Episode 436: How To Climb The Wealth Ladder & Build Wealth at Every Stage of Life With Nick Maggiulli

Nick Maggiuli 0:02

I think in every iteration of the universe, Warren Buffett is a multi multi millionaire. I'm not debating that. I'm not saying he's lucky, but to get to that level of, you know, the multi multi billions, I think there's always some luck involved. Right one wrong move somewhere 50 years ago, and maybe he only ends up with $200 million and he's still famous, but not as

Jamila Souffrant 0:21

famous. Welcome to the journey. To launch podcast with your host Jamila Souffrant as a money expert who walks her talk she helps brave journeyers like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom in 54321, 4321,

Jamila Souffrant 0:47

if you want the episode show notes for this episode, go to journey to launch.com or click the description of wherever you're listening to this episode in the show notes, you'll get the transcribed version of the Conversation, the links that we mentioned, and so much more. Also, whether you are an OG journey or brand new to the podcast, I've created a free jumpstart guide to help you on your financial freedom journey. It includes the top episodes to listen to, stages to go through to reach financial freedom resources and so much more. You can go to journey to launch.com/jump start to get your guide right now. Okay, let's hop into the episode. Hey, hey, hey, journeyers, welcome to the journey to launch Podcast. I'm so excited to have today's guest. His name is Nick Majuli. He is the author of the best seller, just keep buying proven ways to save money and build your wealth. He was actually on the podcast on episode 271, a bit back, so you can check out that episode. And he's the author of the new book, The Wealth ladder, proven strategies for every step for your financial life. Of course, he also writes weekly for of dollars and data, which is a very popular blog in the personal finance space, which focuses on the intersection of data and personal finance. Welcome back to the show, Nick, thank you for having me back on. I truly appreciate it. Yeah, so before I pressed record, you just said, you know, you work still full time. You have a job. Yeah, full time job, and you run a blog that's successful. You write weekly on that, and I think you're very active on Twitter, or x, as they call it, now, right? Like, I feel like your stuff pops up a lot for me. And I mean, you're you're writing, or you wrote your second book, I think that's very interesting, as someone who journey talks, is my full time thing now, but I can't imagine, well, I did at one point have a full time job and then, like, things on the side. But before we hop into your amazing content and what you can teach us about wealth, I'd love to know how you balance that all the full time job, the writing and all these different pursuits you seem to have. How do you do that? It's

Nick Maggiuli 2:59

very simple. I just stay in my lane. Like, all I do is I write one blog post a week. I don't do a bunch of other posts and a bunch of other stuff with the Twitter stuff i You see, like, I pre schedule all that stuff. Like, it just, I can't sit there and be live and doing it all the time. So a lot of that's pre scheduled. But I literally just write one blog post a week. And I've been doing it for almost nine years now. At the end of this year, will be nine years. I started in 2017 so I just do I just do something that doesn't sound that extraordinary, like one blog post, like most people, you know, it'll get a couple 1000 views. Nothing extraordinary, but you do that every single week, you learn about a new topic every week, and eventually, that information together can eventually become a book like just keep buying. Is my first book was like 60, 70% blog material. Obviously, I repurposed it, I polished it up, I went with an editor. Like, it's a much higher quality product than my blog, but, like, that's what it was. It was just week after week of doing that. And so I usually spend either Saturday or Sunday, spend, you know, six to 10 hours just writing a blog post every single week. And I just do that every week, and that's it. So I know it sounds like, oh my gosh, you have all this stuff, but that's all I do. I don't do podcasts. I come on as a guest, obviously, but, like, I don't have time to do podcasts, YouTube, all this other stuff that all these other people do. I just can't do it. I can't handle it. I have to just do my one blog post a week. And that informs everything else. Yeah,

Jamila Souffrant 4:12

well, I think that's actually a great terms of mediums to get your content out there, if you know, as a thought leader, or you want to build something, as a lot of people listening may want to do, and it could be any subject matter doesn't have to be finance, but something you're interested in, I think, is you don't I know podcasts and video and social media is like the thing that seems what everyone is doing now, but I do think there's still a space for the old form of just writing and even blogs, and it may not be as eye catching, or it's more long form, but there's still a space for that. And then I'd be remiss not to ask, just because, as a mom myself, knowing has it takes up so much time of my life and day, if and how you balance family, I hope that's not too much prying, but I just know that some people who are like watching and listening. Thing, whether they're have a partner or they have kids, like, how do they balance doing all those things too? So do you have that too in your life? Or is that not necessarily something that impacts what you do?

Nick Maggiuli 5:11

Yeah. So no kids yet. I do have a fiance and, well, by the time this comes out, my wife and everything, we're already planning everything. So that's another thing that people don't talk about. You see all these content creators, oh, do all this stuff. It's like, yeah, they don't have a partner most of the time. Or if they do have a partner, they don't have kids. So I think that's another thing that people don't talk about and and those that are doing a lot of content and that have kids generally. And this is, I'm not going to say this is true across the board, but if it's a man, for example, their spouse does a lot of, does basically all the child rearing, and they don't have to do, I'm not saying they don't do anything. But they just don't have to deal with it in the same way. So I definitely am going to, once I start having kids, I'm going to slow down with the blog. I don't know if I'm doing it once a week. After nine years, I think I give myself a break. Maybe I'll do it once a month or something, or only if I find a really good topic. It might be ad hoc, but I will definitely slow down. But that's a big piece of this. But when I started, I was 27 so I wasn't really in the, you know, starting my family at age. And so now I'm, you know, 35 so now I'm okay. I'm moving into that direction now, and so it's going to slow down. That's another piece of this. Yeah,

