How Your Ego is Bankrupting You: The 6 Levels of Wealth with Nick Maggiulli

What this episode is about

The discussion explores the relationship between ego, wealth, and happiness, emphasizing that while money can enhance happiness for those who are poor or already content, it doesn't improve the lives of those who are unhappy. It highlights the costly nature of maintaining a façade of wealth due to ego and outlines strategies for achieving financial growth, such as entrepreneurship or acquiring equity, while reflecting on personal lessons learned from the speaker's father about patience and strategic thinking in wealth-building.

Key takeaways

• Practice trumps raw talent; even a five-year-old can outsmart adults with enough rehearsal.
• Money can't buy happiness—unless you're poor or already content; then, it’s a different game.
• Chasing status can drain you; your ego could be the priciest possession you own.
• Equity or acceptance: if you want to climb the wealth ladder, take risks or be content.
• Writing is the gym for your mind; it sharpens clarity and uncovers hidden thoughts.

Who speaks in this episode?

• Ryan Hawk (Host) · 19 min speaking
• Nick Maggiulli (Guest) · 29 min speaking

What is discussed, and when

1. 0:00 – 5:00: Searching for Bobby Fischer
2. 5:00 – 10:00: Roltz Wealth Management
3. 10:00 – 15:00: Dollars and Data
4. 35:00 – 40:00: Dollars and Data
5. 45:00 – 48:13: Dollars and Data

Notable quotes from "How Your Ego is Bankrupting You: The 6 Levels of Wealth with Nick Maggiulli"

• That's a Bobby Fischer quote. So, there's an old there's a movie called Searching for Bobby Fischer. the quote is not from Bobby Fisher. It's from the movie Searching for Bobby Fisher. And in the in there, he says,.

  about Searching for Bobby Fischer · at 1:06

• So, I'm a I came in as a data scientist at Roltz Wealth Management and they only found out about me through my writing where I'm kind of talking about data, showing charts and all these types of.

  about Roltz Wealth Management · at 5:26

• And I think it's like a really interesting way to view wealth. Not surprising. I'm a big of dollars and data fan. I told you that last time we talked and just keep buying. And…

  about Dollars and Data · at 9:55

Who and what is mentioned in this episode?

Books & papers

• Searching for Bobby Fischer — Book · Referenced work · 1 mention · first at 1:08
  Mentioned in the context of a quote that influenced Nick Maggiulli's thinking and his father's teachings.

Companies & orgs

• Roltz Wealth Management — Company · Business focus · 1 mention · first at 5:26
  Nick Maggiulli's current workplace, where he serves as COO, discussing his role and contributions.

Places & events

• COVID-19 pandemic — Event · Referenced event · 2 mentions
  Mentioned in passing as a context for discussing financial strategies and market behaviors.
  It's going to happen again. It's happened before.

Media & podcasts

• Dollars and Data — Media · Referenced work · 4 mentions · first at 10:00
  Nick Maggiulli's blog where he shares insights on finance and data, mentioned as a source of his expertise.

Full transcript with timestamps

0:00 I could beat them not because I was smarter than them, only because I had practiced something. You can learn something and outperform people even if they're better than you at every other thing.

0:08 How does money impact happiness? If you're happy already, more money will make you happier. If you're poor, more money will likely make you happier. But if you aren't poor and you aren't happy, more money is not going to do a thing.

0:23 You said to me the most expensive thing people own is their ego. If you want to look a certain way and you want to like portray a certain image to the world, it can be very costly to do that. I think people in level three that want to look like people in level four end up spending so much money to keep up with the Joneses.

0:38 For the person who's like, "Dude, I have a really good job. I don't have really any equity." What do you say to those people?

0:43 You either start a business or you get early in a business and get enough equity and then it gets very large. So, you either do that or you just accept, hey, I'm not going to make it to level five and I can just be content where I am. So, this book was dedicated to your dad, your father, you write, for teaching me the game. Don't move until you see it. What does that mean?

1:06 That's a Bobby Fischer quote. So, there's an old uh there's a movie called Searching for Bobby Fischer. I mean, the quote is not from Bobby Fisher. It's from the movie Searching for Bobby Fisher. And in the in there, he says, "Don't move till you'll see it." And so, my dad I'd never seen the movie as a kid. My dad would always say that. And then I we eventually watched the movie together as I got a little older. And so, you know, he just taught me chess early on. I think it actually had a huge impact on my development and how I think about things and, you know, thinking about, you know, stages and how your strategy has to change over time.

1:33 There's a lot of elements of chess that are similar to the wealth ladder in the book. But I don't I didn't go into all of them in the book cuz they would have probably bored people to death with, you know, chess analogies, but uh I think there's a lot of parallels between chess and life and a lot of things like that. So, um that's why I kind of dedicated to him. Well, when you were five years old, your dad had you play chess against his friends, and I'm curious what you learned about life from those games of chess where you would dominate these adults when you were 5 years old.

2:04 I mean, it was just interesting because it made me realize that like, you know, I'm obviously only five and so I don't know a lot. I don't have many deep realizations that age, but like I could beat them not because I was smarter than them, only because I had practiced something. That was it. like there's no way I was smarter than his friends. Just 0% chance. I had more knowledge. I knew anything about the world. You know, I'm 5 6 years old, but in this very specific realm, in this specific game, I could beat them. And I wasn't a chess prodigy, as I say in the book, like I was just better. Like, you have no skill, I could beat you basically, right? So, if you basically just know how the how the pieces move and that's it, like I could beat you. But I think that was the big takeaway there is like you can learn something and outperform people even if you know they're better than you at every other thing. you can just still

2:47 you can still uh out compete them. What have you taken from that experience of this realization that I've got more repetitions than everybody else there? I'm not necessarily smarter than them, but I've practiced more. I've worked harder at the craft and that's why I'm winning. What have you taken from that key learning that has helped you in other elements of your life? I think the thing for me is like I've done all that, you know, all the standardized tests I've ever taken, IQ tests, whatever, put me like the 90th percentile, which is good. Don't get me wrong. The 90th percentile is a a massive advantage to have that, you know, intelligence since I was young.

