5 Levels of Wealth AND How to Achieve Them! (2024 Edition)
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- เผยแพร่เมื่อ 21 ก.ย. 2024
- We believe there are five distinct levels of wealth, but they aren’t solely dependent on income or net worth. We’ll walk you through each of the five levels - including how to know where you are at, how to advance to the next level, and signs you are doing it right.
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Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.
1:45 Level One (Stability)
8:14 Level Two (Strategy)
15:19 Level Three (Security)
25:11 Level Four (Freedom)
36:15 Level Five (Abundance)
Please I am begging for chapter segments in videos in 2024
Brian shouting at the beginning: check.
Bo being excited: check.
Money is not the aim but a tool to get to a state. My goal is freedom, not amassing a ton of money. As soon as I have enough to be free I retired. I have no debt but fixed and necessary expenses and my elderly mother. We live on $20k a year and save $20k a year. I have a chunk in retirement savings that I don’t need to touch until inflation or expenditure exceeds my monthly income. 18 months into retirement I finally settle into a state of needing nothing (shopping used to be a vice and a big expense). I cook, do craft, sing with ppl, swim. I feel free and blessed.
You could invest in stocks, start a side business, or focus on advancing your career. It's important to set goals and make a plan. Remember, wealth can mean different things to different people,One thing i can say that helped me in life to reach my first million was starting early, i got curious and informed i became open to passive income, investments in equities , etfs and the likes. also sought help to handle my portfolio which was my foundation. i'm ever grateful to Dianne Sarah Olson my FA.
That’s some good values. sounds like you got something going for you
I looked up Dianne Sarah Olson on the internet out of curiosity; she has a strong résumé
Did a quick search and found her webpage. I must say her resume is pretty impressive.. will be writing her too
Does she take clients in the UK?
Brian and crew, thank you!!! I am late to the party, just turned 50, but I found you guys 4 years ago and your content has changed my family’s life and future. Thank you for being real and being so positive!
Congrats to you and your family! I'm also late to learn about finance so I always appreciate when financial gurus talk about less than ideal scenarios. Those of us who missed out on early career wealth building really benefit from some hope, too!
I had 2 goals since childhood, Get a black Belt and own my house outright. Did both 2 weeks apart in '15. The bank had the new person do the process of paying off our loan, 'because she would never see it again' Both were a lot of work, but damn amazing.
Oh shit what martial art did you get your belt in? BJJ?
I appreciate the focus on "abundance". I think you nailed it. "What is better than having that sparkling new jet boat? Not wanting it, basically living in peace, freedom and happiness". I have the opportunity to make a lot more money than I currently make, however it would cost me the freedom of doing what I want. There is nothing better than not having to work and being able to go fishing, skiing, hiking or whatever you like doing.
Reached our FI last year and really happy with our life. Very content and looking forward to sign off our careers and start our next adventures. Glad both of us don’t feel the need to keep up with Jones. We have a lovely and comfortable home, travel to any places we would like to in comfortable manner. Enjoying good food and good company. Life is a bless. It took us 20 years to build it, it’s all worth it. I am the one manages our finance & never had issue to spend money. Since I am responsible for planning and executing our FI, I adopted dropping what we need to safe in investment account, then we can spend rest guilt free, it worked well for us. Know yourself and find a solution to help you achieve your goal, stay the course, we will get there.
I grew up with the “saver” mentality and unfortunately, though I was great at saving into adulthood, I was never educated about investing. It’s far easier for me to correct this (start investing) than someone who doesn’t have the saver mentality, but it’s frustrating to know that I’ve missed out on a lot of money due to ignorance.
Same!!! I feel your pain, I did not find The Money Guy soon enough
Cost me a fortune in future gains. Had the cash, but just didn't do anything with it for years. Best time to start is yesterday, the second best is today.
Me too, wish I figured this all out a decade earlier than I did
"Automatic for the People"
🎶Shiny Happy Investors🎶
I like this approach to thinking about wealth. For me, abundance is more of a mindset that can parallel any of the levels. The highest level for me is Legacy - being able to pass on part of my resources to the next generation.
