what that looks like in practice. I want you to introduce you to two guys, and they are called Simon and Mark. Both are 28, both are doing all right in life, they’re earning 50 grand a year. So that’s around about 3,300 pounds a month take home. Both rent flats for £1,100, and neither has any savings. So they’re starting at the same point, identical on paper here, but they make different choices. And in 10 years, one ends up with over 85 grand and the other has about five grand. Now let me show you how. So this is Mark’s path. Mark gets a bonus from work, three grand. Now he’s been grinding, he’s tired, and he wants something to show for it.

[07:59] Sammie: So he puts down on a brand new BMW. PCP deal, 350 pounds a month. And look, I get it. He’s worked hard. That car feels like progress. It feels like he’s made it. That’s not stupid, that’s just human, right? So Mark’s 3,300 pounds a month could look something like this. His rent is £1,100 car, £350. You know, we go through all of his costs, and that total is around about £2,900 for him. He’s paying for holiday subscriptions, socializing, going out, bills, etc. And that leaves him with around about £400 spare. But with that £400 spare, there’s always something that he’s forgotten about. A birthday, a repair on the car, a night out that, you know, got out of hand, for example. We’ve all done it, right? I’ve done it countless amounts of times. But realistically, he’s saving potentially maybe £100 a month and some months absolutely nothing.

[08:49] Sammie: After 10 years, he’s got about five grand in the bank. But he spent £42,000 on car finance and he owns nothing. Now let’s have a look at Simon’s path. Simon gets that same bonus, that same £3,000, but he does something completely different with it. He opens a stocks and shares ISA and he puts the whole thing in. He keeps his Honda Civic, that’s paid off, and it costs him about £100 a month to run. Now Simon getting that same wage packet, has all of the same relative costs in there, but he is much less on things like going out on holidays, and his total ends up being £2,100, leaving him with around £1,200 in contingency to spend on things that he wants to spend on.

[09:35] Sammie: But what he does is he sets up an auto investment. £500 a month goes into a global index fund. The rest builds up a little bit of a cash buffer, and you know, he can do things with that money too. Now Simon’s life looks pretty boring from the outside in. No one’s asking about his car that he’s driving. Oh, well done, Simon. On Instagram, he’s basically invisible, right? But after 10 years, assuming average market returns of 7%, his ISA is now worth about £70,000. Plus, he’s got a cash buffer of around about 15,000 stashed away as an emergency fund. So that’s 85 grand from the same salary, same decade. So what is the difference here? Because it’s not intelligence, it’s not luck. It’s something much simpler. And here’s what I want you to take away from this.

[10:21] Sammie: Mark is not an idiot. He’s doing what most people do, what the ads tell us to do, what society tells us to do, and what feels like progress. And Simon is not a genius. He made one decision: pay yourself first and stick to it. The difference isn’t discipline. It’s not willpower, it’s just automation and one thought process. Simon sets that direct debit up on payday and forgot about it. He never saw that £500. It was a tax to future him. So he’s never missed it, right? He’s just planned his life based around that happening. And Mark sees his whole salary, and there’s always a reason for him to spend all of it. Now, could things change along the way? Of course they could. Raises, house deposits, life, kids, all of these things can happen, of course.

[11:07] Sammie: But here’s the thing, right? Mark’s mindset, lifestyle first, save what’s left, those raises just get absorbed. Nicer flat, nicer car, nicer holidays, and he stays in the same place financially. With Simon’s mindset, that pay yourself first, he’s living below his means. That raise accelerates things for him. That gap gets bigger. Mark 5,000, Simon 85,000. Same starting point, same salary, different mindset. Now, fast forward at 55. If this was to continue, we’re looking at this. Mark’s still renting, rent’s gone up every year. He’s now paying, you know, 1,800 pounds a month for the same flat. He’s had three more PCPs. He’s spent over £100,000 on cars he’s never owned. His kids need help with unis, got nothing to give them.