3:22 But I'm not at the 99th percentile. And I'm still out competing some people at the 99th percentile, right? Which is crazy. And it's only because, you know, I've put in the reps. Like for example, in writing, like there's so many writers out there that are so much smarter than me. So many of them, right? and I've still built an audience and had a lot of sales and done well in that only because I've just been doing it for so much longer. I think people just because people are very smart, they think they can go and write a book and sell a bunch of books and it doesn't always happen that way, right? And so that's an example where like I've been writing for nine years and I wasn't necessarily the best writer when I started, but I just got better because I I spend 10 hours a week every single week for as I said almost a decade now and that helps over time. So that's kind of the big thing I've taken away from that.

4:02 So you have a day job too. You're not just a writer. Writing writing is something you do in addition to working. And I think because Nick, I push every leader I work with to write. I They don't have to publish. I love it if they do. They don't have to,

4:15 but I urge them to at least have a writing practice because it's it's such an amazing tool for clarity. You don't fully know what you think about something until you get those words out of your head onto the page. How do you balance out your writing practice, which you've done for a long time, and it's definitely benefited you in big ways. It's created opportunities, book deals, everything, right? It's part of the reason why we're talking, but also with the fact that that you're you have a full-time job. Like, how do you balance those things?

4:43 So, I write basically every weekend. And so, like, you know, historically, I usually did it on Sundays. So, that was my quote church, so to speak, was writing. And so, I, you know, spend the 5 10 hours every single weekend and doing that. And then my job, thankfully, you know, I work market hours, you know, so I'm I'm at a investment management firm. And so, you know, we basically work 9 to5. And so yes, there are nights where you have to work beyond that, but for the most part, you know, it's not a super high stress job. So because of that, you know, there's a lot of balance there and allows me to kind of do the writing and everything else. If I was in a different role, I think it would be tougher or I would just have to find more time on the weekends and things like that to do it. So,

5:17 and the writing is actually what earned you the job or helped you earn the job.

5:21 Yeah. Well, not the job necessarily, but they got it it got me noticed, right? So, I'm a I came in as a data scientist at Roltz Wealth Management and they only found out about me through my writing where I'm kind of talking about data, showing charts and all these types of things and as I showed all that like they like my writing and so we kind of talked and stuff and we realized that there could be a fit maybe I could help them on the operations side and so over time I came in as a data scientist. I started doing more and more stuff and now I'm the COO of the firm. So I help with operations and thinking about efficiency and how do we scale our practice and everything and still provide the the best service we can for clients.

5:56 What does a data scientist do? Uh depends which there's different types of data scientists. It could be as simple as like a business analyst where you're in Excel and you're just analyzing whatever data you have if you're a manufacturer or you're a wealth management firm etc. Or it can be as advanced as doing really deep you know machine learning and stuff like that. And that's even that's even evolving as we speak with AI and everything cuz now AI is kind of taking over a lot of this stuff. But it's a whole spectrum of just I what I like to think about is like business intelligence. What information can I find about our business that helps the leaders of the business make better decisions? Like oh should we expand into this? Should we how do we assign leads to to advisors, right? And what's the close rate like you know compensation?

6:39 All these types of different things are all interrelated. But I think data can help you make better decisions as a result. So this is interesting. Okay, I want to work through this question, but I worked until I left corporate America. My job was as a sales rep and then a manager, director, and VP of sales. And so like it was very black and white on how I could add value to my company. Bring in the money, right? Bring in the money. when you have a job that's not that black and white and maybe a as a data scientist that could we could use that as uh our example, but there are plenty other jobs like that where it's not as black and white as how much money did you bring in for the firm or for the company? How do you ensure you're adding value? How do you ensure you're providing more for the place that you work than what they're giving you?

7:29 Because I think that's how we continue to rise up within companies. That's how we get promoted. That's how we build a really great career is to add more value than we take. Right. So, how do you do that in a job like a data scientist or something else like that where there it's not so black and white as how much money did you bring in for the company?

7:47 Yeah. I think the thing to think about here is like what are the things that are actually getting accomplished that wouldn't be accomplished if you weren't there. And so I can give an example of something very simple like

7:59 let's say our the CCO at my firm has to review all this data and she would have to review it you know one you know one document at a time or something. If I can write a program that imports all these PDFs or documents you know puts them into some sort of readable data table and then summarizes it for her and gives it to her. I've now saved our CCO maybe five six hours a time. And if I'm doing that once a month, okay, that adds up. Now that's just that's just one program I wrote for one specific task. Now do that across multiple tasks over time. You can see it's about time savings, right? How do I save our operations team time? How do I save our compliance team time, our advisers time, etc. So the thing if I'm giving an analogy like if you imagine a wealth management firm is a boat, right? Like the CEO is kind of telling you telling us where to go like the advisers and the ops team are the ones who are rowing or

8:46 kind of pushing us forward, right? Like what is the COO doing? I'm designing better ores, right? I'm designing things that'll give us like 10% more efficiency with every time we row or something like that, right? And so that's kind of the the thinking I have behind it. And so I agree it's not easy to show, but I'm going to say, okay, let's say you wanted to go out into the market and hire this person that that does this part of the role, and then you had to hire this person, had to hire this person. Like these are all the things I do. And so that's kind of how I try and come up with a a approximate value. And of course, it's never perfect. You have to kind of try your best at this stuff, but that's how I try to show values. like look at how much time I'm saving all these people if you add it all up like this is how much you'd have to pay for that or they would have to work extra and maybe not enjoy their job as much

9:28 etc or just anecdotally that that CCO or the others saying oh my goodness I didn't think this was possible to have the thing Nick did that saved me this much time that's a lifecher that is a pure value added resource you want to be that person at your place of work if it's again if it's not as black and white as like a lot of the jobs that I Okay, I want to get into the wealth ladder because I was looking at through the levels and then some of the questions and I I think it's like a really interesting way to view wealth. Not surprising. I'm a big of dollars and data fan. You know, I told you that last time we talked and just keep buying. And by the way, since we talked, I've just kept buying and better off for it. Uh hopefully everyone else has too because we're all better off if we have since the last time we talked. But wealth ladder there's there's six levels and I'd love at least to start at a high

10:19 level. What are these levels? What are the six levels of wealth? So this is based on net worth. And so that's just as a quick reminder that's all of your assets. So that's everything you own, right? Your stocks, cash, house, you know, car, etc. Minus everything you owe to others. So assets minus liabilities, right? So your liabilities would be your debt, you know, any student loan debt, your mortgage, credit card, etc. So if you take those assets minus liabilities, you get your net worth, right? And then based on your net worth, you would fall into one of the six levels, right? And the thing about the levels is they're all just a factor of 10. So multiply by 10 to go up a level or divide by 10 to go down. And so I'll walk through that briefly. Level one is less than $10,000 in net worth. Level two is $10,000 to $100,000.

