Money Changes Your Life

The problem with being rich is that it is relative. With our focus on single individuals, we’ll go ahead and outline a change in thought process as you inevitably move up *levels* in the game of life. We’ve always had the same belief regarding income and net worth multiples. The simple axiom is as follows:

“Double your net worth or your net income and your life changes”

You cannot start doubling from zero, but we’ll start there and walk through some of the changes you’ll see as you move through the ranks. (Key note: we do not include retirement savings in net worth, it counts as a zero)

Zero Net Worth: At this point most *future successful people* will have extremely high levels of will power. Will power actually declines as net worth and income go up because there is less reason to “sweat the small stuff”. Details become less relevant as earnings and net worth accelerate. Starting at zero? Everything matters.

A good way to think about net worth when a person has nothing? Constantly envious of what other people have. Any moderately competitive person is going to be unhappy during this time period as they see… every single day… that they are no where near their potential.

This is normal. Anyone in this stage is ready to do anything (and everything) to gain some traction and this includes insane time sucks such as working for a low hourly wage. Willing to trade time for money.  There is no other immediate way to pay bills and start moving in the right direction.

A classic trap for the masses and most never figure a way out.

No time for fun because if a person has $0 to their name… they don’t deserve to have fun anyway.

$100K Net Worth: At around this point most people begin to feel some baseline level of security. Lots of effort (defined as hours worked in this rare instance) and money are at least *somewhat* correlated.

Anyone who reaches this modest level of net worth will know with certainty that anyone who claims hard work does not lead to more money (a minimal amount at least) is a complete liar and likely a failure at life as well.

Instead of doing anything for money, most in this camp will begin thinking in terms of “highest income per hour”. They haven’t escaped the trap yet. Instead they calculate how many dollars they are making per hour as that is their new way to free up time.

Generally, most of these guys find “quick hustles” to make a few hundred dollars here and there. Instead of using their valuable time to build a new skill they will usually invest free time in finding hustles for an extra $3-5K a year with all their extra time.

$200K Net Worth: Assuming a person successfully kept a decent job (typically a salaried employee), they begin falling into three categories at this point 1) frugality, 2) laziness and 3) scale. Right around this range most people have the ability to slack quite a bit. They will feel financially secure with a six figure bank account.

In Group 1, the person typically buys a home with the majority of the net worth as a down payment on a home. Then. Begins large and material cost cutting initiatives across the board. Minimal water bills, minimal spend on practically anything and moves towards home improvement (done by himself) to keep gaining momentum by essentially spending less… all cash flow goes to that mortgage.

In Group 2, a dangerous “YOLO” lifestyle is brought into play and the person sees his net worth stagnate to a rate of around $10-15K moves per year. Instead of trying to gain at rapid rates, he spends his time using his additional income because he doesn’t have a care in the world. This group is hit enormously during a recession and feels the real pain in their mid 30s as new skills were never developed.

In Group 3, a killer mentality usually comes out. This group sees that they are being used to make money for someone else. “No one is going to hire me unless they are making a profit off of me” is what they realize.

They are right. They find tangible skills to create a business as soon as possible.

$400K Net Worth: We’re down to two groups of people. People who picked up *event* driven income which we have talked about many times in the past (windfall earning typically due to ownership) or you have your frugality guys.

These two groups will never get along, although in some strange cases the windfall people also live frugal lives (they become disgustingly rich in the future). We’re in group one.

We have nothing but distaste for frugality type people as they have wasted their own valuable time. Instead of building something of value they spend time eating beans and rice. They are typically smart people and instead of using their brains to make hundreds of thousands of dollars more per year, they spend it finding ways to reduce their costs by tens of thousands per year. There is a floor to saving and no ceiling to earning. That is where the mentality changes.

$800K Net Worth: Generally, if a person has made it this far, there is no way they’re earning less than ~$200K per year (unless you’re old but as we stated your 401K does not count as net worth). The math simply doesn’t work.

If you were making $100K – $18K (retirement) – $22K for tax, healthcare, social security etc… You’ve only got about 60K per year and it would take almost twenty five long hard years to save to $800K (assumes 50% savings rate reinvested).

Your mentality is certainly not the same anymore. Your time is far too valuable. At around this point, you’re becoming unattached with regular people and it is extremely difficult for anyone to believe you are who you say you are. The vast majority of people will believe you are a liar so you begin to *lie down* to skate under the radar.