Jamila Souffrant 6:07

I think it's so interesting, because I just like finances, right where we're talking about, like, if we're trying to compare people's starting points, so what they have going for them, and the ability to do certain things that we're going to talk about right in this episode, it's like, even though you feel like you're prying in someone's personal life about asking about partners and kids, but it does impact the way you show up, whether it is how you earn income, how much you need to spend, and just how much energy you have to do things that can earn you money. So I do think it's important to if people are open to sharing it, sharing it because it makes other people understand kind of All right, here is the full picture of why this person may be able to do this in a way that I can't yet or right now.

Nick Maggiuli 6:48

Yeah, I know very few content creators that are really big, full time and have a family that's like, especially young kids by the time it's like, oh yeah, I have kids, but like, they're off in college and like, they have that free time. So it's very tough to put in that level of dedication effort and still be there for your family. I think that's just generally true. That's nothing to do with content. I think we hear this in the professional world everywhere, and so if you're working 80 100 hour weeks, it's really tough to do that with a family and really support them and be there for them in the way that you probably want to

Jamila Souffrant 7:16

be. Right now, I want to talk a bit now about your new book, and a lot of like the concepts that you have in it, because I think it's pretty interesting and a great way to present things that we talk about all the time, and hopefully a new way that get people excited or interested in looking at their finances. So you have something called the wealth ladder. The name of the book is the wealth ladder, and there's six levels to the ladder. So can we talk about what the wealth ladder is, and then we'll get into the levels of them and how people can identify where they are.

Nick Maggiuli 7:49

Of course, yeah. So the wealth ladder is just a new framework for thinking about your your finances, and I mean that in terms of you think about how you make spending decisions, how you make income decisions, how you make investment decisions. And the main idea is that every wealth level, and we're gonna we'll talk about the wealth levels on a second here. Each wealth level, you can have a different strategy to move upward on the wealth ladder, right? And so there are six wealth levels. Each wealth level is as a factor of 10 above the prior one. So what I mean by that is just based on your your net worth, right? Your total assets, minus your total liabilities, right? So if your net worth is less than $10,000 that's, I consider that level one, even if you have negative net worth anything less than 10,000 level one, level two, that's going to be someone with 10,000 to $100,000 right? Level three, that's someone with 100,000 to a million dollars in net worth. Level four, a million to 10 million. And then it goes upward from there. I think, you know, vast majority of people, like 98% of the United States, is in levels one to four. Very few people make it to level five, which is 10 million to 100 million, etc. The reason why I came up with this framework is, once you know one level, you can figure out all the rest, because they're all just factors of 10. So if you know, hey, level two is 10,000 to 100,000 then you know, oh, level three is just 100,000 to a million, right? And I actually like this division, because I think it it shows, like, in terms of spending money and things like that, it really does take a 10x jump in wealth to really fundamentally change your lifestyle. And so I'll always pose this question to somebody like, imagine, you know, you have a net worth of a million dollars. How much is $10,000 going to change your life? It's not at all. Like, yes, it would be nice you can go on a vacation or two. Like, there's some cool things you can do, but like, your day to day lifestyle is identical, as if you didn't have that $10,000 I think the same thing is true. Someone has $100,000 you give them, you give them an extra 1000. It's not going to really move the needle. It's nice. It's an, you know, a buffer. But I think that's where we start to think about the value of money and utility of money changes over time, and that's what the wealth ladder kind of takes into account. I can get into the spending, income, investment decisions, but that's kind of a high level overview of what it is.

Jamila Souffrant 9:50

Yeah, I mean, I'm going to want to get into all those things, because as you were talking, I do want to understand maybe we do get into this, or you get into it the way you're describing. Wealth in these levels are your assets minus your liabilities. It's not based on income. And is there a difference or more weighted value placed on the type of assets, like a more liquid asset than that? Because a lot of people in, even including myself, where a lot of my current assets are in like the value of my home or retirement account versus, you know, taxable accounts and other things that I can easily access. So how do you look at or break down the type of

Nick Maggiuli 10:28

assets? So the answer is yes and no. And so when I say in terms of the wealth ladder overall, I don't care about the composition of assets. Like, what your wealth level is is roughly based on your total assets, right? Even if, like, well, I have a lot of that in retirement account. Oh, I have a lot of that in home equity, but that's where your wealth level is going to be. Is based on that. However, when it comes to how you spend money, I think you have to use liquid net worth. And the reason why is, like, let's say I have $1,000 in my bank account, but I have a home with $500,000 in equity. I can't use that $500,000 and be like, Okay, it's my piggy bank. I mean, in theory, you can pull out a home equity line of credit, a HELOC, and start doing stuff like that, but I'm not recommending any of that. I'm just saying in general, like, your retirement money's for retirement, your home equity is there, and maybe one day you can cash it out. But for the most part, when it comes to spending, you have to use your liquid net worth. And I think that's a better metric, and it's a little bit more conservative, and I can get into that. I can get into that, I have a rule I use for thinking about spending in the wealth ladder

