Where is Littlefinger spending all the money he is embezzling, that his lands are a pile rocks with one guard, 23 sheep, and seaweed for breakfast? He can’t afford, i don’t know, a better house, or maybe some more sheep? Actual food?

I’d recommend reading “Who Stole Westeros?” to find out more of my thoughts on this, but…

The short version is that Littlefinger is using his money to buy ships, urban real estate, lending money at interest, speculating in commodities markets, and acting as your classic putting-out merchant type with an eye to vertical integration.

If you’re asking why he doesn’t have more land (other than the lands of Harrenhal, which are quite extensive if slightly cursed), it’s that Westeros doesn’t have a free market in land, wherein land becomes a fungible commodity that can be bought and sold at will and abstracted into derivatives and futures, etc. 

Land in Westeros is distributed through feudal relationships that are traditional and customary in nature – fiefdoms are hereditary, taxation and rent levels are fixed, and tenancies are more likely to involve feudal obligations than pure cash rents.