What if employers paid their workers the highest salaries they possibly could?

According to psychologist and best-selling author Adam Grant, it’s in an employer’s best interest to pay their employees as much as possible — in the form of a high starting salary and raises.

Higher paychecks give workers an increased incentive to stay at the company, leading to better retention rates, lower turnover costs, and a more stable workforce in the long term, he says. Grant frames higher salaries as an “investment” for companies.

“Giving people a raise, and in particular, paying them well—some would even say paying them extremely generously—is an investment in motivation and retention,” Grant told Fortune.

Related: Looking for a Remote Job? A New Survey Says It Could Be Harder to Find Than You Think.

Gallup estimates that replacing an employee can cost a company up to two times the worker’s annual salary — much more than the median 3.8% annual raise in 2024, according to data from nonprofit think tank The Conference Board. Still, job hopping may not yield a significantly higher salary, anyway. According to federal wage data released this week, people who stayed in their jobs saw their salaries rise by 4.6% in January and February while switchers experienced a slightly higher increase of 4.8%.

^{Adam Grant. Photo by Brian Stukes/Getty Images}

“When organizations pay on the top end of the market range, they end up with unusual loyalty, because people know that they can’t easily replicate the salary that they’re getting elsewhere,” Grant added.

Employees with higher salaries are also more motivated and engaged, per compensation site Figures HR. According to Gallup, higher employee engagement means 78% less absenteeism, 18% more productivity, and 23% more profitability.

Meanwhile, a new Harris Poll survey for Bloomberg News released last week found that three in four workers think employers have the upper hand in the job market. The hiring rate for all workers was 3.4% in January, a low point in the past decade, while job postings were down 8.6% in December compared to the same time last year.

Related: ‘No One Is Paying What They Used to’: Job Hopping Isn’t As Lucrative As It Used to Be, According to New Data

Since 2009, I’ve been writing about the importance of working to live—accumulating wealth to achieve financial independence and freedom ASAP. But despite years of advocating for this lifestyle, I’ve come to realize that convincing people remains an uphill battle. Instead, I now have proof that live-to-work is back and stronger than ever!

“Live to work” describes a mindset where a person’s life revolves primarily around their career or job. People who “live to work” often prioritize their work above personal interests, relationships, or leisure. Their identity and self-worth may be closely tied to their professional achievements and productivity.

I understand the importance of “living to work” when you first graduate from school. Building a career and establishing financial security often require dedication and long hours. However, there comes a point when we need to decide what truly matters and when enough is enough. Otherwise, we risk looking back with regret, wishing we had the courage to prioritize our happiness and live life on our own terms.

My Start Of Wanting To Work To Live

A couple of years before retiring from finance in 2012, my wife and I were rushing through Venice, Italy when an older couple stopped us and said, “Take it slow and look around. There’s no hurry to get to where you’re going.” At first, I was surprised, but then I realized they were right. We were speed-walking through the city like New Yorkers in Midtown Manhattan.

When I finally built up the courage to negotiate a severance and leave my job, I spent late mornings sitting in Golden Gate Park, reading a book or simply enjoying the moment. It was a wonderful feeling—not having to endure rush-hour traffic just to sit in meetings all day. Even though I earned 85% less in my first year of retirement, I was happier because I was free.

At last, I could finally enjoy the public parks and services my six-figure tax bills had been paying for over the past decade. It felt good to break free from the live-to-work mentality—the relentless pursuit of more money and greater status. In retrospect, it was weird to let go at 34, but I don’t regret it at 47 today.

Work-to-Live (FIRE) Is Getting Pushed Aside Again

I shouldn’t be too surprised that the work-to-live philosophy is fading again. After all, I wrote the post Why Early Retirement/FIRE Is Becoming Obsolete, which argued that increased workplace flexibility had reduced the urgency to retire early. If I only had to go into the office 2-3 days a week, I likely would have worked at least five years longer.

Just last week, I played pickleball from 2 – 3:45 PM with someone who works at Uber. He told me his company only requires employees to be in the office on Tuesdays and Thursdays, giving him a four-day weekend. This season, he’s been skiing in Lake Tahoe almost every week. On Fridays and Mondays, he takes video meetings until about 11 AM, gets in six runs on the slopes from 11:30 AM to 1 PM, and then logs back in for work.

Spending time on the pickleball and tennis courts led me to believe that more people were embracing flexible work. However, meeting a few individuals with relaxed schedules is one thing—seeing how people spend their money is another. And from what I’ve observed, the most serious professionals—the ones living to work—are actually doubling down on work post pandemic.