11:06 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 lastly, level six is over $100 million. So, if you just memorize one of these levels, I just memorized like level three is $100,000 to a million, which is your typical US middle class. And I can get into the data on that. If you just memorize that, you can back out the rest from there. But every single level has a different strategy. It's a different way of thinking about your income, spending, investments, etc.

11:34 And so that's what I kind of walk through in the book. And I think because of these large, you know, 10x changes, there actually are pretty big strategy changes you might need to make if you want to keep leveling up, so to speak.

11:45 Let's say you're in level three. Mhm. And you're you're you look like you you may get to level four or five, right? How does the strategy change? Like can you just share some examples? Because some people would say, "Hey, just keep just keep investing, just keep buying, right? Maybe you throw some real estate in there, like as you make a little bit more money, maybe you can go on better vacations. 529s are all good to go for your kids and all that. How do things really change that much as you just progress through the levels? What strategies change? Some specific examples as you you grow your wealth?

12:19 I'm glad you asked this question because you said, you know, oh yeah, level three, you're going to get to level four or level five. I actually think if you're in level three and you're some people in level three are on their way to level four and it's just going to take time, right? Time is a big factor here. For the record, level four is $1 million to $10 million. And the median US household age of though all households in level four, which is 1 to10 million, is 62 years old. So if you took all the people of $1 to $10 million, put them in a room, and then you took the middle age, that person is 62 years old. So time is a big factor here. But that's not the only factor, right? So even if you're in level three, you're saving, investing, okay, yeah, you can go and get to level four. But once you get to level four, like that same strategy is very unlikely to get you to level five. And I talk about this

13:02 a little bit in level four. And let me just do some math with you. Let's say you just made it to level four. You have a million dollar in wealth. Let's just assume it's all in a portfolio to make it easy, right? You have a million bucks. Let's say you're saving $100,000 a year after a tax, which is a decent amount of money. I mean, it's a lot of money actually to save as well. And you're earning 5% a year, right? How long would it take you to get to 10 million? How long would it take you to get to level five? The answer is 28 years. That's after you've already hit this huge milestone. You made it to level four and it's still going to take you 28 years. You're like, "Well, Nick, you know what? I'm going to supercharge my income. I'm going to save $300,000 a year, right? That's a lot of money to save after tax money." Okay, even if you're saving 300k a year, you start with a million, 5% a year, it still

13:45 takes you 17 years to get to level five. So once you do the math on this, the strategy that you use to get into level four is not going to be the strategy that gets you out. So it's not just time. Yes, time does matter, but by the time you get to level four, do you want to keep grinding for that long and for another, let's say, 17 years while you're making probably close to a million bucks a year and you know after your spending and tax and everything, you're only saving you're saving 300k, right? So it's like, do you want to do that for another few decades? Probably not. So the only way to get into level five is you have to probably have a different strategy. And we can kind of get what what do you mean? What what type of strategy? We can definitely get into that.

14:22 Well, let's get into it. I think a lot of people listening and we can identify from this level and and wanting to grow.

14:28 Yeah. So, if you're trying to get to level five, like over besides like athletes or celebrities, entertainers who have very very high incomes, the vast majority of people in level five, which is 10 million to 100 million or level six, are entrepreneurs. They're business owners that sold a business or have a business that's worth a lot of money, right? That's I mean you're talking you know tens of millions of dollars if not hundreds of millions of dollars, right? And they usually sell that business and then after they liquidate they're in level five, right?

14:54 Or the business is worth enough so that they're in level five. So as you can see the the actions you would take to get to level three and four, save, invest, have a good job, all those types of things are very different than the actions of someone who's typically in level five, which is, oh, I need to start my own business. I need to own the equity and all the income and then I need to grow it to a point where I'm bringing so much income or the business is worth so much that I'm technically in level five. So you can see those are very different things, right? You can be, you know, have an amazing 9 to5 making, you know, very very decent in the six figures and still just never be able to get out of level four. And this kind of brings up a bigger philosophical point, which is do you even want to get out of level four?

15:33 Do you need to? I don't think anyone needs to. I think the the rational response for an American household once they get into level four is like, hey, you know, my my job isn't really making as much of an impact on on my wealth as it used to. So money isn't as, you know, valuable in that sense, right? So because of that, maybe I take my foot off the gas and I just enjoy life more and I don't worry as much about accumulating as much money as I can, right? I mean, if you do if you do the math, if you're saving 100k a year and you have a million dollars, you're impacting your wealth by about 10%, right? 100,000 over a million is about 10%. Right? By the time you get to $5 million, that's only 2%. So your wealth swing every year from your saving is only going to be 2% when it used to be 10%. Right? And so as you get deeper into level four, it's just it makes less and less of an impact, right? And I

16:16 think a tweet will summarize this pretty well. Like I saw this tweet that was like, if your investment portfolio makes more than your job, is your job a side hustle? which is kind of a funny joke, but like it's the it's getting at the point which is like at some point you're like, why am I doing all this for money when I have so much money already that's earning me money that maybe I can do something else or enjoy life more, etc. So, I think a lot of people get into level four and they rationally say, "Hey, you know what? I don't need to I don't need more money than this. I can chill out a little bit." And I think that's actually the the correct approach, but we can debate

16:47 the equity element. I've heard somebody say, I'm you I'm sure you've read this all over, salary is for expenses, equity is for wealth. I think when you say that, that may turn people off because they're like, dude, I'm not starting a business. I don't really I mean, maybe I have some RSUs or I get some options if I'm depending on where I'm going. That's the maximum of of ownership or equity that people are getting. And so, some would say that doesn't make me feel good. I mean, maybe it's not supposed to make you feel good, but like they they may not relate to that part of it because they're just not I've started my own business and I've certainly learned all of the benefits, I guess, of of doing so from from doing this years ago.

