The Wealth Ladder by Nick Maggiulli Proven Strategies for Every Step of Your Financial Life
What's it about?
The Wealth Ladder (2025) reveals why most financial advice fails: it doesn’t adapt as your circumstances change. What works when you’re scraping by won’t help as much once you’ve built savings or boosted your income. This is a guide to knowing what to focus on – when to spend, when to save, when to invest, and when to stop trading time for money – so you can build wealth with strategy, not guesswork.
You can earn six figures and still feel broke. You can work nonstop and still fall behind. That’s because what you do with your money matters more than what you make. And the rules that helped you build your first $10,000 won’t help you build your first million.
That’s where most people go wrong: they stick with the same tactics long after they’ve outgrown them. They keep budgeting every dollar like they’re still living paycheck to paycheck. Or they chase side hustles that barely move the needle. But the truth is, your approach to money needs to evolve as you move up the wealth ladder.
This lesson breaks wealth into distinct levels and explains exactly what to focus on at each stage – whether that’s cutting back on spending, investing in your career, using leverage, or shifting your time toward high-impact opportunities. You’ll learn why it’s smarter to spend based on your wealth, not your income. You’ll see how building financial freedom means more than saving money – it means multiplying your effort with tools like capital, labor, or content. You’ll also find out why financial wealth is only one piece of the puzzle, and how it can support the other kinds of wealth that matter: your health, your time, your relationships, and your peace of mind.
If you want a clear roadmap for growing your wealth without wasting time on outdated advice, this is where to start.
Not all dollars are created equal. A dollar means something very different to someone with $1,000 in the bank versus someone with $1 million. That’s why the smartest way to spend money isn’t based on what you earn – it’s based on what you’ve saved.
This starts with a simple idea: the 0.01% Rule. It says that spending decisions that account for less than 0.01% of your net worth won’t have much impact on your finances. So if you’re worth $10,000, an extra dollar won’t move the needle. But if your total wealth is $100? That same dollar suddenly matters.
This idea feeds directly into what’s called the Wealth Ladder. It’s a multi-step framework that shows how your net worth changes your relationship with spending. At the bottom, Level 1 means living paycheck to paycheck – here, every cent counts. At Level 2, grocery freedom kicks in: you can afford to buy what you want at the supermarket. Level 3 means restaurant freedom: you don’t think twice about ordering the salmon instead of the burger. Level 4 brings travel freedom. Level 5 unlocks dream-home territory. And Level 6? That’s where your spending can impact the lives of others, like buying companies or funding large-scale philanthropy.
Each level represents a new kind of spending freedom. But the jump between levels is steep. If you’re in Level 3 with $500,000, an extra $10,000 won’t get you to Level 4. It’s not enough to suddenly travel without worrying about cost. Yet that same $10,000 would be life-changing for someone in Level 1 – it could cover rent, groceries, or eliminate debt.
This is where many people go wrong. They spend based on their income instead of their wealth. That might work temporarily, but it’s risky. Income can vanish. Jobs disappear. Contracts don’t get renewed. And when that happens, people who’ve been living like they’re rich – without actually being rich – face a harsh reckoning. Think of professional athletes. Some make millions a year but end up broke because they built lifestyles that only made sense while the checks were still rolling in. The issue wasn’t what they earned – it was what they kept.
So here’s the smarter move: spend like someone one level below where you are on the Wealth Ladder. That mindset builds a cushion and helps you climb. If you’re at grocery freedom, don’t jump straight to fine dining. If you’re at restaurant freedom, hold off on private jets. Earn your way into the next level – don’t fake it. It’s tempting to spend to impress. But the most powerful spending decision is knowing when not to.
The way you earn money today shouldn’t look like how you earned it five years ago – and it definitely shouldn’t look the same five years from now. That’s the idea behind evolving your income strategy as you move up the Wealth Ladder. The higher you climb, the more valuable your time becomes, and the more selective you need to be about how you use it.
Early on, when your net worth is under $10,000, almost any job is worth taking. Odd gigs, weekend shifts, rideshare driving – if it pays, it’s probably worth it. This is Level 1 of the Wealth Ladder, and the focus here is simple: get money in the door and start building a financial cushion.