The reality is that most of my midday pickleball partners fall into two groups: people in their 20s and those over 50. The younger crowd are all renters without kids, while the older group either runs their own businesses, has a working spouse, or lives frugally on government assistance.

Proof That Live-to-Work Is Back And Stronger Than Ever

One of the best things to come out of the pandemic was widespread remote work. Beyond eliminating commutes and unnecessary face time, it also allowed people to save on housing costs by moving farther from city centers. This trend is one of the reasons why I’ve been investing in heartland real estate since 2016.

In San Francisco, you can save 40%–60% on rent or home prices just by moving 3–5 miles west. During the pandemic, thousands relocated to entirely different cities to cut costs. Personally, I advocate for less drastic measures—relocating within your city to reduce expenses while keeping the same salary, professional network, and school district for your kids.

But what shocked me recently was seeing two homes with no views sell for well above asking prices on San Francisco’s growing west side. They sold for more than the homes available with ocean views. I had toured both properties extensively and estimated their final selling prices. I do this for every property I visit to keep my pricing forecast skills sharp.

For context, I’m bullish on San Francisco real estate, particularly due to the growth of artificial intelligence. I’m especially optimistic about the city’s west side, driven by new schools, property developments, and the $4 billion UCSF Parnassus medical center remodel, which will add over 1,400 new jobs.

I think these two homes are great—I’m just surprised they sold for so much more than my estimates, when you can buy nicer homes with views just 0.5 – 1 miles away, for less.

Example #1: XX Madrone Avenue, San Francisco, CA

This fully remodeled 3-bedroom, 3.5-bathroom, 2,836-square-foot home in the West Portal neighborhood sold for $3,125,000 in April 2024. Given my positive stance on west-side San Francisco real estate, I projected a 4% appreciation in 2025, bringing its estimated value to $3,250,000.

It was re-listed in 2025 at $2,495,000 to generate interest—similar to its 2024 strategy when it was listed at the same price and ultimately sold for $3,125,000. However, I doubted it would go $750,000 over asking again. That is a scary amount of money and percentage to overbid.

I was wrong. The home sold for $3,435,000—10% higher than its 2024 price, and $393,799 over Redfin’s estimate.

Why I Had My Doubts It Would Seel For So Much

The home’s biggest selling point, according to real estate agents, was its proximity to the MUNI station. A five-minute walk to the train, an eight-minute wait, a 15-minute ride, and you’re in downtown San Francisco.

But I debated this logic with my real estate agent. “Why would someone pay a huge premium for a home just to have a short commute to work under fluorescent lights for 8-10 hours a day? Sounds like torture. By paying that housing premium, they’re locking themselves into working even harder to afford it.”

Her response? “What if they have to go into the office?” Good point. That ended the debate because it reminded me that I’m in this FIRE bubble where I refuse to work longer than I have to. Only a minority of people are personal finance enthusiasts, whereas the vast majority of readers of Financial Samurai are.

Example #2: XXX Forest Side Avenue, San Francisco, CA

A single example isn’t enough to declare a trend for the new year, but then I came across another. This 3-bedroom, 3-bathroom home, 2,230 sqft (600 square feet smaller than the first), was somewhat move-in ready, though its remodel was 25–30 years old. So it didn’t feel nearly as luxurious as the first home. In fact, I would want to spend $100,000 – $200,000 remodeling it.

It was also listed at $2,495,000, and I estimated it would sell for about $2.8 million. Again, I was wrong. It sold for $3,039,159—over $359,000 above Redfin’s estimate, or $1,362/sqft. Never would I have guessed the home would get over $3 million.

Why the premium? A slight skyline view from the main bedroom and a seven-minute walk to the MUNI station instead of five. In a previous post, I mentioned that owning a home within walking distance of everything isn’t always ideal due to noise and other disturbances. Being one block farther from the MUNI station, shops, and restaurants may have made this home slightly more desirable to buyers.

Once again, real estate agents confirmed that all the buyers were families prioritizing proximity to public transportation. Live-to-work strikes again! You could buy a 300 sqft larger, fully remodeled home with ocean views for 10% less.

Clearly, my advice for people to find more affordable homes a bit farther from work seems to be failing. And don’t worry, I have plenty more examples besides these two that show how working to live is back.

The Live-to-Work Cycle Will Drive Home Prices Higher

I’m not saying these homebuyers are obsessed with work—many simply need to be in the office daily. Their locations are convenient—close to downtown, near transit hubs, and within walking distance of shops and restaurants. Again, these are great homes in a nice neighborhood.