17:29 And it's awesome. Now, super hard at the beginning, no guarantees, a lot of risk and downside and things that could have went bad. It's still good. But for the person who's like, "Dude, I have a really good job. I don't have really any equity." maybe they get some of those like ghost stock or whatever they call it at companies and um in addition to to the the more startupy options type things. What do you say to those people?

17:51 I'm saying you have two options. You either you know you either start your own business or you can also join a startup early and get equity and then if it grows like there's a lot of people that were you know at Nvidia early enough or even very recently and well Nvidia is kind of an exception cuz it got super super big but you get my point. You either start a business or you get early in a business and get enough equity and then it gets very large. So you either do that or you just accept, hey, I'm not going to make it to level five and there's nothing wrong with that and I can just be content where I am. It's kind of the Jack Bogle, you know, enough, right? Is do you have enough yet basically? And so I think those are your options. You either accept you're going to be stuck in level four forever, which is not a bad thing.

18:26 I'm just saying it's a reality. Just accept it and move on. Or you you know make a big change like that. That's that's what a lot of these things are and every level like you have to make some decisions like do I want to stay here or do I need to make a a significant change in my strategy to move myself into a different you know level.

18:45 Yeah. What about you? Like how do you view it? How are you approaching this? I'd love to if you shared the level you're currently at and where you're striving for. I think that would be awesome.

18:54 Yeah. So I do I do talk about in the book, right? So I'm in level four. Uh just very recently I got into level four. And so my my goal is to, you know, keep working, keep doing my thing. I'm not I have no goal to get into level five. I have no interest in starting a business. But I think at some point, you know, however many years from now, I don't know how many years, right? My goal would probably be to kind of slow things down a little bit and do more of the coastfire thing where maybe I maybe at my firm I take a step back and say, "Hey, I can still do these roles, but I need someone else to kind of take this more high stress role and kind of take this over for me." And I take more of a research role or a content role. I have no idea. here. And this is not something I'm thinking about right now, but this is something like 5 10 years down the line, probably closer to 10 years if I'm being honest, where I'm like, "Hey, you

19:36 know, I've done this. I got kids, younger kids. Maybe I can start doing all that cuz, you know, I just got married. We'll probably start having kids in the next few years, you know, God willing." And we go from there, basically. So,

19:47 so you don't have giant ambitions to make $100 million or to be worth $100 million. That's you and your new wife. You're not That's not like important to you guys.

19:56 No, not at all. I I actually think my life would actually possibly get worse if I went went down that route because I would have to do a lot.

20:05 I would have to do so much. I would be like, you know, I work at this great firm. I love working with them. We're, you know, you know, we're like a content family. Do so much together. I'd be like, "Hey guys, sorry. Screw you guys. I'm doing my own thing. So, I got to do that first, which I don't want to do." Then I got to like go and figure out this business I'm going to create that's going to make me all this money, right? That's already stressful. Like, what am I going to do? I don't even know what it is, right? There's all these layers of things that are very uncomfortable and things that I don't care about the upsides that much. Like I don't care about flying private or having a mega yacht or all those things. Like I can already go to any restaurant I want. I can travel basically anywhere in the world. I can't always, you know, travel first class anywhere in the world all the time, right? But like I could in

20:42 theory upgrade to a business class seat, right? So it's like there's not that many things that I want to buy with my money that I can't already buy with my money, right? And so, you know, outside of real estate, that's probably the only thing. And right now I'm renting and it's great. And you know, when you look at the real estate market, it doesn't really make sense to buy necessarily in a certain high cost of living areas. But I'm I'm I'm losing my point here. My point is I don't need to do any of that stuff. So, you know, I I would just happy in level four, keep doing my thing, and go from there. And I didn't grow up with money, right? I grew up, I would say, in level two, and so in a level two family. So, I have no interest in getting to level five, six, etc. If it happens, great. But I'm not going to specifically go out of my way to try and create that.

21:24 What did the conversation sound like with your fiance now wife about money, about wealth, about ambition? These are important things to talk about. I'm just curious to to go inside what those conversations sounded like.

21:39 I think early on um well I first off she didn't know before we were married. She didn't really know how, you know, how much wealth I had or anything. I didn't know how much she had. And so we kind of eventually had this conversation obviously before we got married and we kind of looked through everything and we're like, "Yeah, we're doing fine. Like we're very we're very young. We're, you know, I've been very fortunate in a lot of reasons." And so because of that, like I don't we don't need to stress about a lot of this stuff. Like she gets very she can get very stressed about certain things with money. I'm like like baby don't worry about it. It's like we can pay for it. It's not a big deal.

22:06 Like I think that's where a lot of that tension comes from is just you grow up with a certain lifestyle and a certain level of frugality and she's much more frugal than I am. And so because of that, like I'm trying to get her to like relax a little bit more and yes, we can we can spend money on this. It's not a big deal. Okay, that cost $20. We don't need to go back to the store to return it. If you don't love it, it's not the end of the world. Like it's only 20 bucks. It's going to cost us more in our time and energy to go out there versus just, you know, writing it off as a loss, so to speak, you know.

22:35 Yeah. Thinking about saving. Okay. Um and and and my parents are this way. They've done a really good job of being frugal and saving a ton. And my dad retired at 60. My mom stayed home with us and so he's been they they've both been enjoying golf, a house in Florida, another one in Ohio, like doing their thing. And there's this stat though, I don't know the percentage, but a high percentage of people kind of like them. They end up living for 20, 30 years into retirement and die with more money than they had when they retired, right? And so part of part like knowing that they're that way and so many others are that way, it actually makes me want to spend more money, go on better vacations, like bigger ski trips or whatever because I'm kind of like that's I'm wired like that too and I almost have to push it out. What do you think about that? that so many people end up with a ton of money when they could have

23:34 maybe spent it and made parts of their life bigger and grander and potentially like more enjoyable.

