{"id":284116,"date":"2025-07-23T02:59:10","date_gmt":"2025-07-23T02:59:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/284116\/"},"modified":"2025-07-23T02:59:10","modified_gmt":"2025-07-23T02:59:10","slug":"nick-maggiulli-climbing-the-wealth-ladder","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/284116\/","title":{"rendered":"Nick Maggiulli: Climbing the Wealth Ladder"},"content":{"rendered":"

Listen Now:<\/a> Listen and subscribe to Morningstar\u2019s The Long View from your mobile device: Apple Podcasts<\/a> | Spotify<\/a><\/p>\n

Today on the podcast we welcome back Nick Maggiulli. He\u2019s the author of a new book called The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life. His first book was called Just Keep Buying. In addition, Nick writes a wonderful blog called Of Dollars and Data, which is focused on the intersection between data and personal finance. In his day job, Nick is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management. He received his bachelor\u2019s degree in economics from Stanford University. Nick, welcome back to The Long View.<\/p>\n

Background<\/p>\n

Bio<\/a><\/p>\n

Of Dollars and Data<\/a><\/p>\n

The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life<\/a><\/p>\n

Just Keep Buying: Proven Ways to Save Money and Build Your Wealth<\/a><\/p>\n

Topics Discussed<\/p>\n

\u201cHow to Make More Without Working More<\/a>,\u201d by Nick Maggiulli, ofdollarsanddata.com, July 7, 2025.<\/p>\n

\u201cHow Much House Is Too Much?<\/a>\u201d by Nick Maggiulli, ofdollarsanddata.com, Oct. 22, 2024.<\/p>\n

\u201cRich vs Wealthy: Summarizing the Differences<\/a>,\u201d by Nick Maggiulli, ofdollarsanddata.com, April 18, 2023.<\/p>\n

\u201cWhat Is Liquid Net Worth? [And Why It\u2019s So Important]<\/a>,\u201d by Nick Maggiulli, ofdollarsanddata.com, Dec. 5, 2023.<\/p>\n

\u201cDo You Need Alternatives to Get Rich?<\/a>\u201d by Nick Maggiulli, ofdollarsanddata.com, May 28, 2024.<\/p>\n

\u201cConcentration Is Not Your Friend<\/a>,\u201d by Nick Maggiulli, ofdollarsanddata.com, March 14, 2023.<\/p>\n

Other<\/p>\n

\u201cNick Maggiulli: \u2018The Biggest Lie in Personal Finance,\u2019<\/a>\u201d The Long View, Morningstar.com, April 12, 2022.<\/p>\n

Federal Reserve Survey of Consumer Finances<\/a><\/p>\n

\u201cHigh Income Improves Evaluation of Life But Not Emotional Well-Being<\/a>,\u201d by Daniel Kahneman and Angus Deaton, Princeton.edu, Aug. 4, 2010.<\/p>\n

\u201cExperienced Well-Being Rises With Income, Even Above $75,000 Per Year<\/a>,\u201d by Matthew Killingsworth, pnas.org, Nov. 14, 2020.<\/p>\n

\u201cIncome and Emotional Well-Being: A Conflict Resolved<\/a>,\u201d by Matthew Killingsworth, Daniel Kahneman, and Barbara Mellers, pnas.org, Nov. 29, 2022.<\/p>\n

Of Dollars and Data Popular Posts<\/a><\/p>\n

\u201cEven God Couldn\u2019t Beat Dollar-Cost Averaging<\/a>,\u201d by Nick Maggiulli, ofdollarsanddata.com, Feb. 5, 2019.<\/p>\n

Get Good With Money<\/a>, by Tiffany Aliche<\/p>\n

The Millionaire Fastlane<\/a>, by MJ DeMarco<\/p>\n

The Intelligent Asset Allocator<\/a>, by William Bernstein<\/p>\n

How to Retire<\/a>, by Christine Benz<\/p>\n

Transcript<\/p>\n

(Please stay tuned for important disclosure information at the conclusion of this episode.)<\/p>\n

Christine Benz: <\/b>Hi and welcome to The Long View. I\u2019m Christine Benz, director of personal finance and retirement planning for Morningstar.<\/p>\n

Amy Arnott: <\/b>And I\u2019m Amy Arnott, portfolio strategist with Morningstar.<\/p>\n

Benz: <\/b>Today on the podcast we welcome back Nick Maggiulli. He\u2019s the author of a new book called The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life. His first book was called Just Keep Buying. In addition, Nick writes a wonderful blog called Of Dollars and Data, which is focused on the intersection between data and personal finance. In his day job, Nick is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management. He received his bachelor\u2019s degree in economics from Stanford University. Nick, welcome back to The Long View.<\/p>\n

Nick Maggiulli: <\/b>Thanks for having me on. I appreciate it.<\/p>\n

Benz: <\/b>Well, we appreciate you being here and congratulations on the book. We often hear that if someone had a successful first book, writing the second one can create some angst. Did you find that to be the case that writing The Wealth Ladder was harder than Just Keep Buying was?<\/p>\n

Maggiulli: <\/b>In some ways, yes, and some ways, no. The only part that was easier was that I had obviously written a book before, so I didn\u2019t have that existential dread of, like, will I finish it? What\u2019s going to happen? I knew I would get through it eventually. I think the part that was actually harder, it was a harder book to write, all else equal, because my writing process was just very different. When I wrote Just Keep Buying, I had so much prior material from my blog that I was just using again. So, I would say 70% of Just Keep Buying was like old blog posts that I kind of repolished and restructured to create Just Keep Buying. But with The Wealth Ladder, I had to just focus exclusively on one idea. So, I ended up writing so much more new stuff. I\u2019d say 80% of The Wealth Ladder is new material. Like, the idea I\u2019ve talked about previously on one blog post, but it was a very like, hey, here\u2019s this blog post, whatever. And then I\u2019m like, hey, I actually have to think about this much more deeply and really kind of do a lot more research to bring this idea to life. And so, it\u2019s much newer and that\u2019s why it was harder.<\/p>\n

Arnott: <\/b>You also describe yourself as a writer who used to hate writing. How did you get over that hurdle?<\/p>\n

Maggiulli: <\/b>I think you just have to write about what you want to write about. I think that\u2019s the big thing. I think if you guys remember back to grade school and stuff, it\u2019s like, OK, you need to write a 1,000-word essay on The Scarlet Letter. And maybe you guys love that book, or you didn\u2019t, or whatever\u2014you\u2019ve written a 1,000-word essay on The Catcher in the Rye, whatever it is, you have to write about stuff that someone else wants you to write about. And I think that makes it very difficult to be passionate about writing when you\u2019re writing about something else that maybe you don\u2019t necessarily care for. So once it\u2019s like, hey, here\u2019s a topic I really like writing about\u2014personal finance, investing, and so on\u2014I find it\u2019s much easier to keep writing and do something that I used to hate because I wasn\u2019t writing about what I wanted to. Now that I get to write about what I want to, I enjoy it.<\/p>\n

Benz: <\/b>So a basic premise of your new book, The Wealth Ladder, is that financial strategies that worked for us earlier in our lives don\u2019t necessarily work when we\u2019ve amassed more money. And so to use a simple example, if I have $10 million, I probably don\u2019t need to be clipping coupons anymore. So was there a specific catalyst for this thesis? Was there an example or a series of examples in your life that lent themselves to wanting to write a book on this thesis?<\/p>\n