You’ll find that most people are not happy for you and your tolerance for opinions that are not backed by actual success… declines at alarming rates. Good riddance to 80% of your smartphone contacts.

All You Care About is Scale at This Point.

$1.6M+ Net Worth: Most will go through one of the following: 1) drug addiction, 2) alcohol addiction, 3) family fall outs, 4) “friend” fall outs and 5) a complete disconnection with anyone their age. As a reminder, we are assuming you’ve been a single person this whole time (defined as no legal marriage) and we have no doubt at least one of the major issues listed above will happen. It is only a matter of time.

1) Drug addiction: Typically cocaine. This seems to be the general escape for most and it could lead to a long-standing downward spiral. Thousands of dollars per week spent on insane party habits.

2) Alcohol Addiction: Showing up to run your business reeking of booze… on a Tuesday morning. Typically leads to dropped balls for clients/customers… consistently… for a long period of time…. at least a year

3) Family Fallout: Quite common as well. No longer interested in any family member or group meet ups as it is not worth your time. Unhealthy belief that usually changes quickly (6 months or so) if your family has been good to you.

4) “Friend” Fall Out: Your list of contacts will shrink instantly in the 12 month period after reaching around $1.2M in net worth. Only a handful of people will be happy for you and of those people… most will be rich as well so they will understand everything that is happening as you transition to your new life.

5) Complete Disconnection: This likely contributes to all of the four items above. You won’t be able to have many friends your own age. Most will fall into one of these categories: 1) jealous, 2) think you are lying, 3) hoping you will fail. You can read it on their faces. You will tell them something basic about your life and they will then constantly question it later in time about 3-4 months in the future. They want to see if you’re a liar to highlight number three… Once you realize you’re being interviewed by someone who isn’t in your ball park you begin to despise them and cut them off forever.

Long-term? It is better for everyone.

Now that we’ve passed the “bad part” about getting to your first $1.6M or so, it’s interesting to note the change in thinking and how this will be a “tell” in the future if you’re speaking to someone who is well off. If you’ve made it to this level you’ll get to $2M pretty quickly but here’s the more important part when you’re around new people and want to know if they are rich.

The Tells

1) Doesn’t seem to care about who is around him/her. Meaning he/she is there to speak to one person usually and doesn’t care about anyone else in the group because in the back of his head he is thinking “I don’t have time for XXX”.

2) Not phased by brand name clothing, cars, celebrities, athletes or “job titles”. Sure some rich people are extremely insecure and are “all about that life” with high end brands etc. However. None of them will be phased by it. This means either the person will wear the nice brand without even mentioning it or they will wear items with no brands anywhere and not care. Subtle but important.

3) Generally more emotionless. Being emotional is a big burden if someone wants to get rich. Emotions are used to make money and if you have an enormous amount of emotion, it will be difficult to make tough un-emotional money making decisions. Reminder that all items are sold for pleasure or pain… emotions and feelings, nothing more.

4) Eccentric. This is broad, but if the person seems to be eccentric that is a dead giveaway that the person is either dead broke or extremely well off. You’ll be able to tell the difference when the check comes so it won’t take much longer than one hour to figure out.

5) Decisive. This has been proven over and over again. Wealthy people are generally decisive. They make a decision and move on living with the consequences. They do not prattle along with diatribes that go nowhere. They cut and move.

Now for the final obvious kicker as mentioned at the top… The only interest becomes scale.

Scale means the following: how much recurring benefit will i get over the next 10 years if I invest X time into doing this task. Once this philosophy sets in, it never changes.

Why would a person spend 1 year of effort to see a perpetual income stream of $10K a year, when one year of effort into another task would lead to $50K into perpetuity. Life becomes more about cash flow now and the future becomes irrelevant so rich people are constantly living in the present moment.

A person who is well off (our definition is never has to work if he/she doesn’t want to) then they have no interest in delayed cash flows. This is why floating and working capital metrics become more and more important over time.


