Climbing the Wealth Ladder with Nick Maggiulli
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Welcome to Money for the Rest of Us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it. I'm your host, David Stein. Today is episode 528. It's titled Climbing the Wealth Ladder with Nick Maggiuli. Nick Maggiuli is the chief operating officer at Ritholtz Wealth Management, but he's also the creator of Dollar and

and Data. A blog he's been writing regularly since 2017. The goal of his work at Dollars and Data is to help you make better financial decisions using the best information available. His new book, The Wealth Ladder, Proven Strategies for Every Step of Your Financial Life, is about the different rungs of wealth and our decision framework should be different based

Based on our levels of wealth. And we talk about the rungs on the ladder, how luck can impact our wealth, either up or down. Sometimes bad luck is amplified at lower levels of wealth. Good luck can be amplified at higher levels of wealth.

We talk about how AI is impacting what Nick does in his work and how it can impact us as we think about this Wealth Ladder Framework. I hope you enjoy this conversation with Nick Majore.

Majuli. Well, Nick, thanks for being here. I saw on Instagram, you said that it's been five years working on this book, which I'm glad took that long because that means it's good. And I thoroughly enjoyed the book. It was very well done. Could you briefly, though, describe the Wealth Ladder framework? We'll dig into it in more detail through the interview, but maybe just a shorter version. How did you come up with this and what are the different rungs of the Wealth Ladder?

Yeah, well, thanks for having me on. Appreciate you liking the book. In terms of the framework, the wealth ladder is basically the idea that your financial strategy should change as you build wealth. And in particular, the wealth ladder has six distinct levels. And I came up with those levels based on net worth. And so as your listeners likely already know, your net worth is just your assets minus your liabilities. So that's everything you own, your car, home,

stocks, cash in a bank account, minus everything that you owe to others, right? Mortgage, student loans, credit card debt, etc. So once you have your net worth, you'd fall into one of the six wealth levels. And I'll just briefly just do the levels and then we can go from there. But those six levels are level one, which is less than $10,000 in net worth. Level two is $10,000 to $100,000 in net worth. Level

Level 3 is $100,000 to $1 million in net worth. Level 4 is $1 million to $10 million in net worth.

Level five is $10 million to $100 million in net worth. And lastly, level six is over $100 million. And the nice thing about the framework is once you know one of the levels, you can just figure out all the rest because they're just either multiply by 10 or divide by 10. So if you just memorize, oh, level three is $100,000 to $1 million in wealth, divide by 10, that's how you get to level two, which is $10,000 to $100,000, et cetera. So one of the interesting things I found that was...

And maybe why the book resonated with me, it was sort of intuitive. You have what you call, I think, the 0.01% spending rule that as you go up the wealth ladder, sort of what you spend can change or how much you could sit there and pondering changing, for example. So I saw a billionaire had

He had to be a billionaire, but he was talking about investing in this condo where the condo needed to be retrofitted. And so they put a couple hundred million dollars into this building and the price of his condo, probably penthouse since he was a billionaire, didn't go up. And his comment was, well, it's only a million or $2 million. Doesn't matter to me. So given that, what is this 0.01% spending rule? How does that... Clearly probably a level six type gentleman. So what is this rule? The rule basically states that

you know, you just multiply your net worth by 0.01% or divide by 10,000. That's a simpler way of doing it. And that's the amount of money you can spend daily. It's like a trivial amount of money, right? So for example, if you have a net worth of $100,000, that means you could spend $10 a day with

without impacting your long-term wealth. And where this comes from, there's this assumption, a very, I think it's a conservative assumption that your wealth will generate 0.01% per day, right? And so if you do that, annualize that over the course of a year, over 365 days, that's 3.7% per year, which is not that much. I mean, I would say it's a conservative, you know, I think any diversified portfolio over the long haul should get at least 3.7%, right? So after inflation, right?