Maggiulli: <\/b>Yeah, I didn\u2019t realize it at the time, but looking back, it\u2019s very obvious now. In my first job out of college, I was working in consulting, and it was a good job. I was getting paid well and everything, but after a few years, I was hitting kind of an upper limit. I was like, hey, OK, now I know that I can see my 5% annual raises, I\u2019m going to get this, let\u2019s say indefinitely, I\u2019m just pretending to project on my career. I could see what my bonuses would be and everything. And I\u2019m like, this is capping out. Early on, this was great when I didn\u2019t have any money. All this stuff was nice. I was very fortunate early in my career. But after a while, you\u2019re like, hey, there\u2019s no real long-term potential here. Like, yes, I could just keep getting these nice raises or whatever, but I realized I had to change something up and I needed to do something I was more passionate about and had more upside potential.<\/p>\n

And so for me, that was like, hey, maybe I should really like start talking about personal finance and investing, and maybe I should eventually move my career into that space, which is kind of what happened. But it took me a few years to get there. But that was kind of the big catalyst for me, was my old strategy of OK just work, get your bonus, reinvest it. Like that\u2019s fine. It would have still worked. It just would have taken a lot longer for me. I started to realize I had to change my strategy up. I had to start this \u201cside hustle,\u201d which is blogging and writing and all that stuff. So that was the big kind of turning point for me. But people feel this all the time. You\u2019ll see, hey, this strategy that used to work doesn\u2019t work anymore. Another example I give in the book is, I used to when I was a little kid, I helped my dad\u2014we\u2019d get cans and all the cans we drank, we put them in garbage bags, and we\u2019d take them down to get the CRV values.<\/p>\n

You get like $20 for a bag, $40 for a few bags, whatever. And that made sense at the time. But now it\u2019s my dad has his whole insurance business. He doesn\u2019t have time to do that anymore. It doesn\u2019t make sense for him to go and collect cans. The wage is now worth it, so to speak. So it\u2019s all those types of things.<\/p>\n

Arnott: <\/b>I was just thinking that we should probably take a step back and give people a quick definition of what The Wealth Ladder is. Can you kind of summarize the concept and how you came up with that?<\/p>\n

Maggiulli: <\/b>Yeah, of course. So The Wealth Ladder is just a new framework for thinking about building wealth. And that framework is based on six distinct levels of wealth. And when I say wealth, I just mean your net worth. So that\u2019s all of your assets, everything you own minus all of your liability. So everything you owe. So for example, take all the cash in your checking account, that\u2019s an asset, your home value, that\u2019s an asset, and so on. That\u2019s all in the asset category. Subtract out everything that you owe to others. So if you have a mortgage, student loan debt, credit card debt, and so on. That\u2019s all your liabilities. You net those two numbers, and you get to a number. That\u2019s your net worth. And you don\u2019t need to have it down to the penny. You just have to know the range because that range determines what wealth level you\u2019re in. So level one, I say is less than $10,000 in net worth. Level two is $10,000 to $100,000. Level three is $100,000 to $1 million. Level four is $1 million to $10 million. Level five is $10 million to $100 million. And finally, level six is $100 million plus. The thing that makes the framework very easy is once you know one of the levels, because they\u2019re all just factors of 10 off of each other, you can kind of figure out the rest.<\/p>\n

So if you just remember, hey, level three is $100,000 to $1 million in wealth or net worth, then you can figure out, OK, level four must be $1 million to $10 million. Level two is $10,000 to $100,000, and so on. So I find that this is very helpful for a host of reasons because I think it maps on the economic classes in the United States. We can get into that. It maps on to spending behavior, investment behavior, a whole bunch of stuff. And that\u2019s what the first part of The Wealth Ladder, the book, is about. It\u2019s about just understanding this concept and why it\u2019s very useful as a framework for thinking about how you spend money, income decisions, career decisions, and then also how you invest your money.<\/p>\n

Benz: <\/b>So yeah, let\u2019s expand on that, how it maps on to the economic classes in the US. Can you talk about that? Like what percentage of the population roughly falls into each of those six bands?<\/p>\n

Maggiulli: <\/b>So once again, I\u2019m going to just give you the rough percentages. The exact percentages are in the book. Because it\u2019s just easier to give you. So roughly 20%\u2014and remember, this is household wealth. So this is your household. So if you have a partner, obviously you include their wealth. Twenty percent are in level one. That\u2019s less than $10,000. Roughly 20% are in level two, which is $10,000 to $100,000 in wealth. And that would probably be like, lower middle class, working class. That\u2019s what level two is. Level three, that\u2019s $100,000 to $1 million. That\u2019s about 40% of the US. So that\u2019s your middle class. That\u2019s like where most Americans are, 40% of the U.S. And then level four, which is $1 million to $10 million\u2014that\u2019s millionaires\u2014that\u2019s going to be about 16% of the US.<\/p>\n

So I\u2019m not saying 20 because you\u2019ll see why in a second. So roughly 16% in the US\u2014actually let\u2019s just say 18% to make the math a little bit easier\u201418% of the US is $1 million to $10 million. And then the last two, like level five and level six, that\u2019s the last 2% of the United States, more or less. So that\u2019s an approximation of where everyone is. So it\u2019s 20% in level one, 20% in level two, 40% in level three, and then roughly 20% in everyone above level four. And most of that is obviously in level four, which is $1 million to $10 million. And this is actually a big change because level four, that $1 million to $10 million bucket has grown significantly since, especially since covid. When you look at the snapshot data and in 2019 it was not as large as it is now. So that cohort is getting bigger and bigger. And that\u2019s what I call the upper-middle class. I know you\u2019re saying $10 million is upper-middle class, like no, most of the US it\u2019s definitely not. It\u2019s definitely upper class. But in parts of the US if you have like $6 million, you\u2019re probably upper-middle class in a very high-cost-of-living city. I know that\u2019s shocking to some people, but I think that\u2019s the truth of it.<\/p>\n

Arnott: <\/b>And the data source for a lot of this data is the Federal Reserve Survey of Consumer Finances.<\/p>\n

Maggiulli: <\/b>Yep, the 2022\/23, it uses some 2023 data as well. So the core of the surveys are in \u201923. But yes, it\u2019s the FCF. So the Federal Reserve runs this data, the snapshot every three years. I\u2019m very interested in the 2025 data, which will be released next year in 2026, but we have to wait for that. It\u2019s like every three years we get this treasure trove of information. And it\u2019s very interesting to see how it plays out.<\/p>\n

Arnott: <\/b>Yeah, definitely. Can you talk a little bit about the composition of wealth within each of the bands? So, how does it break down between cash holdings versus real estate or retirement accounts, other accounts, things like that?<\/p>\n

Maggiulli: <\/b>Yeah, so I\u2019ll just say in general\u2014I don\u2019t have all the numbers like memorized at the top of my head\u2014but I\u2019ll say in general, those in the lower half of the wealth ladder, so let\u2019s say level one, level two, level three, you see a lot more assets in cash, in vehicles, and in your primary residence. So you\u2019re home. And then those in the upper half of the wealth ladder\u2014level four, five and six\u2014you see most of their assets are in retirement accounts, individual stocks, stock holdings, and some sort of equities, and then individual businesses. So like personal business investing. And so those in level six with the $100 million plus in wealth, over half, on average, if you took all the people in that bucket\u2014there\u2019s not too many in the data, but what they have, they do their best to sample them. Over half of their wealth is in individual businesses.<\/p>\n

