Transcription
You will eventually die. And before you do, you'll spend most of your life working, around 90,000 hours on average. That's 90,000 hours of alarm clocks, bad coffee, and working for someone else's dreams. All for a number that hits your bank account after a few weeks. And I have to ask, what does that number actually get you? Is it worth it? Because there are different levels to this thing called wealth. And the goal of this video is that by the end, you'll know exactly where you stand, what life looks like at every level, and what it truly takes to move up.
I'm about to make you insanely rich.
Level zero is a tragedy. This is where your net worth is below zero. At this stage, you actually do not own anything, but somehow you owe everyone. You're buried in debt. Student loans, credit card balances, buy now, pay later decisions you don't even remember making. You literally cannot explain how you have survived so far. Every day is a fresh battle on its own. Yes, you actually have a job, but then you get paid by Friday, and by Monday, the money is gone. It's not that you're irresponsible, but because the system collected its dues immediately. You're hanging by a thread, praying for a miracle, and your only goal right now is simple, survive.
Level one starts at under $30,000 per year. $30,000 per year is not great, but it's not absolutely horrible. You're not drowning anymore. At least, you can cover your bills, barely. But at this level, you are still spending more than you make, or just barely breaking even. We're talking about the 37 million Americans living below the poverty line, but also the fresh college grad with $60,000 in student loans working at a job that pays $28,000 a year, and the single mom working two jobs who still has to choose between groceries and the electric bill.
Here's what daily life looks like. Your rent is eating 50 to 60% of your income, way above the recommended 30%. You don't have proper savings because every cent you make goes to solve a problem, especially when you have a family to feed. Unexpected expenses like a flat tire, a toothache, or a broken phone are genuine financial emergencies, not inconveniences, real emergencies.
You really cannot afford to spend on your cravings freely. You're not making financial decisions, you're making survival decisions. Also, you have to realize that being poor is expensive. You can't buy in bulk because you can't afford the upfront cost. You can't get the cheaper car insurance because your credit score is bad. You can't even take the higher paying job across town because you can't afford the gas.
It's like you are actively paying the price of having less. If you want to exit level one, it requires two things, increasing your income and controlling your expenses, but mostly increasing your income. You can't cut your way to wealth on a salary of $28,000 a year. At some point, the math just doesn't math.
Level two is where roughly 60% of Americans live, and it's the most psychologically exhausting level on this entire list because at level two, you're making enough. Enough to pay your bills, enough to not panic every single day, but never enough to actually get ahead. Things actually feel okay. I mean, you can breathe a little, but deep down, you know things aren't okay. And this level is particularly dangerous because it feels like success, but it's actually a comfortable trap.
This is what it looks like. You have a job with maybe some benefits. You might have a small 401k which you're contributing to because your HR lady told you it was free money, and she was right. Your car is paid off or nearly paid off, and you fought hard for that. But your emergency fund? It's either non-existent or it's $1,200, and you are not touching it. That money is sacred. That money is the difference between you and level one.
Now, this is the defining feature of level two. One bad month can erase three good ones. A medical bill, a layoff, a landlord who decides to raise rent 20%. Any of these can send you sliding right back down. So, you develop this low-grade, constant financial anxiety, a background hum of stress that never quite turns off. You're not in crisis, but you're never safe. You see why it's very exhausting? You have to budget fun. Vacations are road trips to see family, staying for free. You can eat out in an expensive restaurant, but only on your birthday. You have Netflix, you're not an animal, but you're sharing the password with your cousin in Ohio.
The move out of level two is building a skill that increases your income, or ruthlessly attacking your biggest expense, usually rent, or both. The single most powerful thing you can do here is to stop trading time for money at a fixed rate, but we'll get into that. Anyways, congratulations. At least for now, you're now financially dependent on your job. Breathe. You can breathe here.
Level three is what most people mean when they say doing okay. I'm okay. I'm okay. You are genuinely doing okay. You are not wealthy, but you are definitely not struggling. Just okay. And okay is something to be proud of because okay is harder to reach than it used to be. Also, I have to note that I am mostly referring to developed countries like the USA. If you are making $100,000 per year from the streets of Accra, Ghana in Africa, you are much more than okay.