I'm in the group that saves everything left over after expenses, rather than budgeting and "paying myself first". Apparently, I'm an outlier here, because it works really really well for me. Most years, my husband and I save around 50% of our household gross income. I'm paying off my house this year (at 45 - my last debt of any kind), and savings rate will go even higher going forward.
Generally easier to do it that way for people who: 1) Make a lot of money. 2) Don’t like spending a lot of money.
Intuitive budgeting is a lot like intuitive dieting. It works if you don’t like eating junk food.
@@epicvids9557 I love that analogy.
The anti-budget is the way to go. Set everything on auto-pay, including all of the investments (max 'em out) and spend whatever as desired. When/if the cash stockpile gets too big you can do some additional stock purchases or throw money at the mortgage if you have one.
Easy.
@@Mactakun Our household income has never broken 6 figures. A lot of years, we only made $50k - $60k, gross. We're both just pretty frugal people. So not 1, but yes 2, for us. But I do agree in general, if you can make a lot and just spend a little, the details tend to work themselves out.
The show is absolutely wonderful ; it is very inspiring.
Instead of “boiling point”, Brian should just say, “escape velocity” instead like he did in the last show. lol. Love the terminology guys!
Wow great show. Wish I had this guidance in my 20s. I never had a budget, never had 6 months safety net but put all the building blocks down, most importantly “pay yourself first”. Today at level 4 with net worth of 3M but still feel empty. Need to work on level 5. Thanks for great advice.
You're at 3M brokie? That too bu building blocks?
I just want to thank you for putting a positive spin on finance, especially for those older than our 40s and beyond. Lots of people shows put on too many scare tactics and want us to embrace the fear. There's an element of that, alright, but thinking positively has a better long-term effect, imo.
I work in senior living and see a lot of people’s assets/income in their retirement age. Most people fall into 1 of 2 camps (generally). They either have well over $1-2 million and are able to get the nice apartments and not stress about the money conversation, or they have at best $200k (many are much lower than that) and have to stress about what happens if they run through their assets.
It’s crazy to think that these two people likely just made different decisions in their younger days and it compounded into a huge difference.
Thanks for the shoutout, guys! Love the ep 🙏
Omg! It's two sides of FI! Love your podcast!
@@chelsea2690 Thanks! 🙏
It's instructional to hear you talk about abundance. Regrettably, in our late seventies our buns don't dance any more. A stately waltz is about the best we can do!
Was reading the other day that a net worth of 1.2 million would put you in the top 10% in the u.s. Follow the foo and you'll be there. Imagine that.
Is that household net worth or individual?
@@justthebrttrk That's household and the figure is a bit misleading. A very good portion if not major portion of that is tied up in their home which may or may not be a liability later in life. Depending where you live, $1.2mil isn't much unless you move somewhere cheaper for retirement.
@@justthebrttrk This question always gets asked. It's household. Doesn't matter if you have separate finances or not, which is why this question is normally asked. Your household needs are combined and your expenses will be less than if you were not living together. This is why networth is always done with household. It's also one of the reasons separate finances doesn't make the most sense. To know where you wnat to get to, you need to know where you are. Keeping everything separate, disconnects the spouses from both where you are now and the steps you are taking to get to where you want to be. Taking steps together will get you to your goals the most efficiently. Religion doesn't have to have an impact on this, it's just the most efficient. We did separate accounts before being married (9yrs), but did all our debt payoff planning and large purchases together and still carried that over to when we got married. Still have separate accounts, but I just manage everything so she can have time to worry about other important stuff such as household and vacation planning.
If you follow the 4% rule a 1m retirement gets you $3250 a month and part of that may be taxed. It’s not looking pretty for a household. I spend that by myself in a month and I’m young and single.
If you want a 3% withdrawal it gets even worse as 1m gets $2500 per month.
Retirement really is a luxury of the rich and becoming rich in this context is a continuous decision over time.