At this point, we now realized all we’ve done is help gold diggers look for the signs of a successful person if they run into them at a high end bar. Oh well. But on a more serious note understanding the changes in belief systems is clear:

– At zero one believes any cent matters and will power is the only item they have to gain traction

– At around $100K they start looking for “high efficiency” time for money to have a personal life

– At around $200K most begin to relax and live that “yolo life”

– At around $400K you see a clear split between frugality and scale moves (scale always wins)

– At around $800K you become much more disconnected to society, uninterested in anyone who isn’t in the same league

– At $1.6M+ all you care about is scale, scale, scale and cash flow that you can use yourself

Finally, as one last note, we’re outlining these general beliefs as we’ve seen assuming you’re young. This is why we’ve excluded all retirement funds from net worth making it excruciatingly difficult to hit these metrics without material success when young.

Knowing that money can change your life, we recommend Personal Capital to help grow your net worth (avoidance of fees) and act as a psychological booster every single time you login. The Company offers *free* software tools with the following four key features: 1) ability to avoid losing money by tracking all fees associated with an investment product allowing you to choose the best possible fund for your future, 2) portfolio analysis where your risk profile is stacked up against your current age and retirement goals, 3) in addition to these free tools, you can also track your net worth and path to becoming a millionaire and 4) when you hit $100K in networth you’ll receive a free one time consultation with an investment professional at Personal Capital. After linking up all of your accounts you’ll be able to sit back and watch as your net worth goes up and your fees remain minimal over the next several years. We strongly believe that Personal Capital is the premier personal finance software tool when compared to its competitors such as Mint. If you’re looking to avoid personal financial collapse, it makes sense to track everything in one place for *free*


  1. Young Manhattan says

    Tend to see the following mindsets in my early-mid 20s (I’m at the very low end of this spectrum currently)

    – 3-5 years of (smart/risky) hard work with little-no pay + windfall at the “end” and would rather just not do anything if they can’t achieve this


    -25+ years of mindless (semi-secure) work with steady pay and seem to be fine with that (not sure why)

    Great post! Fuel to the fire.

      • says

        Your walk through the mental/psychosocial changes that occur through financial success are, in my experience, 100% accurate. However I would go a step further in saying that they are true for any sort of success in life. It’s a part of willfully rocketing away from your family tree; looking at both the successes and the shortcomings of your parents, grandparents, and people you used to look up to and making the promise, “I will do better.”

    • Anonymous says

      25+ yrs mindless work is bundled with “free time”.

      Whilst A is working on his Utopian idea, B is hiking, attending “social” events, getting invited to bullshit networking full of morons trying to sell accounting/legal… at the “weekend”.

      TL;DR, B values “escape” over responsibility of being free (hard work & abstinence from drugs/women/mindless sex).

      • David says

        Fantastic comment. “Escape” and true freedom are not the same.

        Humphrey Bogart once said “The only point in making money is so you can tell some big shot where to go.”

    • Anna says

      The article does not describe my experience at all. My husband and I are 48 and 50 and have a net worth of 3.3 million. We married in our mid 20’s, both worked high paid professional jobs in a large city. We invested in real estate and made some money on stock options. We spent on things that mattered to us (I.e. nice home, travel), but not on things that didn’t (fancy restaurants and cars). The rest we invested. After working hard for 12 years, we cashed out and moved to a University town with our two young children. We bought 20 acres of land just outside of town and built our dream house. My husband continued operating his own business (making more than 250k per year), but was home every evening and weekend. I worked part time for myself, but mostly focused on raising the kids and volunteering in my church and the community. We continued to save. We are now semi-retiring. When our youngest heads off to college in 4 years, we will spend a lot more time traveling. We have done all this while staying close to our families and building a great group of friends. We don’t sense any envy. Our friends are generally doing pretty well too and there isn’t any one upmanship. It is very possible to build a high net worth and live a happy, meaningful life connected to your family, friends and the community.

    • G Money says

      Quickest/Easiest way to get to 100k/year for uneducated, unattractive, unskilled, middle aged white man would be…?

  2. JL says

    I think I need a fucking bath and reflect there a bit.

    All the tells you’ve mentioned just reminded me of that millionaire guy(who owns a travelling agency) I once met at a business convention last year.

    I had my eye on him as soon as he entered the big room (over 500+ people), took the balls to approach him(geez, thanks pickup?) and had a chat with him and his daughter throughout the day over some beer.