Jamila Souffrant 11:26

as well. And I'm smiling because I definitely felt that difference applying for, you know, just as an exercise to see what would happen my oldest son, he's going into sixth grade next school year. So I was like, Okay, let's look at some independent, you know, slash, private schools. I just kind of see, you know, and we had to submit all the paperwork and our assets and all that, and they looked at everything. They didn't look at like liquid assets, of like how much we could actually spend with cash flow. They looked at the assets that we had on paper. But I'm like, I'm not going to liquidate my retirement account or take out a loan to do this. But it was just so interesting to see, like when they came back to me, and again, I know that we're in a very privileged position to have assets at all, you know, compared to people who really need some financial aid. But I thought it was just so interesting when they came back. Some schools came back and were like, oh, no, aid, you pay full 65,000 a year. And I'm like, Did I put an extra zero somewhere in my income, because that, like, on a cash flow basis, that would not at all be possible. Yeah,

Nick Maggiuli 12:27

it's the it's the old joke, you know, house rich, cash poor type thing, if that, if you have it in housing or whatever you could retirement account rich, cash poor, it's the same type of thing. And so I think overall, when you actually look at wealth, I think you need to include it when thinking about the wealth ladder and decision making, but in terms of spending you have to, you have to think about your liquid net worth. And that rule I talk about is called the point zero 1% rule, or you could even call it the 110 1,000th rule. You basically take your net worth, you divide by 10,000 and that number is like the marginal amount you can spend extra on things. And so I come up with like, each wealth level has like a level of, like spending freedom. So like, level one, you don't really have spending freedom. You don't have a lot of money. By level two, I grant what I call grocery freedom. So when you go to the grocery store, you can kind of stop looking once you have $10,000 in wealth, you can kind of stop, start to stop looking at, like, the prices on things, at groceries, at the grocery store. You still kind of have to at that level. But once you get to like, the end of level two, by the time you have 100,000 by the time you have $100,000 in wealth, the difference between, you know, the cage free eggs and the standard eggs, or whatever is, is so small it's not gonna really make a difference. So if you have $100,000 in wealth, right, divide by 10,000 that's a $10 extra marginal spending you can spend, and it wouldn't really impact your finances. That's the whole idea behind this rule is, like, how much can I spend extra on some thing without impacting my finances? And so where that number comes from? It's very simple. Just imagine that your wealth grows by like, I'm going to use a very conservative estimate, you know, 4% a year, roughly, that's roughly point zero, 1% a day, like, on it's not, it's like, actually 3.7% but I don't want to get into all the math here, it's just 4% a year. Is about point zero, 1% a day. That means every single day you could spend point zero 1% of your wealth, and your wealth would remain the same. So you can kind of treat yourself a little bit. But where you get to treat yourself it depends, right? So I said level two is grocery freedom. You can probably treat yourself at the grocery store. Level three, I call that restaurant freedom. That's 100,000 to a million in wealth. When you go to restaurants, you can kind of upgrade, get nicer things. Oh, you know, do I want to get the $25 burger or the $35 salmon like that? Doesn't really matter once you start to get into level three, right? And then you can go from there, right? And so every wealth level has a spending, you know, a level of spending freedom, and is based on this rule, point zero, 1% so if you take your your wealth, and you divide by, you know, 10,000 or multiply by point 01, or actually, point 0001, you know, you get the point, point zero, 1% you get to that number, which is how much more can I spend? And this is where I say use your liquid net worth. By the way, this is not supposed to use your overall net worth to do this, right? Yeah, because you can't spend your your home equity, you can't spend your retirement account. And that's conservative. Technically, you could, but you could spend based on that. But, like, I really think if you want to be extra conservative, ensure that your spending doesn't really harm your financial progress, that's where you go to is you use liquid net worth. But I'm open for either. I'm kind of debating, still, I kind of want to hear people's reactions to it too, as they use the rule,

Jamila Souffrant 15:18

yeah. So it sounds like people should do this net worth calculation, like, two ways, based on liquid net worth, including all the assets they have. Net Worth, is that what you're saying? So you can kind of figure out, yeah, additional spending freedom you have, versus where you land in other areas,

Nick Maggiuli 15:36

yeah. And the thing is, you don't need to get it down to the penny. Like most people know, like, oh, do I have a million to $10 million like, people are gonna know, like, where they are, just like, they have some rough idea of where their assets are, where their liabilities are. You don't need to get this down to the penny. This is not a science. This is an art. It's just like, hey, if I have somewhere between 10,000 $100,000 in wealth, I'm probably in the grocery freedom stage right. I can probably relax when I go to the grocery store, I don't need to pinch pennies every single time. You know, if you want to, you can. That's your it's up to you. You can spend your money however you want. I'm just saying. I'm trying to find a way that allows people to spend more money as they build wealth. And I think wealth is not always the case, right? For Trust Fund kids and people that hit the lotto, it's not a show of discipline. But for most people, having wealth shows that you've had some financial discipline in the past. I don't think that's true of everybody, but for most people, it's like, hey, look, I had to save this money, right? Most people in life aren't handed anything, so they have to go and work and save and so by saying, hey, look, I've saved up $100,000 in wealth. Okay, now when you go to a restaurant, you can spend a little bit. It's just a framework that I'm trying to help people with spending guilt, because there's so much spending guilt out there. And I think this is a way that allows for some lifestyle creep, without allowing, you know, without going overboard. Basically,

Jamila Souffrant 16:46

let's talk a bit about income. I know that that's not necessarily we're not looking at that for our formula, but it's very real for people in terms of how much they feel they can actually spend, you know, especially if maybe you have inconsistent income, and income that fluctuates even like the thought of your assets, your net worth, like that's one thing, especially depending on how old you are and how much working years you have left until you can access maybe the more protected accounts and things where you don't have a mortgage anymore. So you paid off the mortgage, and then your expenses, your need for expenses, goes down. But how does one think about the working years and figuring out how to spend based on their income while they're still trying to get up the ladder. Right? How do you think about that?