At this level, you have a real emergency fund. Three to six months of expenses sitting in a high-yield savings account earning four to five percent interest because you can now afford to keep a reasonable amount of money apart for savings and investments. You're contributing meaningfully to your 401k. You have health insurance, and you actually use it, which sounds obvious and is somehow radical. You own a decent car that starts reliably. Maybe you've bought a starter home, or you're saving for one. You go on a real vacation once a year. A flight somewhere, a hotel with a pool, the whole thing. Your kids have everything they need and some of what they want. It's a beautiful life, to say the least.
But level three has a ceiling. You are still entirely dependent on your job. Your money machine requires you to show up every single day. If the job disappears, the whole thing disappears with it. You have some savings, sure, but three to six months without your job will definitely be ugly. So, yes, this level creates the strongest illusion of success. You're comfortable, but you're not free, and there's a difference.
The jump from level three to level four is where the real wealth building begins, and it almost always involves one thing, assets. Things that make money while you sleep. A rental property that makes money for you passively. A side business that generates income without requiring all of your hours. The people who escape level three aren't necessarily smarter. They just stopped letting their money sit still. They started letting their money do the work.
Level four is the entry point to a genuinely different life. Six-figure income, growing net worth, and most importantly, options. You're beginning to have real options. Finally, you live in a nice neighborhood. Maybe not the nicest, but nice. Your house has a guest room that nobody really uses and a grill on the deck. Your car is a 2022 Toyota Highlander, or a Honda Pilot, or something else that is respectable. You eat at real restaurants on regular Tuesdays. You have a financial advisor, or you've at least thought seriously about getting one. Your kids are in activities, soccer, piano lessons, something that involves you driving a lot on weekends. You take two vacations a year. One is the beach, one is wherever your wife wants to go.
What defines level four is that money has stopped being a constant source of stress. That background hum we talked about at level two, it's mostly gone. You don't check your bank account before every purchase. You don't feel a small wave of shame when you swipe your card at a restaurant. Money is still something you manage carefully, but it's not something you fear.
But level four has its own trap, and it's a sneaky one. It's called lifestyle inflation. When you start making $150,000, your expenses have a magical way of becoming $148,000. Nicer house, nicer car, private school for the kids, a wine habit, a gym membership you definitely don't use. You're earning more than 89% of Americans, and somehow, you're still not saving as much as you should. It sounds strange, but a lot of people end up in this situation. The people who remain at level four are the ones who let their spending catch up to their income. The people who leave level four are the ones who keep living like they make $80,000 while earning $180,000, and let the gap turn into wealth. So, your job here is to make sure you don't get carried away by the money. Focus.
Oh, wow. You're a millionaire, but nobody would know. At level five, your net worth has crossed seven figures, but most of it is locked up in illiquid assets. Your home equity, your retirement accounts, your business. What I mean is that you don't have a million dollars in cash, but you certainly have it in properties and assets. You're worth a million dollars in the same way that someone with a million dollars in a house they can't sell is worth a million dollars. The money is there, but it's not directly spendable.
You are in a category of people we call liquid millionaires, people with a million in actual investable assets. And you have something genuinely powerful, a portfolio that works for you. A million dollars in a diversified index fund historically returns somewhere around $70,000 to $100,000 a year on average. This is the level where passive income becomes real income, not a side hustle dream.
What does life actually look like? You live well, but not lavishly. You still fly economy sometimes, unless you really have to pay for business class. You have a boat, maybe, or a lake house, or a very nice membership at a golf club that you're slightly embarrassed about. What you have, more than anything else, is security. Generational, bone-deep security. You could lose your job tomorrow and be fine. You have something to fall back on. That feeling is worth more than most people realize until they have it. This is where wealth becomes a different category of experience.