But once you move into Level 2 ($10k–$100k), the game shifts. Instead of grinding out more hours, the goal is to increase your earning power. That means learning new skills, picking up certifications, or leveling up through your current job. For instance, if you’re tutoring kids after work, it makes sense in Level 1. But in Level 2, maybe you launch a proper tutoring business, advertise, and hire others. That’s how you grow your earnings without doubling your hours.
By Level 3 ($100k–$1M), your income decisions should have real financial weight. Each move – whether it’s a promotion, a freelance project, or a new investment – should bring in at least $1,000 to $10,000 over time. Here, time is no longer cheap. So if an opportunity doesn’t grow your wealth by at least one percent, it’s probably not worth your energy.
This 1-Percent Rule acts like a personal filter. If you’re worth $50,000, don’t take on tasks that only add $100. Focus on opportunities that grow your wealth by $500 or more. That way, your time and energy stay aligned with your financial goals.
Eventually, the only real way to level up beyond a certain point – say, past $1M – is to get serious about entrepreneurship or investing. Raises and promotions can only take you so far. Starting or joining a growing business gives your money far more leverage. That’s why many high-net-worth individuals stop focusing on salary and start building or scaling something bigger.
This shift from earning money with your time to earning with your assets is what separates the middle from the truly wealthy. Think of Rihanna launching a beauty brand or someone like Meg Whitman joining and scaling eBay. They didn’t just earn money – they multiplied it through leverage.
So, wherever you are financially, stop and ask: Is your time being spent in a way that matches your current wealth level? If not, it’s probably time to make a move.
There’s a reason some people earn dramatically more than others even when they work the same number of hours. The secret is leverage: finding ways to separate your income from your time. The more leverage you use, the more upside you unlock.
There are three main types: labor, capital, and content. Each one has its own advantages, risks, and place on the Wealth Ladder. Understanding how to use them can transform your earning potential.
Start with labor. This is the oldest and most familiar form of leverage. It’s about using other people’s time to grow your income. Think of someone who mows lawns for $50 a job. On their own, they might do twelve lawns a day and make $600 in revenue. But by hiring help and scaling up, they can do eighteen lawns, generate more income, and step away from the physical work to focus on growth. Over time, they may stop mowing entirely and just run the business. That’s leverage in action. It’s powerful, but also messy: managing people can be tough. Still, if you can lead well, labor can push you from six figures into the millions.
Then there’s capital. This is using money – yours or someone else’s – to make more money. Investing in real estate, running a hedge fund, or even buying a small business all fall under this category. Say you’re good at beating the stock market. You’ll make a nice return on your own money. But if you raise capital from others, suddenly your skills are worth 10 or even 100 times more. This form of leverage has massive upside – but also big emotional and financial risk. One bad bet or market dip and everything can fall apart. So while capital can supercharge wealth, it needs to be handled with care.
The third type is content. Thanks to the internet, you can create something once and sell or share it endlessly. That might be a YouTube video, a podcast, or an online course. It costs nothing to distribute, and you don’t need anyone’s permission to publish. This makes content a high-leverage tool, especially for those in Levels 2 through 4 on the Wealth Ladder. But standing out in a sea of creators takes serious skill and consistency. One viral post rarely lasts. Long-term success in content usually depends on quality, persistence, and a smart plan to monetize.
Leverage is how you scale your earnings. It’s how Kim Kardashian earns millions from a single Instagram post, or how a small-time investor turns a clever fund into a fortune. You don’t need to be famous or wealthy to start using leverage. But you do need to think beyond trading hours for dollars.
To build serious wealth, you’ll need to use more than just your time. You’ll need to multiply your effort through others, through money, or through ideas. That’s leverage. And it’s the engine behind every big leap on the Wealth Ladder.
If you’re on Level 2 of the Wealth Ladder – with a net worth between $10,000 and $100,000 – there’s one thing that can supercharge your progress more than anything else: your career. This is the level where making the right decisions can set you up for long-term wealth. It’s where working smarter pays off more than working harder.
At this stage, you’ve moved beyond living paycheck to paycheck. You’re out of survival mode. But you’re not wealthy enough to coast. You still have to think carefully about how you spend your time, energy, and money. And one of the highest-return investments you can make is in your own skills.