So if you assume you can get a 3.7% long-term real return on your wealth, which I think is conservative, then that's how much money your wealth's throwing off. So obviously your spending is going to be based on your income. There's no debate there. I don't, I'm not trying to say you shouldn't spend based on income at all, but it's just like, it's that marginal dollar you spend. Like when you're going to say, oh, should I get this thing? It's always that marginal thing. And I think that should be determined by your wealth. And so

Every level on the wealth ladder has like a spending freedom. Level one doesn't because there's not enough wealth there. It's less than $10,000. Right. So like you're spending freedoms less than a dollar when you divide by 10,000. But like level two, I call that grocery freedom because that marginal spend is going to be anywhere from $1 to $10 per day. So basically, when you go to the grocery store, you can kind of buy whatever you want at that point. You know, by the time you're at you have $100,000 in wealth. Right. Right.

And level three, I call that restaurant freedom because that's $100,000 to a million dollars in wealth, which would correspond with $10 to $100 a day using the 0.01% rule, right? And then level four is travel freedom, right? And so you can see as you kind of go up the wealth ladder, the point...

The point of this rule is to allow for some lifestyle creep, but only after you've built wealth. So it's kind of like a it gives you some freedom to splurge more, but it's a very slow rate. It's a very slow burn upward. Right. It's not like, oh, now you can do this. Now you can do that. It's like, nope, you get to spend point zero one percent per day.

of your wealth. And that could technically be in excess of your income. Obviously, I don't want people spending all of their income and then 0.01% of their wealth. But in theory, you could do that and your wealth would stay stagnant over time, right? Using all the assumptions I've given.

So we were, my sons and I were talking about this yesterday. So I'm level four, which obviously is pretty wide. So technically I have travel freedom, but not really, right? Like I can't stay at the Ritz every time we travel, right? There's still, we still have to do Airbnb sometimes and not, because you can...

I just remember we had a client at my old advisory firm, an institutional firm, FHG Advisors, and we didn't do a whole lot of individuals, but they had $20 million and they just got to, I guess that would be level five, newly minted. They'd sold a dollar store, a chain probably, and they wanted to spend $2 million a year.

Yeah.

Yeah, that's a good question. So just just to kind of clarify this a little bit more is clarified in the book. When you enter that level, that's the beginning of that freedom. So you don't really have like it's not like, oh, I hit one million and one dollars. Now I can stay at whatever hotel I want. Like, no, it's the beginning of it. Right. So it's like if the marginal decision to stay at the Ritz is only one hundred dollars more like per night than it is to stay at.

the other hotel, then yes, then you have that travel freedom, right? Because at a million dollars in wealth, that would be the $100 using the 0.01% rule. But if it's like over $1,000 more than you don't, you can see like, you know, depending, it really is depending on the marginal decision, right? So I think that's the beginning of travel freedom. And so as you get deeper into level four, you get more and more, but it's not full travel freedom. Even having $10 million, you're probably not

flying private regularly by any step of the imagination. That private flight starts to happen more commonly around $20 million in wealth or $2 million in income. There's a guy named Preston. I can't remember his last name now, but he writes all about

private stuff. And so it's not really full travel freedom we're getting there. But in terms of budgeting, does budgeting matter? Of course it does, right? And it's going to matter for anybody, but your friend you had or your friend, the person who had $20 million spending $2 million a year, that's not even the 4% rule, that's the 10% rule. You're probably going to go broke pretty quickly unless you can cut that spending, depending on how long you have to do it for. But yeah, you can see the 10% rule doesn't really work on any time scale. So...

And they fired us, too, because we couldn't we could not justify the 10 percent rule. And they found somebody that could, I guess. Before we continue, let me pause and share some words from one of this week's sponsors, NetSuite. It's an interesting time for business. Tariff and trade policies are dynamic. Supply chains are squeezed and cash flow tighter than ever. If your business can't adapt in real time, you're in a world of hurt.

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slash David. Awesome. So most of our listeners are, would be more kind of level three to level five. One,

One of the things that stood out to me is really to get to level four, one can get that through getting education, getting a good job and investing. But you included a couple of tables that are pretty fascinating in terms of the probabilities of getting from level four to level five. After 10 years, only 3% probability or 3% did. After 20 years, it was 80%.