Nick Maggiuli 17:33

Yeah, so I think the main thing, what I like to think about with income is I don't like coming up with, like, a fixed spending rule. This is something I talked about, and just keep buying because it's like, a lot of times, most people have to just spend, like, what they need to survive, like the necessities. You need to pay rent or have a mortgage, right? You need to pay for food. Like, I can't be like, Oh, just spend less. Like, it's very difficult to do that for a lot of people. So you have some sort of necessity spending. The idea behind the wealth ladder and using your wealth is, like, What's that little extra kind of, like an upgrade, right? Like, your income is going to pay for all your stuff, the wealth is what pays for that little upgrade, that little extra thing. So whether that's at the grocery store or a restaurant or when you're traveling, et cetera, right? And so the thing I like to think about when it comes to like income in this in this scenario, is, like, if you have more income than you have spending, then you're saving money, and that's great. You can still, though, still use the wealth ladder for that marginal spend, right? Which is on a day to day basis. The other thing I like to think about is like, I want people to get out of the thinking about income rules, like, I can only spend 10% or 20% or I need to save 20% of my income. I want them to think about like, Okay, I'm just spending what I'm spending, and like, How can I raise my income? Because what I've found and what the data shows, and it'll show in the book, it's like, for the most part, people higher on the wealth ladder just earn so much more than people lower on the wealth ladder. This is not a spending issue. It's not like they're like, Oh, I just spend better. People in level four and level five don't spend money much better than people in level two and level three. They just have so much more income. And so I think we focus so much on spending. I'm not saying spending doesn't matter. I think spending matters a lot, especially in level one, but once you start to build some wealth and get out of that, I need your mindset to get out of like, oh, I need to be spending less and more to like, I need to be earning more. And that's a very different thing. And if you actually look at what's the most correlated thing with long term wealth, it's someone's income. So it's not something that's going to build overnight. It takes a long time, but it's one of those things where, like, that's the main focus. And I think people focus a little bit too much on spending to their detriment.

Jamila Souffrant 19:29

Yeah, I definitely, I talk about this in my work, too, and like in my book, where the driving force to reaching your goals is income, right? Even if you can choose to spend less if you want. But ultimately that is not unless you're super, super frugal, which, you know, a lot of people, especially nowadays with inflation and just like the cost of things that if you have a family and a partner, I just think it's harder to be as frugal as our you know, my parents were like, there's a lot of options. It's just a lot. And so ideally people need. Focus on the income. I just think, for personal finance reasons, quicker and easier thing to tell people is to cut back. Because, like you said, just like in your level one, it was like my explorer level of my journey, or stages at the very beginning, and like to really almost stop and get out of that stage quicker, especially if you don't necessarily have an income problem. Maybe you do earn enough. You might have an expense problem where you are spending above what you're bringing in. And so you're going to need to look at that in the meantime, while you work on the habits and mindset and all the other things that will help you then be able to manage the more income you will bring in. But you know, I do think that is something where the person who does not care about personal finance does not necessarily want to listen to podcasts or read books about this, they're just like, oh, this person is just going to tell me I can't spend and, you know, here we go again, like they want to live their lives. And I think trying to connect them with it's more about mindful spending. And yeah, maybe there's things you just cut out, not just for the sake of it, but to get to where you want to be, and then ultimately, you decide where you want to spend. And talking and approaching it that way with personal finance, I think hopefully, is better, but I can see why it turns so many people off who are just like, I just want to spend more

Nick Maggiuli 21:18

money. No, I completely understand. I think there's a large piece of this. It's like, there's a balance between, like, okay, obviously we want you to, like, enjoy your life, like, there you only live once you it's not like one of these things where, like, you should just, you know, live like a hermit all the time, the same time, you want to kind of have that a little bit more freedom. And so the thing I try to tell people is, like, just get out of level one. I think just getting to, like, $10,000 you don't have to have to have even $10,000 purely in cash in your bank account. But like, even having a few $1,000 you hear these stories about during COVID, when people got these stimulus checks, it changed some people's lives. Even though it wasn't like, a ton of money, it's like, oh my gosh, I can breathe. I don't have to worry about my my exact next paycheck to, you know, to put food on the table. So like, that little buffer can mean so much in level one. So like, I'm like, hey, you know the quote I use is, like, atypical results require atypical actions. And I think that's only true in level one. So the only time I'm ever gonna say like, Hey, if you're in a really dark place financially, you gotta really analyze everything until you get out of it. Then once you're like, level two, you can take your foot off the gas and you can relax a bit more. I don't think you have to be as spending conscious once you kind of have demonstrated some financial discipline. I just think it's hard. Like some people can be very deeply in debt, like I'm $100,000 in debt. How do I get out of that? That's when you talk about income, when you talk about a lot of things. Of course, spending is going to help,