And which makes sense. Like you think of all the billionaires out there, like almost all of their wealth is going to be concentrated in one big business. Jeff Bezos has Amazon, Bill Gates for the longest time had Microsoft. He\u2019s now very diversified. So that\u2019s a whole separate discussion. But if you\u2019re trying to figure out like what\u2019s the difference in the assets between those lower on the wealth ladder and those higher on the wealth ladder, it\u2019s really just a shift into income-producing assets. If you look at the assets held by those lower on the wealth ladder, those assets don\u2019t produce income. Cash, vehicles, your primary residence, none of that is kicking off an income stream to you. Then you compare that to those in level four, which is $1 million to $10 million, and so on, or above. All those people in levels four and up, most of their assets are in income-producing assets, things like stocks, things in your retirement account, bonds, in businesses, and so on. So that\u2019s the big shift I see. And so like it\u2019s even kind of ironic because in my first book, Just Keep Buying, the mantra was the continual purchase of a diverse set of income-producing assets. And that still holds now that I\u2019ve looked through the data across the spectrum, that is still the case. I still believe that. It\u2019s just interesting that you can kind of see that type of pattern happening as individuals acquire wealth.<\/p>\n

Benz: <\/b>I\u2019m going to home in on that level four, which you said is growing. And my guess is that if we were to think of the composition of the audience listening to this podcast, I\u2019m thinking a lot of them would probably be in that band or their clients would be in that band. It\u2019s a big range, $1 million to $10 million. And it seems like you could argue that being at the top or bottom of the range could really make a material difference in someone\u2019s lifestyle in their level of financial security and retirement. Do you encounter a lot of people who don\u2019t really aspire to be in level five or six, but probably want to be further up within level four? What\u2019s your take on that?<\/p>\n

Maggiulli: <\/b>Oh, for sure. It brings me back to that quote from\u2014Rockefeller was asked by a journalist how much money is enough and he answered, \u201cjust a little bit more.\u201d And so I think that\u2019s always the case. Like we\u2019re always kicking the can down the road. Like people have their fire number. Oh, once I hit $3 million then I\u2019ll have enough income to never have to worry again. But then, oh, well, inflation went up so maybe I need $4 million. Or oh, this happened, maybe I need this. And oh, like it\u2019s easy to keep. And some of these are justified. Like, prices change, things change. Like it\u2019s fine to change your mind over time. But I think it\u2019s very easy to keep playing that relative game and keep kicking the can down the road in terms of what\u2019s enough. I think it\u2019s a tough thing. It\u2019s not easy to come up with what\u2019s enough. Yeah, is it better if you had $2 million, would you probably feel more comfortable with $8 million?<\/p>\n

Yes, probably, and that\u2019s why I said some with $8 million is probably closer to the lifestyle of someone in level five than some with $2 million is. But they\u2019re more similar in a lot of ways than meets the eye. So in terms of just thinking about that, yeah, I agree, people obviously feel like they need more. At the same time, I think the big shocking thing is once you get to that level of wealth, once you\u2019re in level four, like even a significant amount of money to most Americans is not going to fundamentally change your lifestyle. If you have $5 million, an extra $100,000 is going to basically do nothing for you. Even though you could go on a bunch of vacations with that. I know that sounds so out of touch, but it\u2019s not like that extra $100,000 is going to allow you to go fly private all the time. Or you\u2019re going to have a full-time butler for the rest of your life. It\u2019s not enough wealth to fundamentally change how you live your day to day. But it just goes to show the value of money changes as you have more of it and it just becomes I would say less useful at some point over time.<\/p>\n

Arnott: <\/b>What about people who might not feel wealthy or free to spend at each of those levels? For example, someone in level four with between $1 million and $10 million who still wants to skimp a lot on airfare and travel, things like that, hotel expenses. Do you think it\u2019s common to have disconnects like those?<\/p>\n

Maggiulli: <\/b>I think there\u2019s a few things to think about with this. First is like, how is your wealth comprised? If you have, oh, hey, I have a net worth of $4 million, but $3 million of that is in my house, which I bought a long time ago, now it\u2019s worth a lot. That\u2019s going to feel very different than, oh yeah, I have $4 million and it\u2019s liquid, or I have a $500,000 house, which I love. And I have another $3.5 million liquid. It\u2019s just a different feeling in terms of the amount of cash you have. So I think composition is a piece of it. The second piece of it is, all the money formulas, rules, spending rules, and so on, in the world can\u2019t overcome human psychology in a lot of cases. So some people are just going to feel like, hey, I should never pay that much for this.<\/p>\n

It just feels like a rip off to them, even if they could easily afford it, and so on. And for the record, like when I think about these spending rules and how to think about spending money, like with the wealth ladder, once you hit certain levels, I kind of think you start to get a certain amount of \u201cfreedom\u201d in a certain spending category. So level four, $1 to $10 million, I consider that the beginning of travel freedom. So you can start to upgrade your seat on an airplane, you can start to say, hey, maybe I can stay in a slightly nicer hotel, and so on. By the time you get to $10 million, you can basically do anything besides fly private, I think. You can stay at basically any hotel, you can always get first class if you want to. But it\u2019s kind of that slow progression that happens over time. And so your point is well taken in that having $1 to $10 million, that you could have $5 million and still not feel comfortable upgrading to first class. And that\u2019s completely fine. It\u2019s really up to you. But I do think a lot of it is a psychological thing.<\/p>\n

Benz: <\/b>So in the book, you note that falling down the wealth ladder is actually quite rare. But it seems like there are a lot of examples of people who have fallen down the wealth ladder where their net worth is lower over time. What are some common reasons that might happen? And why do you think it doesn\u2019t really happen that much?<\/p>\n

Maggiulli: <\/b>It depends. So how you fall down the wealth ladder depends on where you start. And I\u2019ll give you a quick example of this. So let\u2019s say you\u2019re in level two, you have somewhere between $10,000 and $100,000. If you told me someone was in level two today and in five years from now, they\u2019re in level one, my guess is what happened to them is they kind of got unlucky. All else equal, like I don\u2019t know anything about their life, but they probably got unlucky in some way. Maybe they had some really bad medical issue. Maybe they lost their job and as a result had to start pulling down out of their 401(k) or out of some cash they had. So usually if you\u2019re in a lower wealth level and you happen to fall even lower than that, it\u2019s probably from some form of bad luck. That\u2019s usually my take. Of course, spending, and so on, that can happen. But that\u2019s not what I see in the data overall. What I see in the data is most people aren\u2019t really bad spenders.<\/p>\n

So that\u2019s the first piece is probably bad luck. Now if you\u2019re in let\u2019s say level five, you have $10 million to $100 million, and you told me, hey, five years from now, this person is going to be in level four, $1 million to $10 million or even level three, less than $1 million. Like what happened? It\u2019s also a form of bad luck, but it was probably because they had an investment that went bad, or they were not diversified. So when you talk about people that have really, really high amounts of wealth that end up bankrupt, or close to zero, or just a much lower wealth level in the future, it\u2019s usually because their business went under, they had an investment go bad, they were way too concentrated. We hear stories about this all the time in the financial media of a hedge fund manager that blew up and now they\u2019re bankrupt. It\u2019s like, how does that happen? How can they be that rich and you still lose everything, because they just weren\u2019t diversified.<\/p>\n