Why is it so difficult to effectively get from having $10 million in wealth or between 1 to 10 to get up from 10 to $100 million of wealth at level 5? Yeah, so it's difficult to get out of level 4 because the things you need to do to get into level 4, to get into 1 to $10 million in wealth, are very different from the things you need to do to get beyond $10 million. And there's a great book by Marshall Goldsmith called...

what got you here won't get you there. And it's a business leadership book. It's more about using a different strategy over time. Like, hey, the strategy I use to get to this step in my career is very different than the strategy I need to use to get to my next step. And the same thing is true when in level four of the wealth ladder. And if you think about it, like to get into level four, like you usually just need a decently high income. You need some good investments and you need time. Right. So the median it

household age in level four is 62. So if you took all the households in level four, the median one would be 62 years old. Less than 1% are under 30. It's very rare for someone to have a million dollars in wealth and be under 30. And in addition to that, their household income in level four is around $200,000. That's the median, right? So like you need to have a decent household income, right? So you could have two six-figure earners or one, you know, $200,000 earner, et cetera. You save that money, you invest, you get into level four.

to get into level five, it's just a completely different ballgame, right? And it's because most of the people in level five are either like celebrities, athletes, entertainers, or those are people that have very high incomes, or it's going to be people that have businesses, right? It's usually going to be a lot of entrepreneurs. So the vast majority of people in level five are going to be entrepreneurs. And so unless you're one of those people, it's very unlikely that you're going to be able

be able to get in there just from a nine to five, right? And I can just do some simple math that explains this. Like let's imagine today you hit $1 million in wealth. So that's already a massive accomplishment in itself. But let's just say you hit a million dollars today. Let's assume you're saving $100,000 a year after tax. So you're making more than 200,000, right? Even with, you know, a 50% tax rate, there's no way you're saving everything, right? So you hit a million, you're saving 100K after tax, and let's just say you're earning 5% a year,

inflation adjusted return. How long does it take you to reach 10 million? The answer is 23 years. So even after you've climbed this financial mountain, you've made it to a million dollars, it still takes you 23 years to get to 10 million, right? Using this traditional save invest formula. Now,

What if you're like, well, Nick, what if I can save more? Let's say you can save $300,000 a year, which is a massive amount of money after tax. Even then with, you know, start with a million, save 300K a year, earn 5% on your money. It still takes you like 17 years to get there, right? So when you start doing the math, you start to realize like, oh my gosh, like I'm not going to do it through simple saving and investing unless you want to wait until like you're in your 80s. Like, yeah, you can get there. But for most people, like...

especially once you hit your 60s, you're going to want to retire. You're going to want to chill out, take your foot off the gas. You're not going to want to do that. And so the only people that generally make it into level five are those that had a business and sold it for a lot of money or owned a lot of equity in that business, or they joined a startup and had a small amount of equity in a business that got very, very big. Right. So that's generally what I see. And so that's why I think like level four is the no man's land of wealth building, because once you're in there, it's very difficult to

difficult to get out. Now, I'm not saying you need to get out. That's a whole separate discussion we can have. I don't think it's necessary at all. I think level four is great and most people would be better off not trying to get to level five. But if you are interested in that, this is kind of the math makes it pretty rough to get out though. Yeah, it

It reminds me of something I've said numerous times that one doesn't get super wealthy investing. You get super wealthy owning an investing firm or a hedge fund. And because, yeah, you have to have good returns. But if you're taking 20 percent of the profits, you can get wealthy fairly quickly as long as you don't lose money. Well, given that, what role, you mentioned the startups, selling a business, what role does luck play there?

moving up, let's say, from level four to level five or even moving down, good luck or bad luck, how does that impact the movement up or down the wealth ladder? Yeah, it's very interesting. I think it really depends on where you start. And so, for example, I'll start just quickly in like level one. In level one, like

bad luck is amplified in a way that it's not amplified in the rest of the wealth ladder. And what I mean by that is if you're in level one, you don't have a lot of financial resources. If something unfortunate happens to you, let's say, I don't know, your tire blows on your car, right? And if you don't have money to repair it,

you can't get to work, you could lose your job. You can see how just a simple, unfortunate event, you know, just an annoyance for someone in level four or level three could be life changing for someone in level one. Right. And so it's just in level one, like bad luck is just amplified in such a way that you have you don't really have any redundancy. You have no sense of security. Now, as you kind of move up the wealth ladder, I think it flips where luck is actually good luck is amplified. So instead of it's kind of