Jamila Souffrant 22:34

but there's got to be a different discussion there. Hey, journeyers, if you are loving this podcast, then you will love my book, Your journey to financial freedom, a step by step guide to achieving wealth and happiness. I wrote this book for you. This book is for you if you want a clear and enjoyable path to having more money, options and a rich life. This book is for you if you hate your commute and the fact that you need to seek approval or permission from a boss. I hated that when I worked this book is for you. If you weren't born into wealth, you didn't marry rich or won the lottery, but you still want freedom. This book is for you. If you're at a crossroads, a major decision or event is imminent, maybe a career change, marriage, starting a family, pressures are reaching a tipping point, and the discomfort and the desire for more can no longer be ignored, and this book is for you. If you find yourself zoned out at meetings, looking out the window or daydreaming about the life you truly want, so go pick up your journey to financial freedom.com. So I can show you how to map out how to get from where you are today to where you ultimately want to be and enjoy the journey. While you're on the path, head over to your journey to financialfreedom.com to see where you can pick the book up. It's available on Amazon, bookshop.org, Barnes and Noble, your local bookstore everywhere. Go to your journey to financialfreedom.com to get the book. Now, one of the other things that we kind of touched upon when we said we talked about family a bit and kind of life stages that we go through is the evolution of your financial strategy as you go through major life changes, right? And so how would you give someone advice, whether they're going through a career change, maybe they're in their early 20s, they're just getting into the job market, or they're in a career change, or they have, you know, family and someone else is taking care of how do they look at or approach their finances differently?

Nick Maggiuli 24:36

So if you're if you're taking care of someone, you have a lot of liabilities. I mean, the hard thing, at least from like, an investment standpoint, you can't take a ton of risk with your money, like, really the the only long term or medium term solution is to try to find ways to build income. Now, what does that mean? Skills, education, if is it free education? Is it like a night class? I don't want you to spend too much money to do this, because I don't think that's always the solution. You can be spending a lot of money, and then you're worse off than where you started, right? So it's like, what are the skills that someone will pay for and try and find those, or make your own business and do something, of course, like, once again, this should be a low cost thing. You shouldn't be like, Oh, I'm gonna go rent a space and spend all, get all these expenses, like, you could end up much deeper in a hole than where you started. So I know it's not a great solution. And once again, once again, once you're in, if you're in a tough place, like, the answer, unfortunately, is like, you have to do something different, right? Because what you've been doing isn't working in that sense. And there's other constraints. There's other mouths you need to feed, possibly. And so it's like, how you get out of that, you have to be very, you know, pragmatic, and how you approach a lot of this stuff. What

Jamila Souffrant 25:39

advice would you give for someone who is like, all right, I do want to earn more. I know I need to earn more. I'm at, you know, a level in which I know it's definitely not a spending thing or issue. It's income issue, whether it is to pursue their current job and move up the wrong there or start a side business or both. And I know that's very general, because, you know, everyone has different skills or, like, motivation, but what kind of, I guess, insight or help would you tell someone in terms of career growth?

Nick Maggiuli 26:09

Yeah, so there's usually a couple. I mean, if you really think about like, the highest paying like professions out there, they all, they all have one of a few things in common. You either need to have some, like, really advanced degree. So that's like doctor, lawyer, that's usually, I usually don't recommend that as the first choice, because you have to go deeply in debt, and there's a lot of things. I'm not saying that that's not a good choice, but it could be a much longer journey. That's probably the longest and most difficult one. Second one is sales. If you can sell stuff like you can eventually get one sales job transition to another sales job. Of course, not everyone has that skill. I don't think I'm the best salesman, even though I'm trying to sell books and all this stuff, I'm not the best salesman. I best salesman. I'm just, I try to be a good writer. But like, I think, okay, sales, can you do that? Because if you can sell stuff, you can earn commissions. And once again, you just start selling bigger and bigger stuff. Maybe you start selling at one job. But then eventually, like, oh, now I'm selling. You're a real estate agent, and you're kind of selling real estate in a way, and so you're earning a commission there, right? That's another sales job. If you think about, you got to be good with people. If you can't do that, what about something technical? I know there's people out there like just knowing Microsoft Excel very well, like paying for a little course and just doing that. I know there's jobs out there that'll pay you 50 grand a year to go to if you know Excel very well. And I will tell you there are a lot of people that do not know Microsoft Excel. And so just having that, that skill, and demonstrating that you can probably get a job at an accounting firm or something like that. Now, of course, I'm not the expert on that. Do some research there as well, but like, these things are happening. So if you're not going to do sales, do something with technical stuff. If you're not going to do technical stuff, you can try an education. The last option is, like, are you good at organizing, organizing people, and like, moving in the right direction with the business. Of course, that's also very difficult to say, like, oh, let's just start a business. And I'm really good at being a manager and managing a group of people to get something done, if you can do that in a way that produces a lot of value that people are willing to pay for. Great. But once again, that's also a difficult thing. But those are the people that make a lot of money. They're very technical, they're good at sales, they have a lot of education, or they're some sort of business owner, right? So those are the four big ones. I mean, there are others, you know, obviously there's, like, you know, entertainers, athletes, there's all these other things. But I just can assume most people aren't going to do that. But you can see, like, there's a couple big areas where people earn a lot. And so if you're like, Okay, what can I do to get into one of those areas? And how can I basically do that to increase my income? That's the goal,