It\u2019s that simple. So the types of things that makes some person fall down the wealth ladder are going to vary. There\u2019s some form of maybe luck in some way if you want to think about it, but some it\u2019s like things like that affect you as an individual. Like, oh, I got sick. Oh, I lost my job. That\u2019s going to be probably someone lower on the wealth ladder. As you gain more and more wealth, it\u2019s usually something to do with your actual assets. Like something really bad happened to your assets that caused you to lose your fortune. So that\u2019s what I would say to that.<\/p>\n

Arnott: <\/b>How much does our socioeconomic status at birth determine where we end up on the wealth ladder? And have there been any changes in economic mobility over time?<\/p>\n

Maggiulli: <\/b>So parental wealth is highly correlated with economic outcomes. Obviously, there\u2019s a lot of anecdotal examples. It explains why many of the most successful entrepreneurs came from well-to-do families like Bill Gates, Zuckerberg, Bezos, and so on\u2014they all came from wealthy families. Of course, these weren\u2019t like ultra, ultra-wealthy families, but they were wealthy enough. So I think there is a big correlation there between where you start, or where your parents start, I guess, or where you start in that sense and where you end up. I think it kind of sets a floor in your future wealth level. Like if you grew up upper-middle class, it\u2019s very unlikely you\u2019re ever going to be in level one. Something really crazy would have to happen for that to happen, like for your family to even allow that.<\/p>\n

So when I think about that, there\u2019s this sort of floor that doesn\u2019t obviously guarantee that you\u2019re going to have the same financial success as your parents. But I think it means that your wealth level is likely to be similar to theirs over time. And so in terms of talking about mobility, they actually just did a study, and they found that incomes are still going up. But if you\u2019re saying, well, that can\u2019t be true, Nick. Like I know for a fact that like millennials and Gen Z, their income isn\u2019t higher than their previous generation. That is actually true. Their income isn\u2019t higher. But how is their income higher? Like what are you saying, Nick? It\u2019s because there\u2019s no more transfers from parents.<\/p>\n

So parents are giving their kids, there\u2019s something like 50% of millennial and Gen Z are getting some sort of financial transfer from their parents, whether that\u2019s a monthly stipend, whether that\u2019s a down payment on a house, help with the down payment on a house, things like that. So when they actually just measured incomes without looking at where the source of income was coming from, you\u2019ll see that incomes are actually still going up in some way. And so there is still some economic mobility, but there\u2019s a transfer that\u2019s going on. So maybe it\u2019s not fair to say economic mobility is going up when that\u2019s coming from transfers. But it\u2019s a new world we\u2019re in now where this is the first generation that they\u2019re relying more on their parents for the economic help and they are still doing OK.<\/p>\n

So it\u2019s a weird\u2014the data is still coming out. And so I want to see how this plays out, especially as all the boomers start to pass on and that wealth gets passed over. That\u2019s going to take another 20 or so years. Like this is going to take time to move through all this stuff and seeing how that ends up and where, because I remember for a long time, everyone was like, oh, millennials are the poorest generation ever. And now they\u2019re all backtracking all that stuff just because it just took us a little bit longer to get there. And once again, there\u2019s more transfers of this sort that are happening that are kind of changing the data in a way.<\/p>\n

Benz: <\/b>You share a bit of your personal story at the beginning of the book and really throughout it. And you just mentioned the can-collecting example. And the gist is that you did not come from money. I\u2019m wondering if you can talk about how your lived experience has affected how you approach to personal finance?<\/p>\n

Maggiulli: <\/b>Yeah, I think it provides a different perspective. I mean, my biggest cultural shock was going to Stanford where I just got to meet people from all walks of life. Many of you came from much wealthier families. And now looking back, I truly believe that the more wealth levels you\u2019ve lived in, the more people you\u2019ve lived around, the more you can just relate to people from different economic backgrounds. Like I know what it\u2019s like to have parents that went bankrupt. I know what it\u2019s like to live most of my life in level two. Like I know what it\u2019s like to now actually build some wealth. And so I work at a wealth management firm where I talk to advisors, who talk to clients that have very different problems than the problems I had growing up. And it\u2019s just, it\u2019s interesting to see that. And I just try to bring that very experience to my writing. That\u2019s the whole goal is like, I think because I\u2019ve seen a little bit of both sides of the economic spectrum, I can kind of write about it in a way that maybe someone that hadn\u2019t grown up like that would have written about it.<\/p>\n

Arnott: <\/b>You devote the first part of the book to talking about spending decisions. And I\u2019m wondering if you can talk about how can people decide, if what they think is a high ROI expenditure is actually wise and going to pay off from something that isn\u2019t really worth it?<\/p>\n

Maggiulli: <\/b>Yeah, I think it just varies from person to person. I personally don\u2019t like spending money on fancy clothes, but I have no problems spending a lot of money at a restaurant. Like that\u2019s just what I value. I value the experiences, especially food experiences. You may value a nice car, you may value, really high-quality electronics, whatever. Everyone\u2019s different. And so the only way to know what\u2019s high ROI is to determine what you really value in life and then spend money accordingly. I think that\u2019s the hard part though. It\u2019s like, know thyself is this thing we talk about, it\u2019s been talked about in Greek philosophy for thousands of years, but that\u2019s really the answer is like, what do you really want? And that\u2019s what\u2019s the high ROI stuff is like where you\u2019re going to get the highest return on investment is on the things that you actually value. But the hard part is figuring out what you value.<\/p>\n

Benz: <\/b>You share what you call as the 0.01% rule. Can you talk about what that is and how it can aid with decision-making about doing spending, and what expenditures to stress out about and which to not stress out about?<\/p>\n

Maggiulli: <\/b>Yeah, so the 0.01% rule basically says that you can spend 0.01% of your wealth or just another way of looking at it\u2019s one-10,000th. So you could call this the one-10,000th rule as well. You can spend one-10,000th of your wealth on a daily basis without having to worry about anything. And so I\u2019ll explain where that comes from. So let\u2019s say your net worth is $10,000. You\u2019re basically right on the cusp between level one and level two. That means you can spend an extra $1 per day without any worry about jeopardizing your future wealth. And where that $1 that 0.01% comes from is, on an annualized basis, if you\u2019ve got a return of 0.01% a day, that\u2019s like a little bit under 4% a year. It\u2019s like 3.7% a year. It\u2019s very conservative return. So every day your wealth is generating that much money.<\/p>\n

So if you have $10,000 in wealth every day in theory, you\u2019re generating an extra $1 a day without doing anything. So in theory, you could spend that $1 and not jeopardize your future wealth. So if you have $100,000 in wealth, you could spend $10 a day. If you have $1 million in wealth, you can spend $100 a day, et cetera. Now, obviously this isn\u2019t your total spending. If you live in the United States, you\u2019re not going to survive on $1 a day. This is the marginal spend. Everyone\u2019s making a spending decision, you\u2019re making it on the margin.<\/p>\n

Like when you go to buy a car, you\u2019re not saying, oh, should I get a Toyota Camry or a Maserati? You\u2019re debating between the Camry and the slightly nicer Camry. That\u2019s what I\u2019m saying. You\u2019re always doing it on the margin. Like when you sit down in a restaurant and you\u2019re like, do I want to get the burger for $20 or the salmon for $30? That marginal difference is $10. And so my argument is that once you have like $100,000 in wealth, that extra $10, you can spend that every time you go to a restaurant without worrying about it. And so the 0.1% rule works in that way by just it allows you to have some lifestyle creep because you\u2019ve shown financial disciplines. Like, hey, look, I\u2019ve reached this level of wealth so I can now spend more in certain categories. But until I reach that level of wealth, I\u2019m not going to do that.<\/p>\n