ironic that people with wealth kind of are more exposed to good luck. Now, what do I mean by that? You can buy a stock or you buy, you know, even an index fund, that index fund can grow and grow over time and your wealth kind of creates more wealth, right? So if you think about it, like even if you just buy an individual stock and it doubles, like you're exposed to that good luck when you have wealth and when you can buy, you know, certain assets, you have scale, you have some leverage, like all these different things that you have access to that people lower on the wealth ladder don't have access to. So it's a very kind of

cruel sense of irony that people lower on the wealth ladder are more exposed to bad luck and people higher on the wealth ladder are more exposed to what I would say good luck. So of course, bad luck can happen to anyone. I don't want to say there's no bad luck. Like the other issue as you go further up the wealth ladder, like for example, level five and level six, a lot of luck. I mean, luck's probably even more important there because getting the difference between the people in level five and level six is probably mostly luck. I would say I'm

Because if you can sell a business for, you know, 50 million bucks and you had, you know, you know, 20 percent of the equity. And so, you know, you had 10 million dollars after tax or whatever it is like you now made it into level five. But what would have stopped that business from being sold for 100 million or 200 million? You know, of course, there's a difference there in the entrepreneurial skill, but probably not as much as we think. And so there's luck.

There's what happened to your market, et cetera. So when you think about that, like you're probably over-concentrated in level five or level six. And so bad luck can impact your wealth probably a lot more than it would in, let's say, level four. So I think level four is the most insulated from both good and bad luck. It's kind of right there in the middle where it doesn't have the over-concentration risk as much. But at the same time, you know, you are benefiting from markets and things like that. So but it really depends how that wealth is comprised. So I hope that kind of gets a full answer. Yeah.

No, that makes sense. Yeah. Most of us probably know some people at level one. I know we have a family friend that we've helped out for years. And yeah, the tire blows. When there's no buffer at all, right? Or she recently fell off the bus with her walker and broke her glasses. There's just no protection. And I would think

The stress level of that is, it flows over into health outcomes because, you know, if you're always living on the edge, it's incredibly stressful. And it may be, I don't know if you looked at it, have you seen any data on health outcomes based on the different wealth ladders? So I haven't, I mean, because this is a new framework, so we don't have like this specific, like, hey, let's break it into these tiers. In general, health outcomes are worse, lower on the wealth ladder, just worse.

of those with less wealth, or they generally look at income, not wealth, but these are very, these are so correlated that they're almost the same thing. One thing that I do know though, which I did talk about in the book is as bad as wealth or income differences are, a lot of it is status too. So you could be, you know, low paid, but if you have like decent status in your community or something, you can still have much better health outcomes. And the analogy I give, it's not just money here that matters. Like

Imagine an investment bank, right? There are analysts and investment banks that are making probably three or four times more than the median American, yet their stress level and their status is very low in the sense of they're the bottom of the totem pole. So their relative status to their status hierarchy, I don't mean in terms of all, let's say, society. I mean, in their status hierarchy, the analyst is at the bottom of the totem pole, right? And so I think

You hear about, oh, these analysts dying in the shower or this happening or that happening. It's very unfortunate. But that goes to show it's not just money that impacts health, right? It's really like, how's your status? What is the environment like you're working in? That's probably a little bit more important. Money definitely matters, but I would look more at status, I think. I think there's just a little bit more data there. So in terms of technology,

to answer your question. So what are some of the liabilities we should protect against so we don't fall down the wealth ladder? Yeah, once again, I think it really depends where you are. I think, you know, once again, level one's bad luck. So that means, you know, having an emergency fund, relying on your network where you need to. That's how you kind of get beyond level one to start getting into level two and counteracting any sort of financial catastrophes. Once you're in level...

three to four, I think the big liability there is actually overspending in some ways. And because level three, which I would call the just real quick, a quick aside in terms of the percentages in each wealth level, like level one, that's 20% of US households. That's less than $10,000.

Level two, which is also another roughly 20% of US households, that's $10,000 to $100,000. Level three, that's your middle class, $100K to $1 million. That's about 40% of the US. Level four, which is, you know, one to 10 million, that's like 18% of the US. And then level five and six, which is just to say over 10 million is the top 2%. So basically like 98% of the households are in levels one to four with the vast majority in level three.