If you have enough invested where you don't have to touch your principle and put the funds in a trust imagin what your grandkids will have access to when they are middle age
The stage of abundance is such an interesting topic. I would love to see a video done entirely on abundance.
Excellent video!!! I'll be sitting my parents down and rewatching it with them 🔥🔥🔥
This one’s for Rebe, ever heard of Sofía Macias? Author of the financial education book Pequeño Cerdo Capitalista, which is a huuuge and famous book made to help people understand personal finances, her book is a hit in many Latin countries, thought maybe Brian might find it interesting.
Hi from Mexico, love the show and been listening/ watching for 2 years now.
It is easier than it was before thanks to youtube videos and ease of buying stocks. No need to save up thousands and walk into Fidelity. That said, still not enough people are investing and learning to invest. My kids have no interest, so I have to do it for them. I can't let them lose time just because they have no interest in it.
I double anything my kids want to put in their brokerage account. That got them interested, it is easy money for them, and I am establishing a habit of investing. It worked so well I had to put a monthly cap on their deposits. I will do it until they are 18.
The team should play the sound of a bowling strike when the guys talk about the boiling point. 😇
🤣🤣🤣
Great video and information as always! I am also in the financial services industry and always recommend people to watch your videos. Keep up the great work team!
Fabulous video. It truly is a mindset. I’m all about limiting liabilities. I love fancy cars but don’t agree with owning one. I went on vacation and rented a Ferrari for the weekend. It cost $3,000. Incredible experience. Top down, driving along the ocean. When I was done I handed it back. No more expenses. Next year I might rent a Rolls Royce.
I tune in every week for the off chance Bo is only kind of excited about the show 😂
Can we get a T-shirt that says “building wealth is simple” on the front and then on the back it says “… Not easy”?
I was waiting for FOREVER for this!!!
Send your pay to a different (brokerage or savings) account. Set up a regular automatic transfer of a limited, planned amount to your checking account. This way bonuses and raises do not end up in your checking account. Definitely use a brokerage account once you have sufficient "savings." Then you can fund an IRA (and spousal IRA), and invest the rest in your brokerage account.
Great show. We’ve been doing well but this makes me realize we should be doing much more, glad I found you guys
Bo doing the Rick Moranis line from Spaceballs was great😂
Hi Money Guys.
My wife and I are 35. We live in Colorado Springs. We both make over 6 figures. We have a home with 200k left on the loan. The home is valued around 400k. We have 120k in a brokerage, 6 figures in our 401k, and 100k in a liquid high yield savings account. Just curious where you think we land?
Brian’s book is on the wall🎉
Coast FI is probably a good definitive measure of Financial Security
Too many people LOOK rich while being upside down in DEBT! Thank you guys for the channel and sound money advice.
Almost like cultivating the abundance mindset now makes the other steps easier to get through psychologically
Can Bo say any other word besides “excited” to start an episode it’s starting to drive me crazy.
No way will I pay off my house until I sell it. Period. 2.625% interest. Every dime I could use to pay it off is invested. I do plan to sell and downsize to no debt after I stop working
Ok. And that’s fine. And if someone is ahead on saving for other priorities and paying down a mortgage early brings them happiness….thats fine too.
@@kylen6430 Paying off a mortgage early has a cost
- If you have tax-advantaged ways to invest you are forgoing to pay off a mortgage early
- Thus you are still working for earned income
- And if you would benefit from the home loan interest deduction
- And if your mortgage interest rate is low enough
- And you have no PMI payments
Then paying off such a mortgage early will cause you to work longer.
I am not willing to give up those years. Sure its a choice, but the choices are not equal. But as soon as you no longer have earned income, the choice is less clear though still with a tilt towards not paying a low interest mortgage off early. The reason why I specifically will pay off my mortgage when I retire is because I will sell it and downsize. Downsizing is the beneficial event, not paying off early.