But the reality is that the need to work fuels demand for homes near offices and public transportation, driving prices higher. And as home prices climb, more people find themselves working more just to afford them. Remember, higher home prices means more maintenance, insurance, and property taxes to pay for.

This cycle won’t break anytime soon, despite the personal finance community’s best efforts to encourage more affordable living arrangements. There’s simply too much pressure to earn more and grow social status.

Maybe High Income Households Struggle On Purpose

There are also people who willingly endure a 45-minute commute each way to drop off their kids at school—for the next 8 to 12 years—simply because they refuse to give up the status of their current neighborhood. Instead of moving closer and cutting the drive down to under 10 minutes, they stay put because they don’t think the new area is “fancy” enough. 

Financial independence is about creating options, yet we’re seeing a shift back toward working harder just to sustain an expensive lifestyle. On top of paying a premium to live closer to work, many families in big cities want to send their kids to private school, which can easily cost between $20,000 and $70,000 per year per child. Add on a car or two, vacations, fine dining, and supplemental lessons for their kids, and even households making $500,000+ a year are just scraping by.

Such households aren’t being irrational—they’re choosing to pay because they believe the benefits are worth it. In other words, there’s no need to feel sorry for them because they can change their situation if they choose. With the help of ProjectionLab, we conducted a case study showing how a $500,000/year household went from struggling to being able to retire early.

How Many More Years Will You Have to Work To Pay For A More Expensive Home?

If you have a million-dollar mindset, saving $1 million on a home equates to ~$42,000 per year in risk-free income—or potentially $100,000 per year if invested at a 10% return. Personally, I’d much rather save $1 million and live half a mile farther away on the MUNI line with a slightly longer commute than be forced to work many more years just to afford my home.

Let’s run the numbers. Say you have a $600,000 household income—the minimum I’d recommend for comfortably affording a $3 million home (5X income, though ideally, it should be 3X). But instead of opting for a $2 million home just one mile farther, you buy the more expensive one because it feels more prestigious and convenient.

Now, let’s assume you’re a disciplined saver, putting away 10% of your gross income, or $60,000 a year. That’s about 14% of your after-tax income of $420,000 (assuming a 30% effective tax rate). With a 5% compound annual return, it will take you 12 years to save $1 million. Holy moly!

Are you telling me you’d rather work 12 more years just to live slightly closer to work, rather than buy a similar home a bit farther away for less and not have to work for 12 extra years? That’s a trade-off I wouldn’t make.

A More Aggressive Saver Can Sacrifice Less Time

OK, fine. Maybe a 10% gross savings rate is too low for a $600,000 household income earner. Let’s say you’re an exceptional saver, setting aside $180,000 a year (30% of gross, 43% of net income). You are reading Financial Samurai, after all.

Even then, choosing the $3 million home over the $2 million option means working five extra years—assuming a 5% annual return. And if you’re middle-aged, those five years are way more costly than in your 20s. Again, my answer is a hard no!

If you’re focused on the absolute dollar value of homes, try shifting your perspective. Think in percentages instead. Paying 50% more for a slightly shorter commute may not be worth it.

I have written in the past about how a big expensive home can derail your path to financial freedom. However, I don’t think many people really care until it’s too late. Do the math please.

The Live-to-Work Mindset Perpetuates Itself

While some maximize work flexibility, others are paying top dollar to ensure they can keep working. Ironically, this live-to-work cycle benefits those who participate in it, as continued demand drives home prices even higher. If you buy into this mindset, the best thing you can do is encourage others to do the same—because that will increase the odds of selling your home for a big profit down the road.

But if you’re still in the wealth accumulation phase or are miserable, take a step back and ask yourself: Are you working to live, or living to work? Because if you’re not careful, lifestyle inflation might trap you in the latter—without you even realizing it.

Readers, why do we choose unenjoyable work over experiencing freedom sooner? Do people not run the numbers and realize how the pursuit of a fancy home and status keeps them trapped in a work cycle for far longer than necessary? Do you think the live-to-work mentality is back? How can we encourage people to stop following the herd and consider alternative lifestyles?

For new readers: I lived to work for 13 years in investment banking. I bought the nice house in a fancy neighborhood, which only pressured me to work harder to afford my bills. Eventually, I decided to downsize to a smaller, more affordable home because I wanted to live more. Although I lost prestige, status, and money, I gained something far more valuable—freedom.