And so like in my example\u2014I still to this day, I don\u2019t have basically any travel freedom. When I go to a restaurant, I\u2019ll buy whatever I want. I don\u2019t care. But I am still getting the coach seat. Maybe I will upgrade my seat to a slightly nicer seat, not a first class seat, but I\u2019ll go like get something with more leg room. That\u2019s where I\u2019m at in my wealth journey. Like one day if I do well, if things go well for me, I will maybe always get a first class seat, but that\u2019s not in the cards for me right now. And so I\u2019m spending according to my wealth level, and I\u2019m very strict about that. It\u2019s because that the extra whatever $100 or whatever it is, is not enough to upgrade to first class every time. So I can\u2019t spend that money. That\u2019s how I work through it.<\/p>\n

Arnott: <\/b>You also write that housing is really a consumption good and not an investment. Why is that? And are there any levels where housing is more important in building wealth and getting to the next level?<\/p>\n

Maggiulli: <\/b>I think housing is important for most Americans because it is the primary way in which they build wealth, even though it is a consumption good. But when you pass on and you pass that property on to the next generation, that\u2019s when it becomes a nonconsumption good at that moment of time. So if you assume, oh, I have children, they have their own house already. When you pass and you pass on your property, that\u2019s the moment when it\u2019s no longer a consumption good. Now it\u2019s an asset for your family. So it really depends on when. It\u2019s like when you\u2019re thinking about it throughout your lifecycle. Like, yeah, for you, it\u2019s a consumption good, but for your offspring and so on, it won\u2019t be a consumption good. So I think primary residence is, once again, the homeownership rate is still like 66% or something like that in the US. Most households have a home. I don\u2019t expect that to change in any drastic way. It\u2019s going to be anywhere between 60% and 70%, probably throughout the rest of my life.<\/p>\n

And it is a way to build wealth because you own this thing, the property prices don\u2019t change too much. I know in recent years they\u2019ve gone up a ton, but I don\u2019t expect them to move a lot for a host of reasons. There\u2019s, what do we call it, a Nimbyism or whatever, people preventing other houses from being made, and so on. I don\u2019t expect major changes in-house prices going into the future. Does that mean that they\u2019re going to keep growing at the same rate? No. And so we could get into a discussion about the future real estate prices, but generally it\u2019s been a pretty stable asset class. And I think there\u2019s a lot of entrenched political and cultural reasons why it will remain a relatively stable asset class. Now, does that mean it\u2019s going to beat the stock market or whatnot? I have no clue. That\u2019s why I say you got to diversify.<\/p>\n

Benz: <\/b>So you write in the book that people can get into overspending trouble if they have high incomes but not necessarily high net worths. But you point out that income can be fickle. So you believe that people should use their net worth to guide how much they can reasonably spend. Can you talk about that?<\/p>\n

Maggiulli: <\/b>So they\u2019ve done studies on negative income shocks among US households and something like 10% of households are going to see a 50% or greater decline in income over the next two years. So like one in 10 households are just going to have a massive hit to their income in the next two years. And what does that mean? Usually most households are two income-earners. All that just means is one earner is going to lose their job in the next two years. It\u2019s not unreasonable that one person might lose their job in two years, right? So one in 10, that is. So because of that, that\u2019s why I think income is fickle. And more importantly, among higher earners, negative income shocks tend to be persistent. So in other words, if you have a very high-paying job and you lose it, I wouldn\u2019t expect to get back that old income you had, that higher income anytime soon. And trust me, I have friends where this has happened, like, oh, I lost my high-power job doing this. And I got another job, but I took a 40% pay cut or I took this.<\/p>\n

It\u2019s like almost starting, unless you can get a job right away back in the exact same role you were doing, it can be tough for people. So that\u2019s why I think you have to spend based on wealth, not income, because as volatile as wealth can be, it is far less fickle than income. Wealth has a little bit more staying power. Of course, there\u2019s things like the Great Depression where wealth dropped off a cliff quickly, but that\u2019s usually not the case. And so your wealth will be a lot more stable than your income will be over the long haul.<\/p>\n

Arnott: <\/b>You also note that income-earning activities that made sense for us at one stage in our lives wouldn\u2019t necessarily make sense as we move up the wealth ladder. Can you talk a little bit more about that and maybe share some examples?<\/p>\n

Maggiulli: <\/b>Yeah, you guys gave the extreme example earlier of the person with $10 million clipping coupons. At some point in your financial life, certain income-generating tasks won\u2019t make as much sense. I think in the formal way that economists talk about this, they call this your opportunity cost. An opportunity cost is just what you have to give up when you do something. So if you work for an hour, your opportunity cost is anything else you could have done besides work in that hour. So you\u2019re like, oh, I could have gone to the gym. I could have done this. Whatever it is, that\u2019s your opportunity cost. So your opportunity cost still can have an income. Like if you go and do something like, hey, this is a great income-generating activity, but now that my income is so much higher, or that I\u2019m more skilled, or whatever it is, that old income-generating opportunity may not be worth it anymore. So as you gain more wealth, your opportunity costs typically increase.<\/p>\n

Like when I first graduated college, I didn\u2019t have a problem working 60-hour weeks, if I had to. My opportunity costs were relatively low. I didn\u2019t have as much else I could be doing with my time. Yes, I could see friends, family, but that was about it. I didn\u2019t have a wife. I didn\u2019t have all these other things that now take up more of my time. But as I\u2019ve gotten older and I\u2019ve built more wealth, every additional hour means more to me than just the additional money does. And so I think you\u2019ll see that with time. That\u2019s what I\u2019ve found most people I\u2019ve spoken with. That\u2019s how it changes over time. So I could spend more time going to work out or going to see friends instead of just working an additional hour because at some point, the money\u2019s not worth it anymore. And so that\u2019s where that transition slowly happens over time, but that\u2019s kind of the thinking there with the wealth ladder.<\/p>\n

Benz: <\/b>Your book is about money. It\u2019s not really a self-help book. But as we ascend the wealth ladder, should we give ourselves more freedom to say no to some work activities that we don\u2019t enjoy and yes, to perhaps some that are less remunerative, but maybe more enjoyable? I\u2019m wondering if you can talk about how you can square your desire to ascend the wealth ladder with your desire to spend time in a way that\u2019s agreeable.<\/p>\n

Maggiulli: <\/b>Yeah, I think you have to ask yourself, what are your priorities and why? What does getting to a particular wealth level mean to you? Would it give you more time, more freedom? What are you actually looking for? The real question is what will you do once you get there? I think you have to imagine kind of like, oh, here\u2019s where my life would be great and then back out from there. Because if you know that, then you can determine whether you actually need to get to that spot. Because a lot of people, I don\u2019t know if they always think about that end state and they just say, oh, once I have X dollars, then I will be able to do all this stuff. And sometimes that\u2019s true, but for a lot of people, they can actually do that without getting to that level of wealth. So I think people can live very fulfilling lives in level three and four completely. I\u2019m 100% convinced of that. But I\u2019m also convinced it\u2019s easy to persuade yourself that that\u2019s not the case. It\u2019s easy to persuade yourself, oh, I need to have $10 million plus to really have made it, to really have happiness. And at some point, once you have enough wealth, it\u2019s all the other things in life that impact your day-to-day happiness and well-being. And you don\u2019t realize that until you maybe get to that point like, oh, wow, that didn\u2019t matter as much. But it\u2019s one of those things that I just I think about a lot. And I think it\u2019s something that\u2019s very overlooked in the wealth space.<\/p>\n