Think of education not just as school, but as any way of increasing what you’re worth in the marketplace. That could mean going back to university, attending a coding bootcamp, taking night classes, or even learning on the job. The key is choosing something that boosts your earning power. That’s how you turn knowledge into leverage.
But not all education is worth the cost. If you’re still at the bottom of the ladder, a risky student loan might do more harm than good. If you’re near the top, the time cost might not make sense. Level 2 is the sweet spot: you can afford to take some calculated risks, and the upside is still meaningful.
To figure out what to focus on, use a three-part framework. Look for the intersection of what you’re good at, what you enjoy, and what people will pay you for. Ideally, you want all three. But even two out of three can work. For example, if you’re good at something and it’s in demand, passion might follow. Or if you’re deeply interested in something and others will pay for it, you’ll likely improve quickly.
This doesn’t mean quitting your job tomorrow. You can start with a side hustle, freelance project, or online course. But if your current job offers no skill growth, no promotions, and stagnant pay, that’s a red flag. Even if things feel comfortable now, staying put could be costing you in the long run.
High earners rarely stay stuck in Level 2. Most move on because their incomes push them up. If your income has plateaued, it’s time to take action. Missed opportunities don’t show up on your bank statement – but they show up in what your future could’ve been.
The earlier you start compounding your skills, the more time they have to pay off. Investing in yourself, especially at Level 2, is how you unlock the next step on the Wealth Ladder – and the freedom that comes with it.
Money doesn’t exist in a vacuum. It doesn’t magically create joy, purpose, or connection. But it can make almost everything in your life better – if the rest of your life is already in good shape. Financial wealth, when used wisely, is a multiplier. Like salt in cooking, it doesn’t change the core ingredients, but it brings out their best flavors. It turns a good life into a great one. But without anything to enhance, it falls flat.
Imagine someone who loves music. Money can upgrade the experience from listening through tinny headphones to seeing their favorite band live. Or someone who enjoys hiking: money can help them explore the Swiss Alps instead of the local trail. Financial wealth adds richness, not by replacing life’s joys but by expanding access to them.
But too much money – or too much focus on it – can ruin everything. A life built on money alone is like a plate of pure salt: technically valuable, practically inedible. That’s why it’s essential to build up the other kinds of wealth first – or at least alongside your finances.
There are five types of wealth that matter. Financial wealth is only one of them. The others are social wealth, mental wealth, physical wealth, and time wealth.
Social wealth is your relationships. Friendships, family, love, community – these are the emotional roots of a rich life. Science backs this up. Strong social connections are a better predictor of long-term health than diet or exercise. Just spending time with friends regularly can boost your well-being more than a six-figure raise. And while money can’t buy friendship, it can give you the time and freedom to nurture it.
Then there’s mental wealth. This is your emotional health, your mindset, your sense of self. Low stress, high confidence, a sense of purpose: these aren’t luxuries. They’re essential. And while money might reduce some kinds of stress, it won’t fix a job you hate, or a lack of meaning in your life. Mental wealth comes from doing work you enjoy, building self-esteem, and managing stress well.
Physical wealth is your health. It’s foundational. Without it, nothing else matters. Ask anyone facing a health crisis: even endless money can’t buy back energy, strength, or time. And yet, having money can give you access to better food, healthcare, rest, and movement – all of which make it easier to stay healthy.
Finally, there’s time wealth. This is the freedom to spend your hours how you choose. Some people dream of retirement or early freedom, but then feel lost when they get it. The trick is not just having more time – it’s knowing how to spend it with intention. Even an hour a day spent meaningfully is better than ten hours wasted in boredom.
Financial wealth is powerful, but only when it’s paired with the other kinds. Think of it this way: if your social, mental, physical, or time wealth is zero, then money multiplied by zero still equals zero. So build a life worth enhancing – and then let money enhance it.
In this lesson to The Wealth Ladder by Nick Maggiulli, you’ve learned that wealth grows when you spend based on what you own, not just what you earn. As your net worth increases, your priorities should shift from grinding out hours to finding smarter ways to earn – through skill-building, strategic career moves, and eventually, leverage. Whether it's labor, capital, or content, true wealth comes from separating your income from your time. But money alone isn’t enough. It works best when paired with a rich life – one built on strong relationships, good health, purpose, and time you control. Financial wealth amplifies everything around it, but without other forms of wealth to multiply, it adds up to nothing.