[11:53] Sammie: Retirement, he’s looking at state pension, whatever’s in his workplace pot, which he’s managed to build up, maybe a couple hundred thousand pounds if he’s lucky. That’s 16 grand a year potentially if he’s actually withdrawing that. That’s it, right? And Simon, he’s bought a flat at 38. It’s now nearly paid off. His ISA is compounding. He can retire at 57 if he wants to. Same starting point, same salary, one’s trap, one’s free. That’s not a scare story. That’s just mass. Now, this PCP thing, it comes up all the time, right? So a quick note on finance cars because I don’t want people thinking that I’m saying that PCP is evil. It’s not. If you need a reliable transport and can’t drop 10 grand on a used car, well, PCP can make sense. Lower payments, newer car, warranty included, I understand all of that.

[12:39] Sammie: But the problem isn’t PCP. The problem is using PCP to buy a car that you can’t afford to impress people you don’t know with money you don’t have. £150 Kia to get to work, that’s a tool. But a 400 pound BMW that’s eating up a large portion of your budget, well, that’s a trap. And here’s the line I want you to remember. If you have to finance a lifestyle, you can’t afford it. That’s it. That’s the whole thing. If you need credit to look successful, you are not successful, you are performing on a stage. So here’s the question that I want you to sit with. And if you’re watching this on your lunch break in a job and you’re not sure about wondering if you’re going to ever get ahead, well, this is for you. You see, Mark and Simon at a party, Mark’s got the nicer car outside, better clothes, flashier holiday photos.

[13:29] Sammie: Who looks richer to you? That’s the illusion. That’s what we’re all comparing ourselves to. That 80,000 pound difference, same decade, same salary. What path are you going to go on? Now, knowing which path you are on is one thing, but how do you actually change direction? And that’s what I want to talk about next. Now, part number four here is the ownership spectrum. I think about this as a spectrum, right? Five levels, from fully renting your life to fully owning it. Now, level number one is full renter, job dependent, no buffer. One paycheck from disaster. If you lost your job tomorrow, you’d be bang in trouble within weeks. Level number two is building a buffer. You’ve got some savings, maybe a few months of expenses there, but you’re still 100% dependent on your job for income.

[14:19] Sammie: And level number three, this is asset builder. This is where you’ve got investments growing. They’re not paying your bills yet, but they’re generating small returns. Compound interest is starting to work for you. Then you’ve got level four, that’s the partial owner. Your passive income, dividends, interest, and rental income, if you have one, for example, is now covering some of your bills. Your phone, your subscriptions, maybe your groceries. You’re starting to potentially, if you were to, supplement a piece of your life with the income that your assets are generating. And level number five is a life owner. This is where work is optional. Your assets cover your lifestyle, and you work because you want to, not because you have to. Now, level one and level two, if you are there right now, you are not behind, you are normal.

[15:05] Sammie: Most people were here. The system is designed to keep you renting, and so it keeps you in level number one and then level number two. But here is the good news, right? Moving from level one to level two is the hardest jump. After that, momentum kicks in. Every pound that you save isn’t just savings, it’s buying back a piece of your life. 10,000 pounds invested could generate roughly but around about 500 to 700 pounds a year forever if you’ve got average market returns. Not saying that that’s always going to happen. We take an average over a long period of time, but that’s what we have to go off, right? But that’s not just money, that’s ownership right there. You own an asset which is producing income.

[15:51] Sammie: That’s potential freedom in the future. So, how do you actually start moving up? Well, let me give you the practical steps that you can take away and start implementing in your life. So here’s six steps to start moving from renter to owner. Step number one is get your head right. Chat to any self-made millionaire. I’m talking self-made, not the trust fund babies, the self-made millionaire. What they’ll tell you is they work their absolute socks off. Most millionaires in the UK don’t hit that milestone until they’re 52, not their 20s or 30s. The Lambo Life Dubai guys on social media, well, they’re selling you a lie. Building wealth takes decades and not weeks. So focus on what you have control on. Not the news, not Instagram, your own individual actions.