Arnott: <\/b>We also wanted to talk a little bit more about some specific questions for each level. And looking at level one, I think a common question with people who are basically living paycheck to paycheck is what to prioritize if they do have extra funds. So should they pay down debt or build an emergency fund or try to invest? What kind of advice would you give someone in that situation?<\/p>\n

Maggiulli: <\/b>Yeah, I would say emergency fund all the way. Because once again, in every wealth level, like some part of your life gets amplified. And for those in level one, it\u2019s bad luck. Because if you don\u2019t have a lot of money and something happens, let\u2019s say you have a car, your tire blows out, you have to get a new tire. Like there\u2019s just ways where bad luck is amplified in a way that it\u2019s not amplified for some with more money. Like, oh, if I have a tire\u2014I don\u2019t even have a car\u2014but let\u2019s say I had a car and my tire blew out. Like that\u2019s not a problem. It\u2019s annoying. It\u2019s an annoyance for me, but it doesn\u2019t change my life at all. I just get the tire fixed and move on. For someone on level one, maybe who doesn\u2019t have a lot of money, if that happens, that could really send them into a financial tailspin. So the thing you want to focus on is like de-amplifying that bad luck. So get that emergency fund. Then once you feel like you have some sort of safety, so enough, then you got to start doing everything to get out of debt. And so there is a lot of little things you have to do to get there. And it\u2019s not easy, but like just getting from level one to level two, I think is the biggest lifestyle change you could ever have as an individual.<\/p>\n

Like having that freedom, just to breathe and not have to worry about, OK, if some bad thing happens to me, I\u2019m not screwed. Yeah, it\u2019s not great. But that\u2019s the thing I try and emphasize for a lot of people is get out of level one, because it is much scarier when you\u2019re in there and any one bad thing could send your life in a different direction. Like that\u2019s the thing that\u2019s really scary and unfortunate.<\/p>\n

Benz: <\/b>And it seems like credit rating, a poor credit rating at that level is kind of the ultimate amplifier, multiplier, whatever you want to call it. That if that\u2019s something that\u2019s working against you, it makes it really hard to climb out.<\/p>\n

Maggiulli: <\/b>And that takes time to get that off. If you go into bankruptcy, it takes seven to 10 years or whatever it is before it\u2019s off your credit report. So it\u2019s like, these are the types of things where that stuff can follow you. And so you could even get your act together and it\u2019s like five years later, but that\u2019s still there haunting you, unfortunately. So anything you can do to prevent that is ideal. And of course, it\u2019s not easy. A lot of times you probably already maybe got into that position because of bad luck. So it\u2019s not a great place to be. And it\u2019s one of those things where you just have to try your best to get out of it.<\/p>\n

Benz: <\/b>So you have a fun discussion in the level two chapter about finding the intersection of what you\u2019re good at, what you\u2019re interested in, and what someone will pay you to do. Can you walk us through that exercise and why it\u2019s so important?<\/p>\n

Maggiulli: <\/b>Yeah, I think the exercise is important because I think the goal, I think most people I hope would agree with this is like, you want to maximize your long-term income while also enjoying the work you do. If we all enjoyed the work we did and got paid well, I don\u2019t know what more you can ask for out of a career, right? And so of course that doesn\u2019t mean that your first job you\u2019re going to get is going to check all the boxes. But the goal is to eventually get to do work that does check those boxes, right? So those three boxes are, what are you good at? What are you interested in? What will people pay you for? In terms of first jobs, like where do I start? I say you got to focus on what people pay you for, because that\u2019s what\u2019s required to live. Like you need money to survive. So all else equal, like as much as I would be like, hey, just do what you\u2019re interested in.<\/p>\n

Like if it\u2019s not paying the bills, it\u2019s probably not the right way to start with. So once you get that covered, what\u2019s the next highest-priority thing I would focus on is focus on what you\u2019re good at, because I feel like if you\u2019re doing something someone\u2019s going to pay you for and you happen to be good at it, if you get a lot of praise for being good at something, you\u2019ll actually start to like it. And I think this is also my thing with\u2014we talked about writing a little bit earlier where I didn\u2019t used to like writing, now I do it\u2019s because I was decent at it, but I was always writing about other people\u2019s stuff. It\u2019s just, as I started to write about my own thing, I started to get more interested in it. I got interested in it from the praise I got from others who read my work. And that really allowed me to start loving it. So it\u2019s something that I wasn\u2019t interested in. And now that I\u2019m very much interested in. So if I have to focus you, it\u2019s like, do the pay stuff and then do what you\u2019re good at. And then hopefully that\u2019ll either lead to interest in that thing.<\/p>\n

If it doesn\u2019t, maybe you can save up enough money through all the pay over the years to then do something you\u2019re interested in that you can possibly get paid for eventually. So there\u2019s a lot of ways to get there. That\u2019s just my recommended path, but you don\u2019t have to follow that. Like I was in consulting for a long time. I was doing something I was getting paid for and I was decent at, but at the same time I was interested in finance, and I was doing that on the side. So that\u2019s another option. If you do love something, keep it as a hobby and just keep doing it. And maybe one day you\u2019ll be able to monetize and change your career. That\u2019s another option as well.<\/p>\n

Arnott: <\/b>So in the level four section, you discuss how big investment losses have the potential to do serious damage. What are some of the best ways to avoid that risk? Not just in level four, but also at other levels.<\/p>\n

Maggiulli: <\/b>I think it\u2019s just really hard to know which investments are going to do well and poorly ahead of time. And so the best solution is the simplest, which is diversify. Like being diversified just means that no single investment can wipe you out. And not just diversify, like, oh, I own 20 different tech stocks. Am I diversified? Technically you are, but they\u2019re not as diversified as you could be. You still have sector bias. So I mean diversified across asset classes, sectors, and so on. That\u2019s why I think survival is the most important part of investing. Just staying in the game, earning a long-term market return will do more for you than just about anything else financially. So my thing I always tell people is stay diversified. I know it\u2019s like, well, Nick, how am I going to get to level six if I\u2019m diversified? It\u2019s very difficult to get there. It\u2019s like, OK, well, that\u2019s true. It\u2019s very difficult to get to level five, level six while being completely diversified.<\/p>\n

I\u2019ll be the first to say that. But usually those people that do that are undiversified in their business interests, but that doesn\u2019t mean that your portfolio, everything outside of the business you own, doesn\u2019t have to be diversified. So I still think diversification is a prudent approach even in that scenario. Even if you\u2019re trying to build a business, that\u2019s going to end up being worth a lot of money one day.<\/p>\n

Benz: <\/b>Many people who are in that level four with net worths in the $1 million to $10 million range think that their investment portfolios should get more complicated as they\u2019ve amassed more wealth. And of course, the industry sells into this mindset that if you have a lot of money, you should be doing something pretty complicated with your portfolio. Can you talk about that?<\/p>\n