At level six, money has largely stopped being a variable in your decision-making. You don't think about the price of groceries. You don't think about the cost of an expensive dinner. You don't compare gas prices. These things simply aren't worth your attention anymore. Let's talk about what $10 million, the midpoint of this level, actually buys you. If you invest $10 million carefully, it makes you roughly $300,000 to $500,000 every year without you lifting a finger. That's more than most American families earn in 10 years, and it just keeps coming in every month.
At this level, you have a team of money experts working for you. Someone to manage your investments, an accountant, and a lawyer for your estate. They handle the details. You barely need to pay attention. Your lifestyle looks like this. You live in a truly nice home in the area you actually wanted, not just what you could afford. You have a holiday home, or you stay in top luxury hotels when you travel. Business class is the minimum. First class feels ordinary. You get access to things regular people don't even know about, special investment deals only available to very wealthy people, exclusive private clubs and social circles where a dinner conversation can turn into a $2 million deal.
The uncomfortable thing is that this level is largely in The people here don't look like what you think rich looks like. They look like your dentist, except your dentist doesn't have $20 million. We need to talk about a different kind of math. At $50 million, if you spend $1 million a year, which is a lot of spending, and your portfolio earns a modest 6%, you will end the year with more money than you started with. Every year, forever. You cannot outspend it. You have functionally escaped the financial consequences of being alive. The normal financial rules of life no longer apply to you. This is just crazy, entirely.
At $100 million, you have a private family office, a dedicated team of professionals whose entire job is to manage, grow, and protect your money. At $500 million, your decisions can affect stock markets. You fund politicians and political campaigns, not as a donation, but as an investment. Your name alone can change the price of a project. You have so many lawyers, your lawyers have lawyers.
At a billion dollars, and there are roughly 800 billionaires in America, you are operating in a world with genuinely different rules. You never fly commercial. You have a security detail. You don't have a bank account the way you and I have a bank account. Your money lives in complex legal and financial structures that take experts just to understand. You don't buy things, you acquire assets. You don't go on holidays, you have residences.
The most absurd thing here is that most of this wealth is not physically real in the way we understand money. Very little of this wealth is tangible cash. Elon Musk doesn't have $300 billion sitting in a bank. Most of his wealth is in stock, numbers on paper that go up and down daily. He cannot even simply spend it without complicated legal and financial maneuvering. Billionaire wealth is less like a bank account and more like owning a very large, very valuable painting. Technically worth a fortune, but you can't exactly take it to the store and use it to purchase something. And perhaps that's why study after study shows that billionaires are not noticeably happier than the rest of us.
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So, where does all of this talk about money leave you? This is the honest truth that this video has been quietly building toward. The difference between level one and level three is income. Earn more. Full stop. The difference between level three and level five is behavior, what you do with money once you have it. The difference between level five and level seven is mostly time, leverage, and luck, though the people at level seven prefer the word vision. The vast majority of people, maybe you, are somewhere between level two and level four. Enough to survive, maybe enough to be comfortable, but not yet enough to be free. And freedom is the thing, isn't it? That's what all of this is actually about. It's not about the yachts, not about first class, not even about owning a second house on a lake. It's about freedom. Just freedom. The ability to say no to things you don't want to do. The ability to say yes to things you do. Screw you, I'm out. Getting to a place where money stops being the reason you make every single decision you make.
The research on happiness and income is pretty consistent. Happiness and life satisfaction grow a lot as your income rises up to about $75,000 to $100,000 a year. It keeps growing slowly up to around 500,000, and then flattens out in ways that should be deeply reassuring to all of us who will never see $500,000. So, if you'll never earn $500,000 a year, that's actually fine. The happiness boost from extra money largely runs out before you get there anyway. There's also a well-known pattern called the hedonic treadmill. You get used to nice things fast. The yacht stops feeling exciting and starts feeling like a headache that needs a captain and insurance.
So, one last question, the most important question even. What actually makes people happy? Well, study after study points to the same three things. Autonomy, meaning control over your own time and choices, relationships, and purpose. The good news? These are available at every income level. Except, of course, you just want more. If you want to learn how to get rich, you need to watch this video where we explained every way to get rich in just 14 minutes.