23:41 That's the whole Bill Perkins die with zero thing and I think that's directionally I think that book is accurate. I don't think you should try to die with zero. I think it's very difficult. I bet Bill Perkins is going to die with quite a few million dollars but I think he's going to die closer to zero which I think is the correct approach. Right.

23:57 It's hard to know. You don't know when you're going to die. So, of course, of course,

24:01 but you're you're trying to die closer to zero is probably the the directionally the correct approach. And I actually have a a funny study about that. So, Michael Kitsy's looked at like retirement portfolios and this is just historical analysis, right? And if you started, let's say, with a million dollars, doesn't the amount doesn't matter, but let's just say you followed like the 4% rule, pulling, you know, 4% a year, adjusting for inflation, you are more likely to end up with four times your money than less than your starting portfolio value, right? Following that approach, right? Like you're you're basically equally likely, but it's slightly more likely to end up with four times your money after 30 years than if you had than below what you started at.

24:38 So you started a million, you're more likely 30 years later after doing the 4% rule and everything, you're more likely to have, you know, $4 million than you are to have under a million, which is exactly your point. The data shows it. There's people not spending enough. I think when you ask retirees, oh, why don't you spend more on all this? They'll say, I don't need to. It's not going to make me happier. It's all this. And maybe that's true for some of them, but I think some of them, too, could loosen up a little and say, hey, maybe I can get a a nicer seat. I can get a business class seat instead of a coach seat. Just because your whole life you flew coach doesn't mean you have to fly coach later. I mean, I don't know. It's all comfort. It's what you care about and maybe some people want to leave more to their heirs. It's up to them. I have I don't try to criticize how people spend their money, but I do agree with

25:14 you that people are probably not spending enough at certain points in Well, and part of Bill's Bill Perkins stuff, he was on this podcast talking about it is like I I have a healthy able body to go climb mountains and ski and do all those things. I may not later. And so the I think part of the point is is like spend it when you can still climb big mountains in Zion National Park or go ski in Big Sky. You and do things like that because you you never know. You may not be able to do that. So why not spend it now uh to basically use the hard work that turns into money and then turn that money into amazing experiences with people you love. I think that's like the that's what I'm trying to do, but it's it's harder for somebody who is grew up and is naturally like a saver and wants to save for the future. It's like a tough balance.

26:08 Yeah. I think that's also the thing that, you know, my wife and I talk about. I'm like, hey, like we, you know, we're only going to be able to do these things once. She was like worried about, oh, this expense of the wedding or that or this is this dress too much. I'm like, hey, we just get it. We're only doing this once. We're not doing a full wedding. Like we did a full-on wedding and everything. We had a much smaller wedding. We did a full-on wedding. It would cost like $100,000, right? like we're not doing any of that. We're doing a much smaller kind of boutique wedding.

26:27 So like we can kind of go above and beyond for things because it's still not going to close any cost anywhere near what a much larger wedding would cost.

26:34 Yeah. I want to fast forward to later in in your book about the money buying happiness thought goes back and forth. You talk about a lot of the research done with this. There there used to be thoughts of you get to a certain amount and then above that it doesn't really go up much and then somebody disputed that and you've kind of gone back and forth on that and that's what you cover. But at a high level, how does money impact happiness? The general takeaway after looking at all the studies on income and wealth is that if you're happy already, more money will make you happier. If you're poor, more money will likely make you happier.

27:18 But if you aren't poor and you aren't happy, more money is not going to do a thing.

27:22 And so I think that is the summary of all the data we've seen. And so for example, the figure that's thrown around is the $75,000 in income, you know, which that that famous paper which basically says, hey, after $75,000, happiness, you know, doesn't keep increasing. They actually looked into it a little bit more after like in another paper another guy names Killingsworth came in which is what I talk about in the book and they realized that they weren't measuring happiness they were measuring unhappiness. So basically unhappiness doesn't fall it's kind of a weird double negative unhappiness doesn't fall above $75,000. So once you're above $75,000, like you can still be unhappy basically. But when you actually look at a true measure of happiness, like it keeps going up over time, but it usually has to have a what's, you know, called a log step or like a multiple increase in your income or your wealth to see that, which is why

28:10 I think the wealth ladder is useful. It's like the a large 2x or 5x or 10x jump in wealth would actually make you happier, assuming you're already happy, right? So that's the one takeaway here is if you're already happy, you'll probably be happier if you have more money. But, you know, it it also requires a much bigger step to keep getting more happiness.

28:29 Well, and part of it too is there's trade-offs to everything in life and there are sacrifices that need to be made and for everything in life if you want to in sports if you want to win, right? For the most part, you got to be overprepared and work insanely hard and bounce back from resilient like from adversity and be resilient. And there's a cost to all that. It takes time. It takes effort. It takes you away from other people in your life. And the same thing could be said for potentially earning more money. And you've heard these stories of these super rich guys that speak to like the younger generation and say, "Do not do what I did. Don't do it the way I did it where I was on the road all the time. I wasn't home. It cost me family. It cost, you know, that type of thing." So, it's like figuring out what's the level you need to get to and what are you willing to sacrifice? What are you willing to get? What's it going

29:21 to take in order to to get there and is it worth it? I feel like that's what the wealth ladder is helpful for readers as well is what is it going to take and what are you doing it for? And and sometimes I think people don't actually stop and think what am I doing this for? What am I striving for? What am I trying to do to get all this money to do what I think it's worth it to be much more thoughtful about this?