    Turns out my idea of faking a company ID(that says I’m the top IT staff at my grandfather’s engineering company – still undergrade at 19 at the time, haha) to give myself a well-treated pass was worth the shot. He was decisive, unphased, and slapped my young ass with wisdom after another as I learn more about how he sees everything(business, life and even his family) in his own eyes. It was fantastic.

    On a sidenote, well at least in my experience, I see that when you’re starting to transition in this way of life ($) you already get hints of those family and friend fall-outs and the drugs and the booze saying hi to you every once in a while.

    Sounds cheesy but overtime the art of staying level-headed is really an art in itself.

  3. says

    Good article, completely spot on. Have made good money through speculation and game development uptil my mid twenties and experienced 1)people not believing me 2) worse, huge number of intimates wanting me to fail. Lost a good deal recently, and the level of schadenfreude was predictable. Still building wealth, and moving forward, with the lesson being that emotional armour is key. As a younger man i didn’t understand the importance of that. These days, stoicism is my default.

    Great website, thank you for the many life lessons.

  4. James says

    Under “The Tells” section where you state that very wealthy people are not phased by brand name things….that is SO true.

    A couple of very wealthy men I know who are also confident and secure with themselves, do not show off at ALL. Very minimally if anything. For example, they might wear a very expensive watch – but then the rest of their clothes are relatively plain. Decent-looking, but plain. They do not try to look too “cool” or flashy.

  5. LongandShortofit says

    “help gold diggers look for the signs of a successful person” you say that like it hurts rich guys! If they all knew how to do this people wouldn’t have to waste money on luxury items to “signal”.

  6. Eccentric7 says

    I’m taking its positive if I’m having the same issues that are faced by 1.6m + people. At the 100k level already. The hate is too real, I notice people always trying to interview me and act extra friendly from 1st day meet. Trying to figure out how I afford this or can do that. Now red flags go up if a male
    Or broad tries to interview me.

      • Anotheros says

        Keep in mind that 100k in NYC is very different to 100k in many other places. Even here in central Europe, 100k outside of retirement savings is more than 95% of the population will ever have. The numbers used in the post will vary based on location because most of the experiences you describe are based on outside factors.

        Your advice is still sound and in my opinion, you’re not rich until you’re rich everywhere.

      • Eccentric7 says

        Well damn that opened my eyes a bit… tbh I have been living the yolo lifestyle for a bit. But you’re right it gets old quick. Cool I have Versace shoes….. but let’s get back to the money now.. Thank for keeping it clear love this site!

  7. Grant says

    The amount of spending required to ‘earn’ credit card rewards(MS/reimbursement notwithstanding) is usually wasted on junk purchases. At the level of income where credit card rewards are attractive, the amount of money spent on non-essentials(entertainment, consumer toys) is also non-trivial. Counterproductive.

    I work with a frugal deal maker. Only his attitude would suggest his wealth. He oozes a ‘don’t give a fuck’ attitude; not obnoxious, 100% relaxed. Bagged lunch, Hyundai, un-tailored chinos with ancient loafers. Showed $1.4 on his W-2 this year. He doesn’t drink, and lifts with a trainer every day.

    • JX says

      Another way to think about it is: house always wins. Spend money on a credit card? House wins. Spend money on a credit card to get points to spend money again? House wins again.

      Best to not even spend mental energy on it.

    • Christopher says

      In response to your first paragraph…not really…It’s usually a spend $3-4k within 3 months type deal which amounts to about $12-15k yearly. I don’t know many people that aren’t already spending that much yearly outside of mortgage/housing expenses.

      But I do in general agree that it’s best to focus your efforts on the big picture rather than small little one-off. Then again, it realistically takes about 15 minutes of your time that would otherwise have been used unproductively – not much harm in taking advantage of free money.

  8. says

    As usually, a great post altogether.

    Unfortunately, I took the red pill of wealth building a bit late (I am 34 at the moment) started about a year and a half ago, so my net worth is not near any of these categories.

    I’m trying with whatever I got at the moment, in order to win back some of the lost time of blindness and ignorance.

    I surely hope (believe), that sooner or later, I’ll pass through these steps, and I’ll be able to confirm your remarks once again.

    Thanks guys 🙂

  9. Ambitious says

    I just closed the $1.6M mark give or take and I’m not even 25 yet…. ( BTW writing that $1M check to the IRS on my 2.xM gain was fucking brutal – I should have moved to a tax haven)

    I am at a point where I’m starting to wonder “what’s next?”