The Wealth Ladder (2025) reveals why most financial advice fails: it doesn’t adapt as your circumstances change. What works when you’re scraping by won’t help as much once you’ve built savings or boosted your income. This is a guide to knowing what to focus on – when to spend, when to save, when to invest, and when to stop trading time for money – so you can build wealth with strategy, not guesswork.
You can earn six figures and still feel broke. You can work nonstop and still fall behind. That’s because what you do with your money matters more than what you make. And the rules that helped you build your first $10,000 won’t help you build your first million.
That’s where most people go wrong: they stick with the same tactics long after they’ve outgrown them. They keep budgeting every dollar like they’re still living paycheck to paycheck. Or they chase side hustles that barely move the needle. But the truth is, your approach to money needs to evolve as you move up the wealth ladder.
This lesson breaks wealth into distinct levels and explains exactly what to focus on at each stage – whether that’s cutting back on spending, investing in your career, using leverage, or shifting your time toward high-impact opportunities. You’ll learn why it’s smarter to spend based on your wealth, not your income. You’ll see how building financial freedom means more than saving money – it means multiplying your effort with tools like capital, labor, or content. You’ll also find out why financial wealth is only one piece of the puzzle, and how it can support the other kinds of wealth that matter: your health, your time, your relationships, and your peace of mind.
If you want a clear roadmap for growing your wealth without wasting time on outdated advice, this is where to start.
Not all dollars are created equal. A dollar means something very different to someone with $1,000 in the bank versus someone with $1 million. That’s why the smartest way to spend money isn’t based on what you earn – it’s based on what you’ve saved.
This starts with a simple idea: the 0.01% Rule. It says that spending decisions that account for less than 0.01% of your net worth won’t have much impact on your finances. So if you’re worth $10,000, an extra dollar won’t move the needle. But if your total wealth is $100? That same dollar suddenly matters.
This idea feeds directly into what’s called the Wealth Ladder. It’s a multi-step framework that shows how your net worth changes your relationship with spending. At the bottom, Level 1 means living paycheck to paycheck – here, every cent counts. At Level 2, grocery freedom kicks in: you can afford to buy what you want at the supermarket. Level 3 means restaurant freedom: you don’t think twice about ordering the salmon instead of the burger. Level 4 brings travel freedom. Level 5 unlocks dream-home territory. And Level 6? That’s where your spending can impact the lives of others, like buying companies or funding large-scale philanthropy.
Each level represents a new kind of spending freedom. But the jump between levels is steep. If you’re in Level 3 with $500,000, an extra $10,000 won’t get you to Level 4. It’s not enough to suddenly travel without worrying about cost. Yet that same $10,000 would be life-changing for someone in Level 1 – it could cover rent, groceries, or eliminate debt.
This is where many people go wrong. They spend based on their income instead of their wealth. That might work temporarily, but it’s risky. Income can vanish. Jobs disappear. Contracts don’t get renewed. And when that happens, people who’ve been living like they’re rich – without actually being rich – face a harsh reckoning. Think of professional athletes. Some make millions a year but end up broke because they built lifestyles that only made sense while the checks were still rolling in. The issue wasn’t what they earned – it was what they kept.
So here’s the smarter move: spend like someone one level below where you are on the Wealth Ladder. That mindset builds a cushion and helps you climb. If you’re at grocery freedom, don’t jump straight to fine dining. If you’re at restaurant freedom, hold off on private jets. Earn your way into the next level – don’t fake it. It’s tempting to spend to impress. But the most powerful spending decision is knowing when not to.
The way you earn money today shouldn’t look like how you earned it five years ago – and it definitely shouldn’t look the same five years from now. That’s the idea behind evolving your income strategy as you move up the Wealth Ladder. The higher you climb, the more valuable your time becomes, and the more selective you need to be about how you use it.
Early on, when your net worth is under $10,000, almost any job is worth taking. Odd gigs, weekend shifts, rideshare driving – if it pays, it’s probably worth it. This is Level 1 of the Wealth Ladder, and the focus here is simple: get money in the door and start building a financial cushion.