Let Professionals Invest In Real Estate For You

Invest in real estate without the burden of a mortgage, tenants, or maintenance with Fundrise. With almost $3 billion in assets under management and 350,000+ investors, Fundrise specializes in residential and industrial real estate. During times of turmoil, real estate tends to outperform. 

If you don’t want to live to work forever, you must save aggressively and invest wisely. Real estate is my favorite asset class for building wealth because of its utility, income potential, and relative stability. The powerful combination of rental income and property appreciation makes it one of the best ways for the average person to grow wealth over time.

I’ve personally invested $300,000 with Fundrise to generate more passive income. The investment minimum is only $10, so it’s easy for anybody to dollar-cost average in and build exposure. Fundrise is a long-time sponsor of FS.

Change Your Life For The Better

If you want to build more wealth than 93% of Americans, order a copy of my new book, Millionaire Milestones: Simple Steps to Seven Figures. With over 30 years of finance experience, I’ll help you achieve financial freedom sooner, so you can break free and do more of what you truly want!

Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.

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If you want to save money on taxes, you’re probably already familiar with popular tax-advantaged accounts like 401(k)s, IRAs and health savings accounts (HSAs). However, if you’re also investing in taxable brokerage accounts, you need to know how to navigate taxes related to capital gains.

Capital gains taxes are levied on the sales of assets, which might include items like art, jewelry, real estate, digital products or stocks. Short-term capital gains, incurred by assets held for less than a year, are taxed as ordinary income based on your tax bracket; long-term capital gains are taxed at 0%, 15% or 20%, in line with graduated income thresholds.

A strategy known as tax loss harvesting, or using losses to offset capital gains taxes on investments sold for a profit, can help mitigate those costs — but it’s not always simple.

Related: Innovative Strategy for Diversifying Concentrated Positions Without Heavy Tax Burden

That was a problem that Mo Al Adham, the first advisor at Instacart and founder of Twitter-connected social video network Twitvid, wanted to solve. Tax loss harvesting can be “extremely hard” to do yourself, with frustrating spreadsheets and mistakes par for the course, Al Adham tells Entrepreneur.

So, in 2021, Al Adham founded Frec, a fintech company offering automated, self-service investment products that “simplify sophisticated tax strategies traditionally available through wealth managers.” The company, which is backed by Greylock and counts industry leaders from Google and Meta among its angel investors, launched its initial product in 2023.

Frec offers an alternative, algorithm-driven product that puts money into what it refers to as a “direct index,” essentially “decomposing” an ETF into its individual stocks to prepare for tax loss harvesting, Al Adham says.

“We break it up into individual stocks, and we buy those stocks for the customers,” Al Adham explains. “Then we can generate tax losses by trading these stocks. You’re still getting the same performance as the ETF, essentially, with a tiny tracking error. But you’re getting these capital losses, and these capital losses you can use [to save on taxes].”

Related: Have You Made These Year-End Tax Moves? Here’s How to Keep More of Your Money

Frec’s product requires a minimum investment of $20,000 — the necessary amount to buy “tiny pieces of each stock,” Al Adham notes — but the average portfolio Frec manages is about $200,000. It’s also bundled its direct index product with other complementary offerings, like the ability to borrow against your stock portfolio.

“Let’s say you have been saving up in the format of stocks, you’ve been buying indices and now is the right time to renovate your bathroom,” Al Adham says. “Instead of selling your stocks to renovate your bathroom, [you could] take a loan against [your] stock to do that, and this is another tax deferral strategy because you’re basically delaying selling your stocks to later when they’ve appreciated even more. And there’s no taxes on taking a loan out to renovate your bathroom.”

Al Adham also highlights that capital losses never expire in your lifetime, which means you can carry them forward to save in the future.

Al Adham uses the example of someone who invests $100,000 in a direct index and realizes $15,000 in losses. The next year, that person sees $15,000 in capital gains, and the previous loss offsets the new gains. However, even if that person doesn’t sell assets for a profit the following year, they can still leverage the losses to save on income taxes — up to $3,000. In other words, someone earning $150,000 a year will pay taxes on $147,000.

Related: Capital Gains Tax on Real Estate: Here’s What You Need To Know

That $3,000 figure is at the root of a “very big misconception” when it comes to tax loss harvesting, Al Adham says. Many people think that the savings strategy caps at $3,000 — and therefore isn’t worth the effort — but it doesn’t: You could offset $1 million in capital gains with $1 million in capital losses, Al Adham notes.

“There are no limits there,” Al Adham explains. “The only limit applies if you don’t have cap gains to offset and you have cap losses, and then the government lets you take $3,000 of your cap losses to offset ordinary income gains.”