And then the top 2% is, you know, level five and level six. And level six is so rare. There's only 10,000 like US households. I think it's 10,000 individuals in the US with over 100 million. So these individuals are incredibly rare. But in terms of thinking about like liabilities as you kind of go up the ladder, like I think because level three is like the middle class, level four is like upper middle class. I think they're very similar in a lot of ways. They just maybe have a difference in like

They try and spend more to have more status. So like, for example, if you're in level three or level four, you're on the same airplane. Like I promise you that you're not flying private in level four. Maybe you do. Maybe you write if you got to write 10 million, maybe you fly a really cheap private plane once a year. You could do that. But like, that's not something you're regularly doing. So you're on the same airplane. You're probably shopping at similar grocery stores. You're living in probably adjacent neighborhoods. Maybe level four is slightly nicer home, you know, but because they're so similar, I think the thing and I saw this in the data.

The households that stay in level three, the difference between them and the households that go from level three to level four, income is a piece of it, but spending was probably a bigger portion. Like those, the households that went from three to four had a higher income than those that stayed in three. But in terms of spending, they spent almost the same. So the households that stayed in level three spent the same as the households that eventually made it to level four. But, you know,

they had much less income. So it goes to show that there's some sort of keeping up with the Joneses in the middle to upper middle class that goes on. And I think that holds them back. And then lastly, level five to six, the liabilities to protect against just get more numerous, right? As the phrase goes, more money, more problems. But I really think it starts to show up because, you know, if someone knows you have money, they can be lawsuits. You know, you think about divorces and divorces are terrible emotionally for everybody, but

The absolute cost just keeps growing in each wealth level, right? Like literally goes 10 up. The cost of divorce goes up 10x with every level, right? So you start to think about those and the liabilities just get larger and larger as you go further up the wealth ladder. So something to consider. Before we continue, let me pause and share some words from this week's sponsors. As a small business owner, you don't have the luxury of clocking out early. Your business is on your mind 24-7. So when you're hiring, you need a partner that works just as hard as you do.

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What surprised you in writing the book? So this is your second book, correct? Yes. Did you find this one harder to write or easier now that, well, I'm going to say easier, but was it easier and what surprised you? So yes and no. So the reason why it was easier was because I had written a book before. So I kind of know the process. It was harder in the sense that my first book, Just Keep Buying, was, you know, 70% of that book was my blog. I have a blog I've been writing for, it'll be nine years now, but

When I wrote that, you know, 70% of that was blog posts, right? It was other material that I'd already written. I kind of just had to polish it a little bit and put it into a good structure. And it did fine and everything because, you know, I was like, hey, not everyone reads blogs, so at least they'll read this. With the Wealth Ladder, I had written one blog post about this idea, you know, back in 2019. The post was okay. You know, it was a quick, you know, hey, here's an idea. It

did really well. And I was like, hey, there's something here and I need to do a lot more research and really think this through. Right. A blog post I spend five to 10 hours on, if that, you know, a book you need to really spend more time. So five years ago in 2019, I put this together and then I said, you know what, I'm just going to start collecting stuff, collecting. And eventually I built it out into the framework that it became. So in that sense, you know, I would say 20 to 25 percent of the wealth ladder is like blog material or something I was seeing before, you know,

And that means that 75% of it is new. Even my readers that read me all the time, they're going to find mostly new stuff in this book. And so that's the thing that I'm kind of, that made it harder, I guess, because I had to come up with a lot of new material and not release it. And I'm very like, oh, I want to write about this. I want to talk about this. I'm like, no, I have to keep quiet until the book's out. So that's what I've been doing. And so I'm very excited to just chat about all these other things I found while doing research for this. With Ritholtz.