But once you move into Level 2 ($10k–$100k), the game shifts. Instead of grinding out more hours, the goal is to increase your earning power. That means learning new skills, picking up certifications, or leveling up through your current job. For instance, if you’re tutoring kids after work, it makes sense in Level 1. But in Level 2, maybe you launch a proper tutoring business, advertise, and hire others. That’s how you grow your earnings without doubling your hours.
By Level 3 ($100k–$1M), your income decisions should have real financial weight. Each move – whether it’s a promotion, a freelance project, or a new investment – should bring in at least $1,000 to $10,000 over time. Here, time is no longer cheap. So if an opportunity doesn’t grow your wealth by at least one percent, it’s probably not worth your energy.
This 1-Percent Rule acts like a personal filter. If you’re worth $50,000, don’t take on tasks that only add $100. Focus on opportunities that grow your wealth by $500 or more. That way, your time and energy stay aligned with your financial goals.
Eventually, the only real way to level up beyond a certain point – say, past $1M – is to get serious about entrepreneurship or investing. Raises and promotions can only take you so far. Starting or joining a growing business gives your money far more leverage. That’s why many high-net-worth individuals stop focusing on salary and start building or scaling something bigger.
This shift from earning money with your time to earning with your assets is what separates the middle from the truly wealthy. Think of Rihanna launching a beauty brand or someone like Meg Whitman joining and scaling eBay. They didn’t just earn money – they multiplied it through leverage.
So, wherever you are financially, stop and ask: Is your time being spent in a way that matches your current wealth level? If not, it’s probably time to make a move.
There’s a reason some people earn dramatically more than others even when they work the same number of hours. The secret is leverage: finding ways to separate your income from your time. The more leverage you use, the more upside you unlock.
There are three main types: labor, capital, and content. Each one has its own advantages, risks, and place on the Wealth Ladder. Understanding how to use them can transform your earning potential.
Start with labor. This is the oldest and most familiar form of leverage. It’s about using other people’s time to grow your income. Think of someone who mows lawns for $50 a job. On their own, they might do twelve lawns a day and make $600 in revenue. But by hiring help and scaling up, they can do eighteen lawns, generate more income, and step away from the physical work to focus on growth. Over time, they may stop mowing entirely and just run the business. That’s leverage in action. It’s powerful, but also messy: managing people can be tough. Still, if you can lead well, labor can push you from six figures into the millions.
Then there’s capital. This is using money – yours or someone else’s – to make more money. Investing in real estate, running a hedge fund, or even buying a small business all fall under this category. Say you’re good at beating the stock market. You’ll make a nice return on your own money. But if you raise capital from others, suddenly your skills are worth 10 or even 100 times more. This form of leverage has massive upside – but also big emotional and financial risk. One bad bet or market dip and everything can fall apart. So while capital can supercharge wealth, it needs to be handled with care.
The third type is content. Thanks to the internet, you can create something once and sell or share it endlessly. That might be a YouTube video, a podcast, or an online course. It costs nothing to distribute, and you don’t need anyone’s permission to publish. This makes content a high-leverage tool, especially for those in Levels 2 through 4 on the Wealth Ladder. But standing out in a sea of creators takes serious skill and consistency. One viral post rarely lasts. Long-term success in content usually depends on quality, persistence, and a smart plan to monetize.
Leverage is how you scale your earnings. It’s how Kim Kardashian earns millions from a single Instagram post, or how a small-time investor turns a clever fund into a fortune. You don’t need to be famous or wealthy to start using leverage. But you do need to think beyond trading hours for dollars.
To build serious wealth, you’ll need to use more than just your time. You’ll need to multiply your effort through others, through money, or through ideas. That’s leverage. And it’s the engine behind every big leap on the Wealth Ladder.
If you’re on Level 2 of the Wealth Ladder – with a net worth between $10,000 and $100,000 – there’s one thing that can supercharge your progress more than anything else: your career. This is the level where making the right decisions can set you up for long-term wealth. It’s where working smarter pays off more than working harder.
At this stage, you’ve moved beyond living paycheck to paycheck. You’re out of survival mode. But you’re not wealthy enough to coast. You still have to think carefully about how you spend your time, energy, and money. And one of the highest-return investments you can make is in your own skills.
Think of education not just as school, but as any way of increasing what you’re worth in the marketplace. That could mean going back to university, attending a coding bootcamp, taking night classes, or even learning on the job. The key is choosing something that boosts your earning power. That’s how you turn knowledge into leverage.