Maggiulli: <\/b>So I understand this argument from a diversification perspective based on what I literally just said in one of the prior questions. It\u2019s like, well, I\u2019m trying to get more diversification. The issue I have with that is many of these more complex investment products tend to have higher fees and other sorts of restrictions, whether that\u2019s illiquidity, and so on. That makes them less than ideal for building long-term wealth. So I\u2019m generally neutral on these products overall. I\u2019m not against them, but I\u2019m not for them. And I understand why they exist. I understand why they can be valuable. And especially now that I\u2019m actually in the wealth management space, I think I understand them more than before, but I don\u2019t think they\u2019re necessary to build and maintain wealth in any one of these levels. And one of the reasons why I say that is how often is it, I\u2019m not saying this has never happened, but most of the people that own these products, they got wealthy doing one thing, aka probably had a business, they sold the business for a lot of money, and then they bought the private investments. It\u2019s very rare, the case that they bought the private investments when they didn\u2019t have a lot of money and then all of a sudden that\u2019s the reason they\u2019re rich.<\/p>\n

I\u2019m not saying it\u2019s never happened, it does happen, but it\u2019s very rare. So I think the causality is a little bit backward. Most of the people that own private investments probably got rich doing something else, and now they own private investments versus, oh, I bought a bunch of private investments and that\u2019s the reason I\u2019m wealthy today. So that\u2019s another thing to keep in mind, is which way is the causality with these products? And who\u2019s really making the money. The fees are great here. So I know there\u2019s a lot of people that work in private equity that do very well, but they\u2019re doing well because they have the carry and all the other fees associated with working in that industry.<\/p>\n

Arnott: <\/b>You talk about how a lot of people find themselves perpetually stuck in level four, with net worths between $1 million and $10 million and you argue that really the only way to ascend beyond that level is through business ownership. But for someone who is not comfortable taking the type of risk that you would need to be comfortable with to start your own business, are there other ways to breakthrough and get into level five?<\/p>\n

Maggiulli: <\/b>So you can either once again start your own business or get equity in a business that grows to a much bigger business. So you can be an early startup employer. I like the example I think of as like early Nvidia employees, they didn\u2019t start the business. But with the recent surge in Nvidia stock price in the last few years, their equity became worth millions of dollars. Same thing\u2019s true of early start up employees that get acquired, they maybe employee five, six, 10, whatever, and just because they were there early they got even a small piece of equity on a really decent-sized business you can make a lot of money. So either way the key is to have equity, you have to have ownership. So whether you have a lot of equity in a decent-sized business that you sell or just a little bit of equity in a very huge business, it makes no difference to me. The key is just have business ownership because that\u2019s how, if you are trying to get out of level four, that\u2019s probably the way you are going to do it. Of course, you can be in level four and just save and invest and do it until you\u2019re 90 and I guarantee you\u2019ll probably get out of level four. But for someone in any reasonable timescale, it\u2019s just, it\u2019s very difficult to get out of there without a large business exit of some sort.<\/p>\n

Benz: <\/b>In the context of very wealthy people, you discuss some of the nonfinancial stressors that can come into play. You note that having a lot of wealth can affect relationships, family dynamics and stress, for example. Can you talk about that? Because I think many people assume that if they amass wealth at that level, like over $10 million, all of their cares will evaporate. But you point to the fact that that\u2019s not necessarily true.<\/p>\n

Maggiulli: <\/b>Yeah, yeah. The biggest misconception about extreme wealth is that it solves all your problems. In fact, the only problems it solves are money problems, by definition. While there are many money-solvable problems, I guess we could say in the world, money can\u2019t solve everything. You can\u2019t write your children a check so that they love you. You can\u2019t buy a new cardiovascular system to get into good health. There are certain things you can do that you can have a better relationship with your children. You can have a probably slightly healthier, if you have more wealth, I agree. But you get the point. There\u2019s only so much that money can buy at this point. There\u2019s a limit to money\u2019s usefulness. Unfortunately, some people just don\u2019t realize that until it\u2019s a bit late. You can neglect certain parts of your life to make money, but if you do it for too long, you\u2019ll come to find that that\u2019s all you have. It\u2019s just money.<\/p>\n

It\u2019s not a good place to be in. I\u2019m always trying to emphasize, as you move up the wealth ladder, remember we talked about different wealth levels amplify different things. When you\u2019re on level five and level six, it\u2019s all the nonmonetary parts of your life that are amplified. Your relationships are even more important. Of course, they\u2019re always important in your life, but they\u2019re even more important in level five and level six because you can\u2019t buy them. There\u2019s nothing you can do to change that. You can have all this money; it\u2019s not going to change a thing. If anything, it just shows money matters so much less that all the other things that aren\u2019t money are the things to focus on.<\/p>\n

Arnott: <\/b>You also discussed some of the newer research that has emerged about the connection between money and happiness. Can you talk a little bit more about what those findings are and what we can learn from them?<\/p>\n

Maggiulli: <\/b>Yes. <\/b>The original money and happiness paper, which I believe was Daniel Kahneman and Angus Deaton, that\u2019s the one that I think most people on this podcast probably heard is that money doesn\u2019t buy happiness above, I think it was like $75,000 a year in income. Everyone\u2019s heard that once you have over 75K a year, it doesn\u2019t buy any more happiness. Unfortunately, a guy named Matthew Killingsworth came out and they looked into the data some more and they found that that conclusion wasn\u2019t completely accurate. The more recent research found that more money does buy more happiness if you\u2019re already happy. This was true for incomes above $75,000 a year and they even looked at wealth and this was even more true for people with lots of wealth. I think the conclusion from the original paper wasn\u2019t, they weren\u2019t measuring more happiness, they were measuring more unhappiness. So basically, once you have up to $75,000 a year, as you got more money, it generally prevented unhappiness. After $75,000 a year, it did nothing. You could still be unhappy and have a lot of money.<\/p>\n

That\u2019s what the original research shows because their measure wasn\u2019t perfect. But in the new research, the main conclusion is if you\u2019re poor, more money can buy more happiness. If you\u2019re happy, more money can buy more happiness. But if you aren\u2019t poor and you aren\u2019t happy, more money is not going to do anything. So that\u2019s kind of the main thing. So if you\u2019re like, hey, I don\u2019t have a lot of money, more money will probably make you happier. And if you\u2019re already happy and you have money, more money will probably still make you happier. But if you\u2019re not in those two categories, it\u2019s not going to do a thing. So I think that\u2019s the big change in terms of the happiness research is money does buy happiness if you\u2019re already happy.<\/p>\n

Benz: <\/b>Presumably you\u2019ve ascended the wealth ladder during your career. You don\u2019t have to tell us where you are on it. But what have been some of your main takeaways as you\u2019ve done so?<\/p>\n

Maggiulli: <\/b>Yeah, sorry, it\u2019s in the book. So I don\u2019t want to give it away. Maybe I\u2019ll leave it as a spoiler. It\u2019s in the book. I talk about this. But ironically, building wealth has really taught me the importance of all the nonfinancial aspects of life. It\u2019s easy to focus on money when you don\u2019t have a lot of it, when you grew up in a family that maybe didn\u2019t have a lot of it. But once you do, everything else becomes far more important, valuable. Once you have some money, and the reason why is, once again, as I just discussed. Like you can\u2019t buy it. You can\u2019t buy true friendship, true love, great health, all these things require work somewhere in your life. And the sooner you realize that the more you can take your foot off the gas as you kind of succeed financially. That\u2019s kind of how I like to think about it. So yeah, I mean, that\u2019s the big takeaway for me.<\/p>\n