It seems that you and some of the other principals, you know, you're unique in that you have blogs, you're writing books, podcasts. How do you handle that from a regulatory standpoint? Is that all sort of all out of business activity or is everything having to be run through compliance all the time as a registered investment advisor? So we don't have to run every single thing by compliance. I think it's

so far, it's been a very like, you know, if you're unsure, ask. And so there have been times where before I publish something like personal or something, I will ask one of the other partners like, hey, is there an issue with this? Right. Is there an issue with that? And I would just throw it to them and they would say, yes, maybe do this or don't or whatever. Most of the time they've been very supportive and said, no, this is good or, you know, but for the most part, we don't we have compliance review it after the fact. Right. And so if there's an issue, it'll come up to us. But I have yet

to had an issue, had anything raised to me because we're just writing about financial topics. We never recommend tickers or anything like that. I'm very, I don't really talk about asset allocation that much because I don't want anything to come across as a recommendation, right? You know, without knowing more about you, it's really, it's really hard to be like, oh, just buy this ticker, just buy the S&P. You know, I

I don't want to say that because you don't know anything about someone. I think it's really misguided. So yeah, I think for the most part, it's just been like a gradual process that we've kind of we've learned to work with. But yeah, compliance reviews, everything after the fact, that's not the issue. It's more of just like allowing us to do our thing. And we're we're still very tight knit. There's not that many creators at the firm, you know, relative to a normal IRA. There's a lot. But, you know, it's like five or six people basically that are that are putting out content. And we have to make sure we're just doing the right thing. And how many investment professionals are there now?

We probably have, I think, 25 to 27 advisors now at this point, and only a few of them do content. So the vast majority of them are not doing content, but they will come on as guests to do like guest content on podcasts and things like that. But they're not like full-time writers or full-time podcasters. Right. So the vast majority of the firm is, you know, just advising clients, right? Right. So you wrote a blog for nine years. Do you feel like you did a good job training AI in that, you know, AI...

And how has AI impacted your blog and SEO and things like that? Just a little inside baseball would be interesting. Yeah. So it's very interesting because, you know, when I when when, you know, chat first chat GBT first dropped, I remember like looking, oh, do you know about just keep buying it? It didn't know anything. Right. Because I, you know, my book's not that popular in the grand scheme of things, you know, but now it does because now it's like it's basically consumed everything. So it's heard about me. I could write my like, oh, that's kind of cool.

And so I actually think it's really cool. I see how people like, oh, well, they're going to steal your content and then someone's going to ask a question and then they're just going to use that without really citing you or something. I think these systems are getting better at providing citations and things like that, which I actually like. And so that's kind of links back and whatnot. In terms of SEO, yeah, if you write an article, like it's almost unless you have a differentiated opinion, it's almost a waste of time to put out an article on like anything that you could Google. Like it's just

Because the, you know, the AI is going to do it better for, you know, 90% of writers. And then the other 10% are going to be the ones that actually have a differentiated opinion. So for me now, it's like all of my blog posts have to be somewhat unique or differentiated or something personal that only I could write that the AI couldn't write. Otherwise, I won't put it out. That's another thing I'm thinking of right now. One last thing I will say on this is AI can still do a lot of stuff, but almost all my SEO comes from these like

investment calculators I built. So I have this one that just uses the Robert Shiller S&P 500 data, and you can calculate the return, like the inflation adjusted with or without dividends going all the way back to like 1871. Now, of course, you know, how accurate is that data? We can debate that. But either way, it takes the data. I can be like, OK, what was the return from this time to this time? And I also have a DCA one where like if I bought if I put one hundred dollars a month into U.S. stocks from this date to this date, like what would it

have turned into. Right. And so I have all these calculators. I can't do that like yet. I think it will eventually, but it can't do those calculations yet because it's just if I just asked it to do it, it has to know all these assumptions about dividends and it doesn't know where to find the data. And because of all of that, that's still an edge I have for now. I think eventually it will get there. But, you know, I update that thing every month and that's like half my traffic is my calculators because you can't get it

through an AI, which is the nice part. So... No, we've seen the same thing with our SaaS product asset camp that we, because we found, you know, the index providers lock up all their data. So if you sign a licensing agreement, then you can build all kinds of cool stuff within it, which we have. But my biggest fear is MSCI or S&P or somebody signs an agreement with OpenAI and suddenly you can get historical PE and averages and standard deviations going back. Until then. So exactly. Yeah.

So what, how do you think about AI or maybe other things that could dramatically change the wealth ladder and movement up or down? Yeah.

Yeah. So this is something that's, I think, being very discussed right now. So like I'm on Twitter a lot. And I think the big argument being put forth is like you have three to five years to get as much money as you can. And then you're going to be obsolete as human. I think it's going to be slower than that. I don't think I think that's a little too bullish for AI. Trust me, I'm bullish on AI, but I'm not so bullish that I'm like, oh, my gosh, everyone's going to become obsolete tomorrow. Like it's just people move so slow. There's still so many businesses in this country that are run with with pencil and paper.