[16:40] Sammie: And step number two is know your numbers. And what do you actually spend each month? Most of us have got absolutely no idea. And if we do, maybe we checked it three months ago, but guess what? It’s changed this month. So if you lined up a thousand people and you gave them £40,000 to budget, not one budget would be the same. Personal finance is personal. Your £50 save might mean everything to you, and that is valid. But you need to know where you’re starting from. You have to know your numbers. Step number three is you can build the buffer. So what we’re looking to do here is at least three months of living expenses in cash. That’s your freedom fund, your FU fund. It’s not just an emergency fund, it’s what lets you say no. It’s the difference between I have to stay in this job or I choose to stay in this job.

[17:29] Sammie: And it’s the difference between someone’s driven into my car and driven off and the insurance aren’t going to pay out, I can just bat that off without thinking about it. Step number four is leveling up your circles, right? You are the sum of the five people you spend the most time with. Now, this is a cliche saying, but it’s so true. If your circle circles around you are stagnant, they’re gonna hold you back. It’s not on purpose. They’re not bad people, but their normal will become your normal. So you need to find people that are one level above you. You’re not looking at the Elon Musks of this world, one level above you. They want to help because they remember what it was like to be on the previous step. So step number five is you’ve got to start buying assets. And it doesn’t have to be a house at this point because index funds, ETFs, even premium bonds, I even though I, you know, have my own gripes with them, something that’s actually working for you while you sleep, the opportunity in there.

[18:29] Sammie: Investing 10% of your income increases your income over time. That’s the formula. It’s not sexy, but it works. And step number six is protect what you build. Do not inflate your lifestyle with every single raise that you get, every good opportunity that comes your way if you fall into some money. Do not inflate your lifestyle. That’s the trap that Mark fell into. Automate your wealth building. Pay yourself first. Not your Amazon or your subscriptions or your bills. Pay yourself first. Still pay your bills later. Make a plan for them. Know your numbers, but pay yourself first. Set that up. Now here’s five things that you can do this week, or perhaps, you know, even today, even. Number one is check your subscriptions.

[19:16] Sammie: Cancel the ones that you forgot about. There’s always at least one. Two, you can set up a 50-pound auto transfer to your savings pots or your investments pots before you see it, before you even spend it. And number three is unfollow or mute five accounts that make you feel behind. Curate your surroundings. Create what you compare yourself to. And number four is try the 24-hour rule. So if you want something and it’s above 50 pounds, wait a day. If you still want it and you can afford it three times over in cash, buy it. Most of the time you are not going to want it. Dopamine will is driving that purchase. And number five is have one no spend day a week. Just one. See how it feels. Make some stuff at home. Clear out the ingredients from your cupboard.

[20:04] Sammie: This is small stuff, but it really does start adding up. And it’s about shifting the mindset and how you think about money. Now, the actual things that are worth something in life are usually free. Time with the people you love, peace of mind, waking up without dread. But deep but being debt-free isn’t just a number on a spreadsheet. It’s sleeping better. It’s not dreading Monday when you go to work. It’s maybe working four days instead of five. It’s saying no to things that drain you. Building wealth takes decades, not weeks or months that social media will tell you. And you are not behind, but you might be renting. And the question is, how long do you want to keep paying someone else’s mortgage for your own life?

[20:52] Sammie: Start with this one thing this week. Do these things which I’ve said. Check your spending, open an investing account, set up a 50-pound auto transfer in. You can keep renting your income, or you can start buying it back one single pound at a time. And if you want to dive a little bit more into renting your income, then this podcast next, also in the description, is available to you right now. Definitely tune into that. It’s called Most of Us Rent Our Income. And here’s why that matters. Catch you next week. It’s been a pleasure. I love you guys. Peace.