Jamila Souffrant 28:20

right? Right? Now, what advice can you lend to like the creative side? Because I know the technical side, like we talked about, which, you know, knowing Excel or getting advanced degrees, which is great, right? And I know there are a lot of creatives where maybe they don't think that is their strong suit being more technical, but they are, whether it's athleticism and or creativity and other things, or writing, where it's not necessarily a proven path to make money. You see some people break through and make a lot of money doing those things, but it's like the average person doesn't make that much money doing it, but there is a passion for it. What advice would you give to that person? You know they want to keep going up the wealth ladder or get to the next level, but there is a cap maybe, on the kind of income they can make in that specific career, but that's what they enjoy doing. Then I

Nick Maggiuli 29:13

would look at as like, that has to be like a side hustle thing. Like, that's kind of how I didn't make money for the first three years I was writing. I've been writing I've been writing for nine years now. I didn't actually start making any money until year four. So I'm not saying that that's what you should do. Like, obviously, like, I had a full time job that whole time, so I had the luxury of not having to earn income. But that's an example of, like, Okay, if you really love it, like, it should just be easy for you to keep doing it. If you keep doing it, there's a possibility that it could start generating income for you. That's obviously not guaranteed. And you're right. It is a very it's a long tail. Especially with especially with athletes, with content creators, financial content creators, like, you're in the top point 1% of financial content creators, right? Like, just by having this podcast at this size, like, it's very rare to get there, right? And so I think it's something to kind of keep in mind is, like, it's very tough, it's a long game, but if you love it, like, keep it. Stuff out there, get feedback, improve your product like, and just keep doing it like. And I don't have a guarantee there all once again, it is a very difficult thing to do. I think you just have to keep doing it for a long time and see what happens and and just follow like, what what's working, what's not working, like, you're gonna get feedback. I think the what I see most people do is they just give up too quickly. And I know that's kind of like, that's always the cliche thing to say. But, like, I don't know that many people, there are some out there that have been doing it for a long time, just haven't had any success. But like, and, I mean, a long time you got to do, I'm talking at least five plus years. Very few people, I've seen people start blogs within two months. Their stop. You know, I've seen people start a podcast within less most of them die within 20 episodes, right? So it's very rare to have 271, 400 like, if you think about the number of number of episodes you start to get to, it's like very few people make it there. So I think it takes a lot of work, but that's what I would say,

Jamila Souffrant 30:49

yeah, yeah. No. I think you know, if it was easy, everyone would be at that level. The reason why there are less people as you go up or make as much money is because there is a longevity and consistency and persistency that you have to have to achieve that. And I think for most people, it's deciding what you're going to pursue and sticking with it and keep going.

Nick Maggiuli 31:10

Yeah, I agree. I think most people can get into level three and possibly level four with hard work. I think there's some luck involved, obviously, like if there's always luck involved everyone's life, I think getting to level five and six, which, once again, level five is 10. Again, level five is 10 million to 100 million. Level 600 million plus requires even more luck. I'm not saying that all those people are lucky, definitely not. But I could see a world where, I think in every iteration of the universe, Warren Buffett is a multi multi millionaire. I'm not debating that. I'm not saying he's lucky. But the to get to that level of, you know, the multi multi billions, I think there's always some luck involved, right one wrong move somewhere 50 years ago, and maybe he only ends up with $200 million and he's still famous, but not as famous, you know what I mean. So there's a lot of luck involved with this stuff. But I think just through hard work, a lot of people can get to level three, which is 100,000 to a million, which is like the American middle class. That's like your bread and butter American middle class. 40% of US households are in that level. And I think it's a level that's very attainable through hard work and persistence. You know,

Jamila Souffrant 32:05

what would you say is the best way for someone to build up to 100,000 like that? You know, the bottom level of that's

Nick Maggiuli 32:11

level level three. That's the top of level two, bottom level three. Yeah. Okay,

Jamila Souffrant 32:16

so what would you say is the best way for someone to get there, you know, I know there's different strategies or ways, right? It could be through owning a home, which is kind of more of a it's not as liquid of asset, or it's investing, but if you're investing long term, that you know might take a little bit of time, what for you you feel like, based on your research, or like all the readers or people you've come across have, they gotten to that level?

Nick Maggiuli 32:42

So there's a few things I would think of. I think a lot of these people have gotten some form of education. Now, once again, that does not necessarily mean you have to have a legal a law degree, or a medical degree, or even a bachelor's degree from a college. I think there's some form of education, whether that means you're getting a formal college degree or you're getting, there's a lot of blue collar jobs out there, a lot of technical jobs, you know, you're a plumber, you're an electrician. I think a lot of those jobs, those types of technical degrees, can also get you into level three very easily. But it just, it takes time. Like, I think the main thing is, like, increase your income, it's going to be very difficult to get there on a typical, you know, on, like, a minimum wage, salary, it's just the spending and the income, just, they basically match each other, sometimes not even, and you're actually spending more than you're earning, and you just can't build wealth, right? So you have to get some sort of education or some sort of skill that's going to get the ball rolling so you're saving money, and then, yes, invest that money over time. And so between the investing, you know, just keep buying, which is, like, my, my whole thing here is, like, between just keep buying and, you know, and increasing your income, those two things should, over time, get you into level three. And I fundamentally believe that, like, it obviously takes time, and every person's journey is going to be different. It's not going to happen overnight. And like, that's the thing we need to emphasize, especially if you came from, like, your family came from level one, level two. You guys didn't really come from money. Like, this is something that's going to take time, because you have to learn like you don't know what you don't know. And I talk about this in the book like, I was very fortunate. I got into Stanford University. I had a full ride, like, just aid, you know, because my family didn't make much money, so I was very fortunate to be there. And my friend comes to me and he says, Hey, have you applied for internships? I'm like, What are you talking about? It's like my sophomore year, and apparently, in the winter, were supposed to apply for internships for, like, that summer before junior year. I didn't even know that this was happening. And he's like, Yeah, dude, everyone's been applying. Like, you don't like, I had no clue. He's like, people know about this. People from certain wealth levels know about this because their parents tell them about or their parents went through that recruiting cycle, right? And so if you're not exposed to it, you're going to walk through life and have no idea what the options are, so a lot of time it's just you going out there, learning, talking to people and just getting information so you can make better decisions. And I was very fortunate that my friend came up to me and told me to apply for that internship, because that made me realize, by the way, I got rejected from everything, so I didn't get any sort of internship that summer, but it made. Me think, oh my gosh, I need to start doing research work or something so I can build my resume, so in the future, I don't get rejected, right? So it pushed me to actually make different decisions that I probably wouldn't have made otherwise.