And you're saying, what are you kidding me? We have computers. We have Microsoft Excel. We have these businesses are going to do this leapfrog. They're going to jump to AI at some point, but it's like they're going to jump over the computer age. Right. It's a very weird thing to imagine. It's like how Africa has more cell phones than landlines. They just leapfrogged, you know. And so I think the same thing is going to happen in the sense that it just takes longer than people think. Right. That's one piece of it. In terms of what I talk about, in terms of how to raise your income, one of the things I do recommend, which I think

Most of Twitter would disagree with is like learning how to program or getting technical. If that's something that you have some aptitude in, I still believe it's going to be a valuable skill in the future because at the end of the day, like people like, oh, just use no code. It's going to get so good that we'll never need programmers ever again. I just don't believe that. I think there are too many.

at least what I've seen so far, it is getting better. I see it getting better, but it still makes the weirdest errors. It's like an absolute genius. That's also like a complete idiot at times. Like, why would you do that? That's obviously wrong. Or like, it just hallucinates stuff. And it's hard to describe to somebody. And if anyone who's used AI on here, you'll know what I'm talking about. Like, what the heck? How did it make that type of error?

But then at the same time, it like catches these things I never would have caught. And so I'm less worried about it for like the future of humanity. I think these things will be used for to create other jobs or create other types of things. And there will be solutions that are found for the time being. I still think there's going to be like certain skills are always going to be valuable, like sales. Can you sell something like I promise you robots are not going to be selling to people and

it's not going to work as well as a human. I just, I can't, especially on large purchases, right? If you're going to see a house, you're not going to go there with a robot realtor. I just can't imagine that. Maybe that will happen. Maybe I'm wrong, but I just can't imagine it happening. So yeah, sales, technical skills, I think credentialism is still going to matter. Like lawyers and doctors are going to find a way to create them. They already have a moat in the United States. They're going to try and keep that moat because I mean, they're highly paid. I mean, why is it that a US doctor makes multiples? Like

three to four X more than a UK doctor. It's because of credentialism and the whole system's built that way. And I'm nothing against that. Like that's fine and all, but that is what it is. And so we should accept that's just how the world is here in the United States. And I don't think AI is going to disrupt that as quickly as people think, because there's a lot of money and a lot of smart people there that would prevent something like that. Well, yeah. Well, it's not even the professions. I know our daughter was looking at what does it take to be a tile layer, right?

Well, it takes four years as an apprentice, right? And I'm sure you're learning stuff, but I suspect there's an element of credentialism in that. But I agree with you with AI. When we use it, I'd be interested to see how you're using it in your business. But generally, it's most helpful if you already know something so you know when...

I use it more as a companion, right? We have these discussions about investing or things like that, but I would never trust it without verifying. And I think, you know, some of the data suggests that even, you know, the O3 model by, you know, open AI, they fall apart when things get more complex, which I guess is the benefit of humans. How are you using in your work or, you know, professionally or individually? What have you found most helpful?

So what I use it for in my, my writing is, is literally like basic grammar. Cause there's certain things that I like, should there be a comma in this sense? Or is this better with or without a comma? Like I did not use any AI to write the well flatter, like all the core ideas, like none of it. I didn't use a single sentence in there. However,

There are commas in there that I can say, hey, I helped. Oh, should I add a comma here or should I not? And I wasn't suggesting it. Believe me, I wasn't suggesting it. Oh, no, no, not at all. Of course not. Of course not. But I'm just saying like, you know, that's the type of stuff from like, how should I kind of phrase this? Like, is this phrase better than that? And that's where I'm just in my head a little bit outside of that because I'm slightly not I'm not a perfectionist, but I'm just I'm closer to a perfectionist than not with my writing.