29:42 Yeah. I think the big takeaway for me as I was writing the book was realizing when you're in like the lower part of the wealth ladder, let's say level one, most your problems are money problems, right? If you had more money, if you're in level one less than $10,000, if you had more money, you would solve a lot of your problems. But as you go further and further up the ladder, money becomes fewer and fewer problems is can be solved by money, right? And so as a result of that, you know, you realize that like it's all the other parts of your life, the non-financial aspects which get amplified as you move up the wealth ladder because you can't buy them. You can't write your kids your a check. You can't write your wife a check and say, "Love me." You know, you can't you can't buy yourself a new cardiovascular system, at least not yet, you know? So the whole idea is like money is useful, don't get me wrong, but

30:28 it's a certain point like it's not tradable for the other types of things that are important in life. So where that enough level is is going to vary a lot based on like the cost of living and where you want to live based on you know obviously the society you're in right I always say like I think in America because it's a little bit more expensive because healthc care is more expensive etc. I think level four is the place to be where you don't have as many of the sacrifices and the the crazy you know downsides of money on the on the high end but you also have enough to feel secure. I think in places like Europe, you can be in level three because the social safety net is so much bigger. You don't need as much money, right, for that type of thing. So, it really depends where you live, what your lifestyle, what you want out of life, right? If you want to fly private, I'm sorry, level four is not going to do it

31:09 for you, right? So, you got to get to level five. So, just thinking about that, I think as you figure those things out, then you can make better decisions for where you want to be.

31:18 Yeah. You said to me before we were recording, the most expensive thing people own is their ego. Can you go deeper on that quote? Yeah, I think it really I mean it applies in to so many different aspects of life, but certain people, you know, if you want to look a certain way and you want to like portray a certain image to the world, it can be very costly to do that. I think the biggest difference between people in level three, which is, you know, $100,000 to a million dollars in wealth, and people in level four, which is $1 million to $10 million in wealth, isn't actually that large. There's not that many big differences. Like, yes, people in level four probably live in a nicer neighborhood. They probably sit in a better seat on the airplane, right? They maybe eat slightly nicer food from the grocery store if that, but like for the most part, their lifestyles are very much the same, right? And you know, they

32:02 might have a slightly nicer job, but you know, people in level three that want to look like people in level four end up spending so much money to like keep up with the Joneses type thing. And that's why I say that's your ego. That's just your ego coming in there, right? And if you didn't spend like that, it might be a little bit easier to acquire the wealth to actually get into level four, which is the the irony here. And there's some data to show that, which I discuss in the book. But, you know, that's the thing I think about when I'm I'm trying to figure out like, you know, what how does ego matter and how does it impact, you know, what decisions you make? Once you're in level five and six, I think ego shows up by you staying overconentrated in your business. And so, if something were to happen to your business, you could lose all your wealth. We've seen this happen so many times where people go from billionaires

32:39 to bankrupt overnight, you know, and so it's one of those things where like, why didn't they diversify? Why didn't they do all these things that they could have done to protect some of their wealth? They didn't do it because ego, I think, is at the end of the day rules a lot of us, unfortunately. I've seen these stories as I've progressed in my career and the business of people who do really well and then maybe they sell and they have a big exit and then they get depressed. They don't have a mission anymore. They have tons of money, but it literally doesn't matter because they don't feel like they their purpose may be gone and they struggle and they try to start something new maybe and it doesn't really work and they're like, "Oh my god." And and it goes really really bad. And I'm just curious from all your study of money and wealth and different levels, if somebody came to you privately like, "Nick, dude, I

33:28 thought I would be so pumped. I got acquired and now I'm completely free. I can do literally whatever I want, never have to make another dollar." And they're depressed beyond belief. How would you help someone like that?

33:41 I would probably think about framing it in terms of a game. like they came up with a game for themselves to play and that game was building their business. They did the game very well. Like I maybe early on, I'm guessing it wasn't easy. It was a very difficult game. They mastered it. They got better. They basically kind of won the game. And then after beating that game, they were basically given the freedom to, hey, choose any game you want. And there's so many games now you can play that it's overwhelming. You know, you get the the paradox of choice, right? Like what do I do now, right? And because of that, it can be it's very easy to look at the world and say, "I don't know what to do." And then you just get depressed instead of would they have been happier if they just stayed in their game?

34:20 Possibly. You know, you you don't know the future. At the same time, they could have stayed in that game and kept playing it and something changes in the business industry and they lose it all and they said, "Oh, I wish I had just sold at the time." You know, I there's so many people in the late 90s that wish they had, you know, that didn't sell in the late 90s and are kicking themselves as the people that sold in the late '9s or sold at another point and, you know, the business kept growing, right? So, I see both sides of the coin and I think it's one of those things where it's hard to know the future and it's very easy to would a should have could have and it's only you're only coming up with the the the reaction after the fact, right? Like cuz for all you know, some some people could sell their business and like, oh, you know what? I've always wanted to start a charity, a dog rescue or something, and

35:00 now they go open a dog rescue and they're happier than ever, right? And they have the resources to do that, right? That's an example where someone could use their money to do something else and they'd be very satisfied. But not everyone's going to have that other thing that they come across.

35:12 Yeah. I just think it's so much of it is purpose. What is your purpose? What is the reason that you're creating for yourself to get up and get after it each day? If you're the type of person that could build a business like that and do something that grand, employ people, have a big exit, I just think it's very very hard for them to just chill out on the beach. They could do that for a few days and they're like, "Wait a second." And you see it a lot. And I think that's something for all of us to think about. There's another part towards the end called the great enhancer that you write about. And I love the analogy of of the fact that salt being added if you're like cooking, it's not a spice, it's a mineral. It actually works as an enhancer of the existing flavors and like salt can do that to our food and money can do that to our lives. How can money work as the great enhancer much like salt does for our food.

36:07 Yeah. So you explained it great like the idea is you know you could have this amazing you know dish but if you didn't salt it at all like it may not taste as amazing right? You could have done everything right, but that little bit of salt there really makes the difference, right? You you've you've tasted or you had something like, "Oh, can I add some?" Oh, wow. That tastes so much better. Even though literally the same dish, all I did was add salt. If you eat salt by itself, it's not really that appetizing. You're not be like, "Oh my god, this is incredible." No, you would never say that. It just enhances all the other flavors. I think the same thing is true with money, right? Like money by itself is useless, right? Without friends, family, without your health, without all these other things, it doesn't add much, right? You could, it's like having a plate of salt and no food to eat it with, right? So, it's a great

36:47 enhancer because I think it's the thing that can amplify all the other parts of your life, right? Like, oh, I like hanging with my friends. Wouldn't it be cool to hang with my friends at a concert or we could rent a private venue and have a nice dinner? Like, it the more money you have, the more you can kind of do these types of things that you couldn't have done if you didn't have money, right? And so, I think it enhances all the other parts of life, but by itself, it's not really that useful, right? Besides just pure survival, obviously. So, just something to think about. And I think it was what I realized as I'm kind of looking through the ladder and kind of walking up the steps and writing about each level. I'm like, you know what? This thing is kind of like salt in that way.