@@kylen6430 Adding an extra detail: I am well ahead of the curve, and nearing retirement now between 55-57 years old. The extra tax advantaged investing I am doing now is an "After-Tax 401k In-Plan Roth Conversion" account. I save pre-tax $30k, then can put up to a total of $46,500 more minus the match from my company. Then its automatically converted to an in-plan Roth 401k account (taxes were already paid). That gives me a considerably larger Roth investment each year well beyond the standard $8000 to a Roth IRA which I also max (and HSA maxed too). Since I owe less than a 3rd of my home's current market value on my mortgage, I am not concerned about future price adjustments to the housing market prior to selling.
Everyone's details are different, but I have a hard time coming up with a scenario where someone has a 2.625% mortgage, are currently working, are not maxing every tax advantaged account, and have no PMI payments where paying off the mortgage early is not always worse than investing that money.
RE is Re Evaluate for me!
Thanks for the video, it will help me to refocus my mind for 2024
We always see data that shows very low individual 401k balances. Usually this data comes from a vanguard, or fidelity or maybe a CS…
Does this gloomy data account for people that have changed jobs several times or shifted savings focus between different accounts. For example I know several younger to middle aged professionals that have sizable total retirement but they never bothered consolidating and their money is spread out across multiple accounts.
Just wondering if our savings totals are really as low as some reports show.
I agree. There have been events in our lives that have caused us to roll our 401K balance into IRAs. Thus the data is seriously flawed and a “sky is falling”/chicken little situation
Never thought about it this way. Makes me feel better about that gloom and doom information.
Exactly right, they can’t really track multiple accounts, just what each person has at each one. Definitely skews it some because of that
Granted but… you can tell by American lifestyles that most elderly people don’t have much savings
I think it would give fruther insite and clarity what % do people contribute to their 401k.
Love these yearly vids. Great work, team!
I always loved their take on the 5 levels of wealth! Great stuff!
Recreationally Employed? Two Sides Of FI?
I'm thoroughly locked into the Saver's Trap at 10:00
“Automatic for the People” Any other REM fans out there?
"recreationally employed" shout-out Two Sides of FI.
Inspiring show guys, thank you!
Good job Brian on planning to pay off your house in March!
Loved this segment ❤❤
Love it. Thanks guys!
When you are figuring out your 25% do you include your 401k and hsa contributions into that 25% or calculate the savings rate off your gross or net income?
Yes include HSA and 401k, calculate based off gross income
I've never had a budget, actually. While most people's instinct is to see money as something fun to spend and therefore spend it all without a system, I find money painful to spend and naturally save as much as reasonable. If I made a budget that had "fun money" built in, I might actually spend more. Currently saving/investing 75% of take-home
Wow, that’s a high percentage.
VERY GOOD
Fantastic episode 🙏
Thanks guy's🔥🔥🔥💯
I have read many financial books and follow so many financial people. I think I have only disagreed with some of Brians attire.... Just teasing! Our family is on your order of operations. We are on 6 or so
Sounds like the money guy show listens to two sides of FI haha! Recreational employment is probably where ill end up too in my 50s
Love money guy pod cast but it makes me laugh EVERY VIDEO Bo starts with “I AM SO EXCITED”
I'm 30 and all my debts are 4.25% or under. I have 3.25k left on my vehicle, 2.9k on a 0% interest credit card, both i should have paid off in 4-5 months. The only debt I'd have is my mortgage. I have a 3 month (plan on 6 months after debts) emergency fund, 5 digits in investments and 6 digits in equity in my home. My question is, i want a luxury item that would be a reoccuring monthly charge on 300-400 a month, which falls into the 50 30 20 rule safely. Is it okay to be able to do this thing ive been always wanting to do once those debts are paid minus the mortgage?
These are very valuable rules for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession-- it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $89k now to put in the market.
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. I know someone who made over $500k in this recession influenced market, but to the best of my knowledge, it was through a financial advisor.
Please I'm very much interested. How can I get touch with this coach, i really want to give her a try.
I really don't like making such recommendations, because everybody's situation is unique. But there are many freelance wealth managers you could check out. I have been working with “Carol Vivian Constable” for about four years now, and she's really, really good. If she meets your discretion, then you could go ahead with her. I endorse her.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
When you “bowl” a pot of water, lol Bo laughing in the background
valuable content . thank you
I'd say that the first level/step is the hardest. Its sort of like how your first million is by far the hardest and it gets easier after that. Probably the reason why most people don't make it beyond that first level.