But outside of that, like at our firm, we don't use it. And the reason why is we're waiting to see what the SEC does, because I'm telling you, every single time there's a technology, the firms that rush in and use it and don't do something right, they get hit with an examination and then fines and whatnot. So we are like we do not.

use it for anything right now. We are waiting and seeing kind of how the SEC does things and how they've already started finding firms for using it and not realizing they're putting client information in there and they don't have it walled away or etc. So we're kind of on a wait and see approach. Yeah, we're on a wait and see approach. You know, of course, if our advisors use it, we have to sign attestation saying I do not put any

need personal information. I take a client name out or I don't put account numbers. I don't put anything in there if I'm trying to like help it have me draft an email or something, God forbid. And I don't even know like who's you. I really don't even know. I'm the COO and I should know who's who's doing that type of stuff. But, you know, for the most part, they all sign an attestation basically saying we don't use it for anything like that. So interesting. I hadn't really thought about that aspect for advisory firm. Back to the to to the wealth fighter. What?

other types of wealth, other than monetary wealth, are there and how should that influence our thinking? Yeah. So, Sahil Bloom came out with a book called The Five Types of Wealth. I enjoyed it. I actually helped collaborate on the financial wealth portion, right? He reached out to me. So, that's one of the five types. But the other four are social, time, mental, and physical wealth, right? These are the other four types of wealth. And so, I love this framework because it's just a way of like

hey, there's other types of things out there that matter in your life. And it's very easy to focus on the financial one because it's the easiest to measure, right? Like I can look at my bank balance right now and see a number. I can't...

Of course, you can say, well, I can check, you know, your VO2 max. There's all these different things you can look at in health and they're pretty good measures, but I can't easily look at I have to go get on a treadmill and run and have this whole thing administered. Like it's not like opening up, you know, my my bank account app right now. So that's one thing that I think makes financial wealth a little bit more, you know, people focus on it too much because it's easy to focus on. But in terms of thinking about those different types of wealth, I mean, the main thing I'm trying to kind of emphasize is how that how

across the wealth ladder, it changes, right? Like in level one and level two, like I think financial wealth is more important only because you don't have a lot of it and you need it for like some sense of security, right? But as you know, thinking about someone in level one, like most of their problems are probably money problems, right? If they had more money, they would, a lot of their life issues would be solved. But as you go up the wealth ladder, like you have fewer and fewer money problems. And now all of your problems are things you can't buy with money, right? Like if you're in level five, you can't be like, okay, I'm just going to

write a check to my child to make them love me. Like that doesn't work, right? You can't, you know, you can't buy a new cardiovascular system right now, at least not yet, maybe one day with AI and they build new ones, who knows. But for the time being, all those other types of wealth become amplified, right? As I talked about amplification across the wealth ladder, like I say, oh, in level one, like bad luck is amplified, right? Well, by the time you get to level five and six, like it's all the non-financial types of wealth that are amplified, right? Like

Your relationships, relationships are important no matter what your wealth level, but like they become even more important as you move up the ladder because money can't influence them. You can't, there's nothing you can do with money that's going to truly make someone love you or care for you, et cetera, right? And so as you realize that, I think the, what, why I still wrote about level five and six in the book, even though very few people

individuals will ever get there because I want to emphasize all the other parts, you know, of your life outside of your finances and why those things are important. And so I'm trying to wake people up like, hey, once you get to this level, like you should be spending almost all your time on your health, your relationships, like all those types of things, because those are more important than just trying to add another, you know, few million dollars to your bank, right? Or your bank account. So, yeah, that's what I would say about, you know, thinking about the changes over the wealth ladder. All right.

Or even spend most of our time on those things, even at the lower rungs, right? Because who wants to be a level five? And that's not the time to start working on relationships if you've burned all the relationships on their way up.

Well, Nick, this has been delightful. Very helpful. Is there anything that you want to touch on before we close that we think would be important? Obviously, the book comes out, I believe, July 22nd. Yeah. So I encourage everyone to buy it and read it. Yeah, it's available for pre-order. What else do you want to share to close? That's it. Thank you for your time. I appreciate it. Last thing I'll say is if you have any questions, whether about

An old book, a new book, a post, whatever. Feel free to DM me. I'm on Twitter under at dollars and data. I'm on Instagram at Nick Majuli. I'm on LinkedIn at Nick Majuli. So I answer every DM. So feel free to send me any, if you have any questions about anything, happy to chat. Super. Nick, thank you very much. Thanks so much, David. Appreciate it. That's our conversation with Nick.

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