If you’ve ever looked at your monthly bills and thought, “We make good money… so why does it still feel so tight?”—this episode puts language and math to that feeling.
In this Wealth Mavericks conversation, Erin and Bob unpack a simple but mind-bending concept: your bills don’t just cost what you pay on paper. If you’re a high-income W-2 earner, your bills actually cost more because you’re paying them with after-tax dollars. And when you start viewing your spending through the lens of your tax rate, you see why “high income” doesn’t automatically translate into “high wealth.”
The “Real Cost” of a Bill
Bob starts with an example that stops most people in their tracks:
If your mortgage payment is $5,000 per month and you’re paying roughly 37% in taxes, you don’t need to earn $5,000 to cover that bill—you need to earn closer to $8,000.
Why? Because taxes take their cut first. What’s left is what actually hits your checking account. So a $5,000 bill isn’t just $5,000—it’s $5,000 plus the income you had to earn to net that $5,000.
Once you see that, you can’t unsee it.
And the point isn’t just the mortgage. It’s everything:
- groceries
- eating out
- car payments
- insurance
- kids’ activities
- subscriptions
- utilities
If your tax rate is high, you’re effectively paying a premium on every lifestyle expense because you’re funding it with dollars that have already been reduced by the IRS.
Why High Earners Need a Business-Owner Lens
Bob ties this back to a core Terra Firma philosophy: to reduce taxes, you have to think like the system is designed.
He explains that the tax code is written to favor a business-owner mentality, because the government itself operates like a business. In a business model, you have:
- Revenue
- Expenses (cost of doing business)
- Profit/Loss
Most W-2 earners live the opposite way:
- income comes in
- taxes are withheld immediately
- what’s left covers living expenses
- whatever remains is “discretionary”
That structure makes taxes feel like an unavoidable fact of life. But when you start thinking like a business owner, the question becomes: How do I structure my life so more of what I do qualifies as purposeful, strategic, and tax-efficient?
The Hidden “Termites” Eating Your Wealth
Bob also zooms out and connects this to what he calls the forces that slowly erode wealth over time:
- taxes
- inflation
- time
- laws and regulations
Even if you don’t change your lifestyle, these forces keep working in the background. And when your spending grows along with your income, you may be unknowingly accelerating the damage.
The Cash Flow Map: Clarity Without Judgment
A big takeaway from the episode is that Terra Firma isn’t trying to tell doctors “don’t spend money.” The focus is clarity.
The cash flow map is designed to help you identify:
- where your money is going
- which dollars are truly “discretionary”
- which dollars are sitting idle (“dormant dollars”)
- and how your spending choices affect your ability to build assets
Bob uses a memorable analogy: dormant dollars are like money “sitting on the couch eating potato chips.” The goal is to get those dollars back to work—because you worked hard to earn them.
Two Real Examples of “Changing the Math”
Bob shares two patterns they see with members:
1) Reframing spending to make it more meaningful (not eliminating it).
For example, instead of eating out 3–4 times per week with a family of five, some members make dining out a deliberate tradition—date night every other week, a fun family dinner once a month. They still enjoy life, but they stop bleeding cash without intention. Over a year, even a few hundred dollars per month redirected can become thousands—either invested, used for tax strategy, or turned into family experiences that actually create long-term value.
2) Increasing income strategically (without burning out).
Some physicians don’t overspend—but they want to accelerate wealth building. In those cases, a couple extra shifts per month (not per week) can produce meaningful surplus that gets deployed into assets with purpose, rather than absorbed into lifestyle.
And Erin highlights an important nuance: some listeners won’t want to cut back or work more—and that’s okay. The win is getting a plan for where the extra dollars go so they don’t disappear unnoticed.
From Cash Flow to Assets: What Happens Next
This conversation naturally leads into the next stage: the asset map.
Bob describes how many high earners end up with large amounts sitting in cash—$300K, $500K, more—knowing it’s not productive, but not knowing what to do. Often, they default to what’s familiar (like dumping it into the market) out of pressure or desperation, even if they’re risk-averse.
The problem is they’ve already paid heavy taxes on those dollars—and now they’re taking risk with the remainder without a unified strategy.
The cash flow map identifies the dollars. The asset map decides where those dollars should go to support the goals and reduce taxes—so the plan becomes cohesive, not reactive.
The Bottom Line
Once you understand the “real cost” of your bills, you start asking better questions:
- What is this expense actually costing me after taxes?
- Is this spending aligned with what I want long term?
- Where are my dormant dollars?
- What would happen if I redirected even a small percentage into productive assets?
- How do I shift from living like an individual taxpayer to operating like the “business of me”?
That mindset shift is what turns high income into actual wealth.
Watch the full episode here: https://youtu.be/YquQ9N4aDvU?si=qLrBKn9kWq2_DSnY