37:20 And I know it's a it's a weird analogy, but I think it it actually fits here. One of the uh blog posts you had of Dollars and Data recently talked about uh this is a little bit separate from the book, but I think it still could be helpful. Talked about how you and your wife manage your money. And you talk about these different styles, this separate plus joint method. Can you walk through the different styles of how married people could manage their money together, separately, separate and together? I thought that was really interesting piece and could help a lot of people.

37:56 Yeah. So, I know couples that do everything separately. They have their own accounts. They never have had a joint account and they say, "Okay, you pay for this, I pay for that, or let's pay for it together or vice versa." I know people that kind of keep those things separate. I know people that have everything in a joint account. They put all of their money in there. All their credit cards are in there. All their money sitting in there. You know, god forbid they ever get divorced. It's a huge mess dividing the assets. It's such a problem. And so I was like, is there a better way for this, right? Obviously, you want some sort of joint thing that's like a shared expenses, right? And so you want us to, you know, in theory share those. And then you also want each individual to kind of have some of their own money for for whatever reason. And I think this is especially important for women where, you know, historically

38:36 women didn't even have access, have the ability to have a bank account or have property or anything. And I think that could have kept them in relationships that were maybe abusive or where they didn't feel like they had their own power, independence to kind of go and leave, right? They were like, I don't have any money. What am I supposed to do? I can't leave, right? So, I think especially in today's day and age, like everyone needs to have their own accounts. They need to have their own money. So, my thinking behind it is like you pull all your resources into your joint account, like your income, your future income, right? Everything before the marriage in theory is split separately in your separate accounts etc. But once you're married, all that income goes into the same account. Any credit cards or payments come out of that account. Let's ideally hope you have a positive surplus over time. So

39:15 you're saving money, right? If not, that's a different debacle. But let's just assume you're saving money. And then periodically, every few months, once a year, whatever you and your spouse decide, you take the excess over some amount. Let's say you keep $10,000 and there's like working capital for credit cards and other expenses. Anything above that, you say, "Hey, we're going to split it." So, let's say you start the year, there's $10,000 in your account. By the end of the year, let's say there's 30,000 in the account.

39:40 You say, "Okay, we're going to take the 20, split it. I take 10, my spouse takes 10. There you go." And then the next year, you do that again. And right? And so then that money is kind of always being quote split over time. And it makes it really easy for like division of property that's not a mess at the end. And of course, I'm not saying that, you know, I'm this is not a a legal advice. Obviously, a lawyer might not agree with all this, but I think it's very fair. It's and you can track everything and look, all the money came in. We paid for everything equally. And at the very end, it's almost kind of like you're always splitting your assets. So, it's you don't have to worry as much about that. Now, of course, what about shared assets? If you go and want to buy a property, well, then both you and your spouse have to contribute money into the joint account to then pay for a down payment, closing costs, etc. And

40:19 then yes, you can't split that house in the same way like you would any other asset, but it's just a way of kind of over time always being fair and equitable to both you and your spouse and also allowing kind of some financial independence. So if my wife's like, you know what, I want this $5,000 handbag, I'm like, okay, go use your separate money. Like if I don't want to pay for the handbag and I don't think it's something that we're paying as a as a joint thing, like you can use your separate money on whatever you want, just like I have the freedom to do that, too. But if you're using the joint money, we have to kind of agree on certain things and we have an amount.

40:50 The amount doesn't really matter, but let's say it was $1,000. Like anything below a,000 bucks, you want to buy it, go ahead. No questions asked. Above a,000, you want to use joint money. We have to talk about it. So, there's just different methods and ways I've I've put out there. And so, yeah, obviously I'm I'm newly married. We've only been we we were technically were doing this before we were married. We had a joint account and everything, but the whole point is we've been trying it. It works. I've gotten a lot of feedback on this. I talked to a lot of different couples about this and they've generally been positive of it because it it allows the independence while also giving some sort of collaboration there as well.

41:20 Yeah, super useful. How about how you save slashinvest? What's your has anything changed since just keep buying? I know I'm sure you're just you're continuing to buy, but what is your strategy overall personally for saving slashinvesting? Yeah. So the mantra in just keep buying was the continual purchase of a diverse set of incomeroucing assets. And I'll say that one more time. The continual purchase of a diverse set of income producing assets. That has not changed at all. 95% of my net worth is in income producing assets. Only 5% is not in non-income producing assets. Um I'm still renting. As I said, I don't own a home. Everything's in financial securities of one sort or another or some sort of cash. But yeah, no, nothing's changed. I mean, if anything, I probably sold out of some like illlquid less like non-income producing assets. I had some art. I I still own some art, but I had some other art that

42:12 I sold. And so, I've kind of just put that all into income producing assets, just something with more liquidity that's also income producing. So, that's probably the only real change, but it's that's very minor. In the grand scheme of things, it's like a few percentage points of my net worth. So, I I haven't changed anything. I I don't sell I don't sell assets. I just I literally just keep buying them. I know it's a I'm not just trying to, you know, push my book, but that's outside of outside of rebalancing, which I sometimes have to sell something. Most of the time, I'm just taking my new money and just putting it into the underweight asset.

42:39 So, I never even have to sell things when I rebalance. I'm just buying the underweight thing to kind of bring everything back into line, right? Rebalance through. I call it an accumulation rebalance. But yeah, that's the idea is I I keep doing that. I have no changes to that. And don't get one one day I'm telling you that the US stocks are not going to do well over some decade in the future. And I'm like, "Oh, Nick was wrong. I told you." Like, dude, this is history. I know it's going to happen. I'm telling you, it's going to happen. It's happened before. It's happened, you know, in the 30s, the '7s to in the 2000s. It's going to happen again. Don't say I'm an idiot when it happens. I've been saying you should follow history and it's worked since I first talked about in 2017. There will be periods where it will not quote work, but it will eventually come back. So, that's what the history shows and I I

43:18 believe in that. And yeah, I'm gonna follow that. How how automated is that process for you?