I am afraid of the future.
The deficit is outrageous and the only way of bringing it down is taxes.
What can we do to prepare for a possible bleak retirement future.
ABB baby! 14:30 😂
I just keep the bib on through January
Great to hear you’re paying off that mortgage 👍🏻 👍🏻
When I was single in my 20s I just was raised to not spend much money, never had a budget, at that age I think it's fine to do that. I was unintentionally saving like 50% of my income. I paid off my student loans and I ended up deciding to start investing during the covid crash so I got pretty lucky with that.
What tablet does Brian use?
I invest in my Roth IRA daily super dollar cost averaging…. 🎉🎉🎉 Thank you money guys
Are those cigar city hazy IPA’s in those can coozies?
My cousin's next-door neighbor's best friend's wife's husband's uncle's brother is actually a financial advisor.
❤❤❤😊
Never been this early! Thanks for all you guys do- can't wait to read the book Brian!
Partially funding kids future expenses by just doing $20 every paycheck will turn to iver 10k over 18-24 years
RE=Recreational Employment came from the "Go With Less" TH-cam channel. Love it!
I would like to know what episode Bo is NOT excited for
❤❤❤❤
I dont understand abundance stage ... sounds like financial independence.
Overall, the fixed annuity can be the best vehicle for retired seniors. What do you think?
Nope. Nothing wrong with a part of your overall being in an annuity, however there is no wiggle room with one. Say for arguments sake, you put 100% of your liquid wealth into a fixed annuity 5 years ago. It was fine when inflation was low, however food has gone up 254% and heating oil around 70%, so do you thing that t a fixed income wasn't affected by that??
Also, if the company goes out of business, you lose it all.
@@grega2362Don’t think any advisor will suggest to annuitize your whole portfolio, think just enough to cover your essential along with your SS.
@@JTStreamDoesn’t annuity in US has insurance? In Canada, annuity up to $5000/month is insured. So it’s very secure, just like your GIC up to $100K/account in each bank.
@@freedomlife3623 That may be. It is good to make sure what is the law and guarantee in one's own country before committing to one.
Let me guess... Bo is so excited about this
Just for some balance. A wise man lays up for his children’s children. But also our life does not consist of the things that we possess. Jesus Christ came that we might life and have it abundantly. In Christ alone will we truly find the satisfaction and peace we’re looking for. Happy investing everyone!
Take your meds.
Sorry you’re offended. God bless!
MILLIONAIRE EDUCATION STATISTICS
88% of surveyed millionaires graduated from college.
In contrast, 33% of the general U.S. adult population has graduated from college.
62% of surveyed millionaires graduated from public or state schools.
Just 8% said they attended “prestigious” private schools.
52% of surveyed millionaires earned a master’s degree or higher.
This is far more than the 12% of the general U.S. adult population that has earned above an undergraduate degree.
This should be broken down by college degree(s) earned. Not all are equivalent and just "a college degree" is only useful for board games.
Also, I'm a bit skeptical of "millionaire" surveys after the recent huge home value appreciation. Having a million dollar home is very different from having a million dollars in investable assets.
The great JL Collins has a degree in English Literature from University of Illinois. Given that nearly 9/10 millionaires have college degrees and only about 1 in 10 don't, I think the narrative about college needs to evolve a little past the simple value proposition that is sooo popular these days.
@@Sylvan_dB
My biggest stumbling block is that I hate working; being dependable, productive, and having human interaction are deplorable to me.
I only have mortgage debt and a non-working income stream that will cover my expenses, but there is no room for anything other than survival solely using that source.
And I actually thought that everybody is at the stability level. This is pretty sad actually
What's the deal when you creep into the top 10% yet you don't feel like you are in the top 10%? Because if the top 10% is $1.2m net worth, who are those other guys buying new cars, living in million dollar homes and taking vacations for 10s of thousands and how do they stay afloat? I'm asking because you can't with a $1.2m net worth.
