Nick Maggiulli: The Wealth Ladder Has Six Rungs (and Most People Never Climb Past Four)

Afford Anything

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Business, Investing

4.6 • 3.4K Ratings

🗓️ 29 July 2025

⏱️ 74 minutes

🔗️ Recording | iTunes | RSS

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Summary

#629: Here's the thing about personal finance advice: what works when you have $10,000 won't work when you have $1 million. Yet most financial guidance treats everyone the same, whether you're scraping together a $1,000 emergency fund or deciding whether to upgrade to business class. Nick Maggiulli, author of "The Wealth Ladder," joins us to break down how money strategies must evolve as your net worth grows. He's mapped out 6 distinct wealth levels, each requiring different approaches to spending, saving and investing. The levels start simple. Level 1 covers anyone with less than $10,000 in net worth — that's 20 percent of American households. Here, bad luck gets amplified. A flat tire that costs $200 could spiral into job loss and debt if you can't afford the repair. Level 2 spans $10,000 to $100,000 in net worth. Maggiulli calls this "grocery freedom" — you can splurge on the nicer eggs without checking your bank balance. Level 3, from $100,000 to $1 million, brings "restaurant freedom." Level 4, the $1 million to $10 million range, unlocks "travel freedom." Getting beyond Level 4 — into the $10 million-plus territory — requires business ownership or extreme patience. Maggiulli calculates that even saving $100,000 annually after hitting $1 million takes 23 years to reach $10 million, assuming 5 percent annual returns. The data shows income matters more than frugality, especially in the early levels. The median household income in Level 1 is $32,000, but in Level 4 it's $197,000, and in Level 6 it reaches $4.3 million. We discuss why homeownership dominates wealth in Levels 2 and 3, how investment assets become crucial in higher levels, and why many people in Level 4 choose "Coast FIRE" over the grinding path to Level 5. Resource Mentioned: Nick's book: The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Personal finance is often taught in this one-size-fits-all manner. What got you here won't get you there.
0:05.6	And the things that you need to do in order to get from the beginner stages of your money journey to more advanced stages completely change. Sometimes you have to do at the end of the journey the opposite of what you did in the beginning.
0:17.3	So to talk about every step of the journey and how it's different going from a beginner to more intermediate to more advanced, we have with us today the CEO of Ritt Holtz Wealth Management, Nick Majuli.
0:29.3	He is the author of Just Keep Buying and his new book is called The Wealth Ladder.
0:34.4	Welcome to the Afford Anything podcast, the show that knows you can afford anything,
0:38.0	not everything. This show covers five pillars, financial psychology, increasing your income, investing,
0:43.4	real estate and entrepreneurship. It's double-eye fire. Today's episode focuses on four out of
0:48.2	five of those letters, really, maybe all five of those letters. We're going to be talking about
0:52.0	financial psychology, mindset. We're going to talk about increasing your income. We'll talk about investing. I guess we may touch
0:58.0	on real estate. We'll see. And entrepreneurship is going to be a big piece of it. So yeah, today's
1:01.9	episode covers all five of the letters of what we talk about on the show. Welcome, Nick.
1:06.6	Yeah, thanks for having me. Thanks for being here. So what got you here won't get you there.
1:12.5	Talk us through this concept of how personal finance advice changes depending on what stage
1:18.1	you're in.
1:18.8	Yeah.
1:19.1	So the idea with the wealth ladder is that there are different levels of wealth.
1:23.0	And in each level, there's different investing advice, spending advice, income advice, etc.
1:30.7	Depending on which level you're in, you might have to take a different strategy and a different
1:34.4	approach.
1:35.3	And we can definitely get into that.
1:36.8	I can expand on what those levels are, et cetera.
1:39.6	But I'm sure some people who are hearing this, and in a moment we'll talk about what all of those levels are,
	...

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