And it took me some time to get there. But now that I\u2019m there, it\u2019s like, I value money less than I did when I was younger, because I didn\u2019t have any of it. Now that I have some of it, I can be like, hey, I don\u2019t need to worry as much about these types of things. I can focus on spending more time with my family, not having to work all the time and telling my wife, oh, I got to write this thing tonight. I got to do this. And I never spent time with her. It\u2019s like, no, I can chill out a little bit. Things are going to be fine. I don\u2019t need to have that extra dollar. Like that\u2019s not as important as enjoying life.<\/p>\n

Arnott: <\/b>So in addition to your day job, as Christine mentioned before, you are active in posting on your blog Of Dollars and Data where you\u2019re normally publishing about once a week. And I\u2019m curious, what are some of your must-reads or must-listen-tos in the realm of personal finance and investing?<\/p>\n

Maggiulli: <\/b>So I have a lot of different stuff over the years. I have a Popular Post page, which has like a bunch of different things that people have liked over the years. I have this one blog post called \u201cEven God Couldn\u2019t Be Dollar-Cost Averaging,\u201d which went into my first book, Just Keep Buying. But yeah, I\u2019ve been blogging for almost nine years now. I blog once a week. And so I just put a lot of stuff out there. I have a lot of different, I mean, it\u2019s hard to because I\u2019ve been doing it for so long. I have like 450 posts. If you give me a subcategory, I can narrow it down, but it\u2019s really hard to be like pick this one or that one thing. I think that Just Keep Buying stuff obviously has done well. That\u2019s why it did decently well as a book and everything. But yeah, I would say that\u2019s the stuff is like thinking about market-timing and all those types of things and how little those things actually matter. And the most important thing is just to be consistent and just keep investing over time and just focus on raising your income and keep investing. And I think you\u2019ll do fine.<\/p>\n

Benz: <\/b>How about external influences? Are there any people who you read consistently or any podcasts that are always in your feed? What are your favorites?<\/p>\n

Maggiulli: <\/b>So I read a bit, and I really think it depends on, I read more than I listen. I\u2019m just a visual learner. And so I think if I had to say like, it depends where you are on the wealth ladder for what types of things are like must-reads, right? So if you\u2019re just getting started, like you\u2019re level one, I would recommend Tiffany Aliche, Get Good With Money. It\u2019s a great book for people starting out, great for budgeting. That\u2019s the perfect thing there. But now if you\u2019re like, hey, I\u2019m in level four and $1 to $10 million, I really want to get out of level four, I want to get to level five, and so on, then I\u2019m like, OK, look at The Millionaire Fastlane by MJ DeMarco. He has a very different take on that. If you\u2019re like, oh, I want to just keep building my wealth through investing, I\u2019m going to recommend, The Intelligent Asset Allocator by William Bernstein.<\/p>\n

If you\u2019re like, oh, I\u2019m near retirement, what should I do? I\u2019m going to plug your book, Christine, How to Retire. So everything\u2019s based on like what are we talking about? What are we looking at? And I think that because the world of personal finance investing is so wide and there are so many different things, and so it really does depend where you are. And it\u2019s kind of one of the reasons why I wrote this book. Because like, hey, if you\u2019re here, these things will be more helpful. And if you\u2019re here, these might be more helpful. And it\u2019s not that you can\u2019t read across. I don\u2019t think there\u2019s anything wrong with if you\u2019re in level one reading a business book. But I think the risk is it\u2019s just so much higher to starting a business when you\u2019re at basically zero, then if you have some money saved away, and there\u2019s a lot of data on this as well, in terms of like the most successful entrepreneurs generally have more experience, have more money or a little bit older, like all the things that make it easier to start a business, they have those.<\/p>\n

And I think because it\u2019s in the data, it shows that it\u2019s probably better for you to follow the same path. I\u2019m not saying you can\u2019t start a business when you\u2019re young, but I think most of the people that have done it successfully have waited a little bit, have waited until they\u2019re 40, 50, and so on, before they did it. And that\u2019s when they end up being more successful.<\/p>\n

Arnott: <\/b>What\u2019s your take on the whole FIRE movement, financial independence, retire early?<\/p>\n

Maggiulli: <\/b>Yeah, so I love the FI part, of FIRE, the financial independence part. I think it\u2019s a worthy goal, you get to live life in your own terms, and so on. I\u2019m a little skeptical of the RE, retire early, part. And I think it\u2019s just because based on the research, people I talk to everything, it\u2019s just people need some sort of purpose. And I think it\u2019s just difficult for many people to find that purpose outside of work. I\u2019m not saying it\u2019s impossible, but I think, I don\u2019t know, I don\u2019t have an exact number. Let\u2019s say 70% of people need some sort of vocational purpose. It doesn\u2019t necessarily need to be a nine to five. It doesn\u2019t need to make you a ton of money or anything, but I think you need to feel like you\u2019re contributing to society in some way. And so the RE part, if you do the retire early without thinking about that, I think it can lead to an existential crisis. And so that\u2019s the thing, I know that we all glorify, oh, wouldn\u2019t it be awesome if I could just be on a beach all day with mai thais. And I think that\u2019s fun for a few weeks. And then you\u2019re like, OK, why am I doing this? What\u2019s the purpose? And it can get really dark from there if you don\u2019t know what you\u2019re going to do next. So that\u2019s my only kind of pushback on that.<\/p>\n

Benz: <\/b>Well, Nick, congratulations on The Wealth Ladder. Thank you so much for taking time out of your schedule to be with us today.<\/p>\n

Maggiulli: <\/b>Anytime. No, I appreciate you guys so much. Thank you, Amy and Christine, for having me on. I really appreciate it.<\/p>\n

Arnott: <\/b>Thanks again, Nick.<\/p>\n

Maggiulli: <\/b>Thank you.<\/p>\n

Benz: <\/b>Thank you for joining us on The Long View. If you could please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts. You can follow me on social media @Christine_Benz on X. Or at Christine Benz on LinkedIn.<\/p>\n

Arnott: <\/b>And at Amy Arnott on LinkedIn.<\/p>\n

Benz: <\/b>George Castady is our engineer for the podcast and Kari Greczek produces the show notes each week. Finally, we\u2019d love to get your feedback. If you have a comment or a guest idea, please email us at thelongview@morningstar.com. Until next time, thanks for joining us.<\/p>\n

(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording and are subject to change without notice. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates, which together we refer to as Morningstar. Morningstar is not affiliated with guests or their business affiliates, unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. This recording is for informational purposes only and the information, data, analysis, or opinions it includes, or their use should not be considered investment or tax advice and therefore is not an offer to buy or sell a security. Morningstar shall not be responsible for any trading decisions, damages, or other losses resulting from or related to the information, data, analysis, or opinions or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decision. Please consult a tax and\/or financial professional for advice specific to your individual circumstances.)<\/p>\n","protected":false},"excerpt":{"rendered":"Listen Now: Listen and subscribe to Morningstar\u2019s The Long View from your mobile device: Apple Podcasts | Spotify…\n","protected":false},"author":2,"featured_media":284117,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-284116","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114900314577558891","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/284116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=284116"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/284116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/284117"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=284116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=284116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=284116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}