Jamila Souffrant 35:11

Yeah, I love that you brought that up because, I mean, I agree wholeheartedly with that in terms of, you know, there are all the even just me discovering the fire movement, where it's like, there are things that are happening, where it's like, the norm, people are doing it. You have no even clue that it's an option, but for someone, it's just what they do. It is a resource or just a nugget of information that is is helping them live a different type of life. And I was just always amazed when I every time I learned something new, or find out someone is doing something I didn't know was even possible. I'm just like, wow, like the information is so important and access and awareness, and I do feel like it's not necessarily luck. That's why I think mindset goes so much into this. Because I do believe, like people can be shown things or can be told things, and they're not ready to receive the information for whatever reason, maybe stage of life, maybe they're tired, maybe they just, you know, it's just, they don't understand it. But I do think that's partly a mindset thing, because that you have to, like, jump on every opportunity that comes across your eyes. But I do think there's something to be said for like, being interested in something, or seeing something, or hearing, like, a question, being like, did you do this? And not just saying no, and like, just, like, continuing on, but like, Wait, should I do this? And researching and thinking like, you know what? I deserve to have a shot too, and figuring out how to get to that place. And like, I always say that's how I've been able to evolve to where I am today. Is because I've always just been curious. And I always thought, like, why can I also do this thing this other person is doing?

Nick Maggiuli 36:46

Yeah, exactly. I think exposure is a lot of it. And once again, I was lucky in the sense like I happened to, yes, I had maybe the right mindset, but I happened to be around people that knew about this stuff. If I wasn't there, I wouldn't have known. I wouldn't have started trying to build my resume in my sophomore year, which eventually helped me get a full time job. You know, a year later, I'm doing recruiting in my junior year. So it's like, it's all this type of stuff that you don't know about, and as you start to learn about it, it just becomes very interesting,

Jamila Souffrant 37:13

yeah, and the people that you are around, for them, it was normal. It's kind of like everyone's doing this. Like, why? Why are you not doing this either? And so it makes you be like, Oh, okay. So I know you write a lot, or you interact a lot with your readers, and there's, like, just been a lot happening in the financial markets and space. What's like something that you wrote about recently, or that, and I know by the time this comes out, it may not be as the you know, recent, but just something that's been interesting, or you find that you get feedback from that. You're like, oh, people are interested in this topic that you think would be interesting to share

Nick Maggiuli 37:45

here. So I just wrote this post recently called give now, not later. And this idea is, of course, it's not written for most people. It's written for like, an older generation that, you know, sitting on a lot of wealth. And the idea is, like, there's a lot of people. When you ask people, like, Okay, if you could get an inheritance, like, would you rather have a lower amount earlier in time or a larger amount later? And almost overwhelmingly, people would take the much lower amount earlier in time, because it can really fundamentally change kind of what's happening in your life at a given point in time. Like having, and the numbers I use, like, if you could have, I remember this is a very high inheritance, 250k at 30, half a million at 40, or a million dollars at 50. And by the way, that's like a 7% real return over that period. If you took 250 K and grew it by 7% a year, you'd have 500 at 40, and then, you know, in 10 years, and then grew that by 7% a year to have a million in another 10 years, right? So I asked them this, and most people, overwhelmingly, like 70% of people say they want the 250 K at 30, because they think you can really change your life. You can make better decisions. I think now, especially with housing prices as high as they are, there's a lot of young people that kind of feel like they can't really do a lot of the family formation stuff that maybe their parents or grandparents were able to do. And I know there's a lot of older people out there that are sitting on probably much more wealth and they'll ever need. And so is there ways that they can give and help out and help their their younger ones? And actually, I think there's already some data this is happening. I remember, I don't know if this is true. I heard something that was, like, they say 50% of, like, Gen Z and millennials are getting some form of financial help from their parents, which is, like, kind of seems like a lot, but like, I think that number might even go up, because it's, it's tough, right? And there's people that have these homes that they bought for much, you know, very cheap price a long time ago. Now a lot of these homes are easily very high six figures. And it's like, you know, I bought, my grandparents bought their house for 30,020 $7,000 it's now worth, like, 750, it's like, you know, obviously it was like the 1970s a long time ago. But it goes to show just how much wealth has been created, and it's not necessarily being equally distributed. And so I'm trying to, like, push those people like, Hey, you have a lot of wealth. Give something to help out your children, your children's children, etc, you know. So that's kind of the thinking behind it. I know it's not really as relevant to this audience, but I think it's something to think about. And if you have someone like, send them the article, see what they say. I know it's, it's, it's tough. Have those conversations. But I think you don't want to get a big check at 50. No one wants that. Like, of course, like, I'd rather, I'd rather get a much, much smaller check now and not get anything at 50 than, like, okay, like, you know it just no one wants that. No one wants that money. Then they'd rather have it now. And I think you can make much more of an impact. So that's kind of my a big thing I've been talking about recently.