43:24 401k is all automated. So that stuff's going in and then as we kind of I'm doing everything kind of quarterly because I have a business with the books and everything. So that kind of those big distributions happen quarterly and now with obviously my spouse and the joint money we put everything in and then then quarterly we send each other you know we basically take the joint and split out that distribution. We then invest it as as we see fit. Usually we always separate separate investments.

43:48 All our invest Yeah. All of our money we don't have a joint investment account. Everything's separate right now will

43:53 No, probably never. I don't I don't think why we would cuz once again this is once we do the distribution like that money is ours. It's separate assets and if we need to buy a house we would just sell our separate assets and put it back into the joint account. So there's no reason I would see for us to ever have a joint investment outside of our primary residence, right? Like and I don't even consider that an investment in the traditional sense. It's a more of a consumption good.

44:14 You wouldn't say like hey I'm saving slashinvesting for our future. What's up? Like you're buying $5,000 handbags. Like wouldn't that cause some issues? No, she can do it's her money, right? What am I I'm of course I'm invested though. You know, it's different because you're married now.

44:29 Yeah, but it's her assets. If she wants to blow through all of her assets, that's fine. But then she's like, "Oh, I want us to buy a house." I'm like, "Do you have you just blew through all your assets? Like, how are we going to buy a house when you're doing that?" Like, I'm just saying she wouldn't do she wouldn't do that. Like, I wouldn't pick a wife that does that, but I'm just in hypothetical. I'm like, "Okay, if you want to do that, you can, but then like oh, you also want a house. Why did you buy all these handbag?" You know what I'm saying? Like I'm happy to like have these hypotheticals with you, but I was like, "Okay." Like thankfully my wife's not like that at all. She doesn't she doesn't buy $5,000 handbags, but you know, if she did, you know, that's she's allowed to and she can. I'm just saying like, you know. Yeah.

45:02 Yeah. No, no, it's it's good. That's why I really I like this your style of writing your both your books now as well as of dollars and data. I I highly recommend people go there. Nick, I've asked you this before, but I but but I'm things change and and you're a little bit older and have more years to work and to writing and now a marriage. So, a big life event. If you're meeting like with people who are earlier in their career, like they're getting started, maybe early 20s, mid20s, what type of life/career advice do you give to those types who want to leave do what you're doing? They want to leave a positive dent in the world, create a legacy. What do you say to them?

45:42 You have to really follow your interest. And I think because when you follow your interest, you're more likely to keep going when you face obstacles, right? And I think

45:51 simply like I I started writing. Remember I said I've been writing for it'll be nine years at the end of this year. So at the end of 2025, I started writing in 2017. And

46:00 you know, I didn't make money for three years. I didn't make a single dollar just putting out there putting out content just for the heck of it. You know, I wasn't trying to do it as a money-making thing. I just wanted to like hey write cool stuff and like see if people would like it etc. And I was like, "Oh, they liked it. Okay, keep doing it." Eventually, you know, I started doing ad partnerships and things like that. And so, I started earning money on it. But for 3 years, I just did it. And that first year especially was really tough cuz, you know, you're putting stuff out into the world and no one's reading it. No one's responding to it. Like, it's getting crickets. And people think that, you know, as a content creator, you know, they think like, oh, if your stuff's not good, you get like rejected. Everyone's like, oh, this sucked. This piece. No, no one says that. No one talks about it. It's it's

46:38 it's crickets. That's what the sound of rejection is. It is nothing. the sound is silence, right? Once you realize that, then it's like it's much harder than like I wish there was like 20 people out there saying this this blog post sucks. I'm like, at least they read it, right? But no one's even reading the blog post, right? So, it just took a while. I mean, of course, I had a couple lucky breaks early where like some people like would retweet my stuff or something, but like still every week it was a challenge. I still to go out there and try and get attention again by putting out, you know, the best thing I could. And so, the hard thing is like follow your interest because if you're really interested in it, you'll do it regardless of money, outcome, whatever.

47:10 And just like I like finance. I'm going to keep writing about it because I just enjoy it, you know, and I'm not doing it just to make the money. Of course, the money is nice and all, but I'm trying to help people as much as I can. Coming up with new frameworks and new ways of looking at a very difficult and complex problem. And for me, it's not as difficult and complex because I love it and I've been thinking about it for so long and spending so much time on it. And so trying to distill all that as as best I can into different frameworks to help people.

47:37 Love it, man. Well, Nick, I appreciate it. The book is called The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life. Again, just like of dollars and data, just keep buying. It's really, really well written. It's it's entertaining and also really useful. So, I appreciate you writing it and and sending me an early copy, man. It's been really good to catch up with you as well. Thanks so much, man.

47:59 Yeah, thanks again for having me on, Ryan. Appreciate it.

Questions about this episode

Who speaks in "How Your Ego is Bankrupting You: The 6 Levels of Wealth with Nick Maggiulli"?

Ryan Hawk (Host), Nick Maggiulli (Guest).

What is "How Your Ego is Bankrupting You: The 6 Levels of Wealth with Nick Maggiulli" about?

The discussion explores the relationship between ego, wealth, and happiness, emphasizing that while money can enhance happiness for those who are poor or already content, it doesn't improve the lives of those who are unhappy. It highlights the costly nature of maintaining a façade of wealth due to ego and outlines strategies for achieving financial growth, such as entrepreneurship or acquiring…

What is mentioned in this Ryan Hawk episode?

4 people, works and ideas are mentioned, including Dollars and Data, Roltz Wealth Management, Searching for Bobby Fischer, COVID-19 pandemic. Each one on this page links to its own page with every episode that mentions it.

How long is "How Your Ego is Bankrupting You: The 6 Levels of Wealth with Nick Maggiulli"?

The episode runs 48 min; the transcript is about 11,519 words in 100 timestamped sections.

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