But not all education is worth the cost. If you’re still at the bottom of the ladder, a risky student loan might do more harm than good. If you’re near the top, the time cost might not make sense. Level 2 is the sweet spot: you can afford to take some calculated risks, and the upside is still meaningful.
To figure out what to focus on, use a three-part framework. Look for the intersection of what you’re good at, what you enjoy, and what people will pay you for. Ideally, you want all three. But even two out of three can work. For example, if you’re good at something and it’s in demand, passion might follow. Or if you’re deeply interested in something and others will pay for it, you’ll likely improve quickly.
This doesn’t mean quitting your job tomorrow. You can start with a side hustle, freelance project, or online course. But if your current job offers no skill growth, no promotions, and stagnant pay, that’s a red flag. Even if things feel comfortable now, staying put could be costing you in the long run.
High earners rarely stay stuck in Level 2. Most move on because their incomes push them up. If your income has plateaued, it’s time to take action. Missed opportunities don’t show up on your bank statement – but they show up in what your future could’ve been.
The earlier you start compounding your skills, the more time they have to pay off. Investing in yourself, especially at Level 2, is how you unlock the next step on the Wealth Ladder – and the freedom that comes with it.
Money doesn’t exist in a vacuum. It doesn’t magically create joy, purpose, or connection. But it can make almost everything in your life better – if the rest of your life is already in good shape. Financial wealth, when used wisely, is a multiplier. Like salt in cooking, it doesn’t change the core ingredients, but it brings out their best flavors. It turns a good life into a great one. But without anything to enhance, it falls flat.
Imagine someone who loves music. Money can upgrade the experience from listening through tinny headphones to seeing their favorite band live. Or someone who enjoys hiking: money can help them explore the Swiss Alps instead of the local trail. Financial wealth adds richness, not by replacing life’s joys but by expanding access to them.
But too much money – or too much focus on it – can ruin everything. A life built on money alone is like a plate of pure salt: technically valuable, practically inedible. That’s why it’s essential to build up the other kinds of wealth first – or at least alongside your finances.
There are five types of wealth that matter. Financial wealth is only one of them. The others are social wealth, mental wealth, physical wealth, and time wealth.
Social wealth is your relationships. Friendships, family, love, community – these are the emotional roots of a rich life. Science backs this up. Strong social connections are a better predictor of long-term health than diet or exercise. Just spending time with friends regularly can boost your well-being more than a six-figure raise. And while money can’t buy friendship, it can give you the time and freedom to nurture it.
Then there’s mental wealth. This is your emotional health, your mindset, your sense of self. Low stress, high confidence, a sense of purpose: these aren’t luxuries. They’re essential. And while money might reduce some kinds of stress, it won’t fix a job you hate, or a lack of meaning in your life. Mental wealth comes from doing work you enjoy, building self-esteem, and managing stress well.
Physical wealth is your health. It’s foundational. Without it, nothing else matters. Ask anyone facing a health crisis: even endless money can’t buy back energy, strength, or time. And yet, having money can give you access to better food, healthcare, rest, and movement – all of which make it easier to stay healthy.
Finally, there’s time wealth. This is the freedom to spend your hours how you choose. Some people dream of retirement or early freedom, but then feel lost when they get it. The trick is not just having more time – it’s knowing how to spend it with intention. Even an hour a day spent meaningfully is better than ten hours wasted in boredom.
Financial wealth is powerful, but only when it’s paired with the other kinds. Think of it this way: if your social, mental, physical, or time wealth is zero, then money multiplied by zero still equals zero. So build a life worth enhancing – and then let money enhance it.
In this lesson to The Wealth Ladder by Nick Maggiulli, you’ve learned that wealth grows when you spend based on what you own, not just what you earn. As your net worth increases, your priorities should shift from grinding out hours to finding smarter ways to earn – through skill-building, strategic career moves, and eventually, leverage. Whether it's labor, capital, or content, true wealth comes from separating your income from your time. But money alone isn’t enough. It works best when paired with a rich life – one built on strong relationships, good health, purpose, and time you control. Financial wealth amplifies everything around it, but without other forms of wealth to multiply, it adds up to nothing.
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