Jamila Souffrant 40:19

Yeah, no, I think it's actually really relevant to this my audience, because I mean Bill Perkins, who was also on the podcast and with die with zero, we you know that he talks about that in his book too. Is that with that experience or that thing, especially with your children, been more beneficial, right when they needed it in their building wealth stage? So I totally agree with you. And yeah, your numbers are like, like might be bigger for some people, depending on like, where they are in life. But even if you broke that down to smaller like numbers, and you know, like, how you said, the utility of money kind of changes based on like, how much you have. And so like, even if you have less and can't give less, I think as long as it's not like, detrimental to you. So that's one thing I try to tell parents is that, you know who come and say, oh, I want to invest for my kids, and I get it, but like, are you okay, right? Like, I think the best financial gift you can give your children is for them not to have to worry about you when they become adults and start making money. But after that, what are the ways in which you can give back to your children as they're building wealth to help them, because it's going to be more beneficial, like, depending on your age, that they get this money in their 30s or 20s, versus, like, when they're 60 or 70 and you're, like, leaving the earth, God willing, you know, later in

Nick Maggiuli 41:31

life. Yeah. I also think the other thing too, is like, I'm telling the people who are giving the money away, like the grandparents of the world, be a little selfish and make it a memory go instead of just giving them a check for five grand, 10 grand, whatever it is, go take the family on a family vacation while you're still alive, versus waiting, okay, you die now they get a bigger check. What do you think would have been better for you and for them is like you got a better memory with them? Take them on a vacation somewhere, right? Spend a little bit of money on that. I think that's a far better way to do it. Of course, you can help with education expenses you can help with, you know, housing, like helping with the down payment. Like, there's all sorts of ways this can be done. I think the most memorable and most impactful things is obviously creating those memories, having shared vacation, whatever that is. I prefer that. And I think it's the easiest thing to pitch people on. It's like, yeah, don't. Wouldn't you rather do that now? Or would you rather just like, do you want to just accumulate more money and then just pass it on, like, there's nothing fun about that. No one's gonna be happy when that happens. Obviously. Like, yes, getting money is great, but no one wants to lose a loved one, right? It's much better to spend some of that down and just enjoy that time and enjoy that you work so hard for that money, might as well do something with it. So that's my only take. And people like, Well, what about medical costs? Like, yes, that's a risk, but at the end of the day, there's Medicaid. So it's like, it's not, trust me, it's not perfect, but there's a lot of people on Medicaid, and they're getting decent care. And like, of course, is it as good as the absolute best care out there? No, but it's still something. And like, you know, we're all gonna die eventually. So it's like, you gotta think about what you really value. Do you wanna just get the best medical care when you're 90, or do you wanna, like, have a much better, like, memory of your children or your grandchildren when you're 70? Right? It's like, that's, that's the type of thinking you have to do when you go through this

Jamila Souffrant 43:02

Nick this conversation has been delightful. Can you please tell people where they can get your book, follow more of your work and keep in touch with you. Yeah,

Nick Maggiuli 43:13

my books everywhere. Books are sold Amazon. You can find it. You can also just go to wealthlatterbook.com you can see all the stuff there, read about it, etc, and then you can find me on on X, you know, I'm at dollars and data. You can find me on Instagram. Nick, Majuli, I bet we'll have links in the show notes or whatever. So yeah, anything like that. And once again, feel free to DM me. I try to respond to every single DM, as long as it's not absolutely unhinged. I promise I will respond to you like so

Jamila Souffrant 43:35

glad you gave that disclaimer. But no. Thank you so much for coming on the show. Super insightful, and this was

Nick Maggiuli 43:42

helpful. Thank you. Thanks so much for having me on. I appreciate it. Thank you. Don't

Jamila Souffrant 43:47

forget. You can get the episode show notes for this episode by going to journey to launch.com or click the description of wherever you're listening to this and you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journey to launch.com/jump start. If you want to support me and the podcast and love the free content and information that you get here, here are four ways that you can support me in the show. One, make sure you're subscribed to the podcast wherever you listen, whether that's Apple podcasts, that purple app on your phone, your Android device, YouTube, Spotify, wherever it is that you happen to listen, just subscribe so you are not missing an episode. And if you're happening to listen to this in Apple podcasts, rate review and subscribe there. I appreciate and read every single review. Number two, follow me on my social media accounts. I'm at journey to launch on Facebook, Instagram and Twitter. And I love, love, love interacting with journeyers. There three, support and check out the sponsors of this show. If you hear something that interests you, sponsors are the main ways we keep the podcast lights on here. So show them some love for supporting your girl. Four, and last but not least, share this episode. So this podcast with a friend or family member or coworker so that we can spread the message of Journey to launch. All right, that's it until next week. Keep on journeying. Journeyers. You.

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