They are in debt. They will live high as long as they can keep up with the monthly bill and work until they are 70. I get where you are coming from also.
I am asking the same question as we do have few millions, but feel poor going about town among all the luxury cars & people in high end attires.
Can you pay off the rest of the mortgage on a live show? 😁
Hmm. I just save what's left over at the end of every month. No budgeting or anything like that. Together with my wife, we make 11-12k per month and always have 8-10k left over. I don't feel like we make the most amazing income. We both have associates degrees and do home health physical therapy. I guess saving just comes naturally to us, and it doesn't for most people.
A lot of people make a lot less, 40k, 20k household income per year, and they don't starve. I have patients who live off less than $1000 per month, and they get by too.
So if you can make something closer to or above median income and just live like the people do who make 20k or 40k per year, you'll have ridiculous surplus money every month. Like I don't even feel like I miss out on anything. I buy whatever I want for the most part. But I started out buying and being satisfied with a cheap home--180k 10 years ago, $1350 mortgage with taxes and insurance included. Then I always buy cheap cars. They're reliable, but right now I own a 2016 Corolla with 90k miles. I buy used, and I pay cash.
After getting those 2 major expenses under control, you can pretty much go crazy. I can't eat out enough at fancy restaurants to spend down an average $9k surplus monthly.
The only good way to use that extra money is to retire early. I've been saving like this since 2008. I'm going to quit full-time and work 1 quarter per year or just do PRN for the equivalent of working 10 hours per week this year. I'll be 41 or 42.
Anyone can do it if you have even average intelligence and income. It just takes discipline and the ability to see a plan through.
One of you talks at a normal, enjoyable pace. The other talks as fast as possible like it's a race to get the words out. I truly believe your videos would be much more enjoyable if you slowed down the pace. Constructive criticism; I'm not trying to sound like a jerk.
1) Go to settings ⚙️
2) Play back speed
3) click on 0.75x
Problem solved! ✅😉
Sorry, but my favorite time of year isnt 5 levels of wealth. Still enjoyed the video.
Pyramid? I think it’s closer to a ladder 🤔
It sounds like you could have a higher net worth at step 4 freedom, than step 5 abundance
My spouse was just laid off... now what do we do?
I'm assuming they should look for another job if their income is necessary
You rely on your emergency fund as needed until they find a new job.
Way too little information in your question to give any sort of useful answer.
Sorry to hear that. I hope your luck turns around for you
@@greenlantern1986you assume they have one?
This doesn't need an annual update does it?
Probably not but their goal is to reach more people so they need new videos to get pushed into users feed.
Money Guy show.. Shouldn't there be more Levels? You have Stability as not living paycheck to paycheck. Wouldn't that be a Level? Living paycheck to paycheck Level because there is also a state below that where people are spending more than they make.
They’ve called not doing the bare basics “level 0” in past episodes. IMO there’s really nothing to consider “wealth” if someone is in a bunch of credit card debt and/or can’t have anything left at the end of the month, so that not being a level of wealth makes sense to me.
played moderateDGE with the roll up 412 ,,,,,,,,,,,,,,,,,,,,,,,nice thnx i am ddp1
Some family deductibles for health insurance plans are $10,000. It’s not realistic to tell someone to save $10,000 before they can do anything else.
They’re trying to have you in the best possible situation. Therefore it’s best to have that on hand
If that’s a possible deductible you might have to pay then yes you should make sure that’s on hand
Deductible is different from max out of pocket
If you qualify, max out your HSA every year. This way you save your deductible on autopilot, it's tax advantaged, and it comes out of your paycheck regularly without thinking. Yes, it's a sacrifice on take home pay but it's worth it to know we're protected from medical debt.
If you have a family plan, then that means you have a family, in which case I'd argue it's even more important that you have some amount of money to fall back on before you start investing. Yeah, $10,000 can be very hard to scrape together if you've never done it before. But it's going to be far harder to scrape together after you have been forced to borrow $10,000 because you had no other option.