    Unfortunately there isn’t much life advice for millionaires. This site has some.

    I am starting to wonder if I will regret not living a YOLO life (I dont enjoy getting drunk or going to raves) or if I am rationalizing it because im an introvert….Either way I know I am probably not finding that answer on the internet.

    Living a life on your own terms is kind of scary. It is unnatural and you become used to saying “no”

    • Wall Street Playboys says

      You’ll probably go down the yolo lifestyle path for a good year. Generally inevitable to live a temporary life of pure hedonism since you’re fortunate enough to get away with it.

      Then you’ll get bored and go back to chasing money becuase you will have seen enough in life.

      That’s generally how it works

    • JL says

      It’s actually fun, maybe spend more time with extroverts?

      Early 20’s guy here, trust me you don’t wanna be missing out both sides of the coin at our very age.

      Maybe a hidden fear of losing your work ethic, I mistakenly cut off a lot of people too before using the same reason which kinda led into me missing out a bit.

      You won’t. Just dive-in already, jesus christ.

      You’re confident of making more but afraid of losing a tiny fraction of it for something ‘new’ – senseless unless you don’t believe you can recreate it.

      You may enjoy it, or maybe not – but how the fuck would you know man c’mon.

      • Valiant says

        I got caught up in this cycle of “nothing but work” for a while – it’s an easy path to burnout. Now I’m spending some time relaxing on weekends (not evenings though) my mental health is improving. I’d love to purely focus on building passive income but we all need to blow off some steam every now and then.

    • Anonymous says

      If what you wrote is true, congratulations on your earnings esp for someone so young.

      Something important to consider is how you made your money.

      If you’re still trading time, you need put into a real asset.

      People plateau because they’re good at one particular thing. The Internet makes this an easy trap to fall into. If this is you, you still have a job.

      It sounds like you’re a desk jockey, probably trading stocks or some other bullshit. If I were you, I’d Elon Musk it and put at least half your net worth into a new project. Something bold and risky which will probably wipe out your seed capital. This will cure your introversion (you’ll actually have to sell) and will push you to a new plateau. You’ll also attract a group of people who’ll help you get there.

      Also, don’t use it to buy / merger. Use other people’s money to do that, your capital to feather your nest only.

  10. B says

    Started following on Twitter a while ago and just started reading. Missing this kind of mindset training for my normal reading / interactions.

    27 with a 4mm biz + mid six figure biz hopefully 7 by next year.

    Basically have given up everyone but my girl, biz partners and very select group of friends.

    Life is too short for people who don’t get it.

    Think the most important part here is focusing time on earning. Said this recently to an old friend who joined the peace core. I can do more for more people by making a single deposit than he will ever be able to do. He’s way smarter too.

  11. Own my Hood says

    Who has a 6 figure bank account with a $200k net worth? Unless you are in between deals that money should be working for you.

      • Own my Hood says

        I got you.

        Good article. It’s amazing how much of it rings true.

        I first experienced success and used to party a lot. Buckled down and focused on the biz 12 hrs a day, 7 days per week in order to keep out of trouble. Friends, fam, girls and creative pursuits went by the wayside. Now working on bringing a little “balance” back into my life.

        I’m guessing if you took a magnifying glass to the majority of people’s lives who excel at their chosen field (business, painting, particle physics, whatever) they would be very “unbalanced” compared to your average Joe.

  12. RealEstateGuy says

    Started to notice the ‘hate’ as soon as I began my career in Real Estate.

    I live in a small town with a luxury vacation real estate market where 75% of the population makes less than 30k. The majority of winners are 40+ while I’m 25.

    About to close a 9.5M+ cottage this weekend and know that the losers will be knocking at the door trying to get a piece.

    Pretty excited about ‘skipping’ the 100k & 200k brackets.

    Any other WSPBs in small towns?

    • Own my Hood says

      Yes. Hour outside of a major city, on the coast.

      Used to live in a major city. Grew tired of it. Could see myself going back though in a few years (biz has me kind of planted at the moment).

      Change keeps things interesting.

  13. Methos says

    Just wanted to note – “No one is going to hire me unless they are making a profit off of me” – may be true in the case of people who become rich, but it seems to me like the majority of employees are too lazy and/or stupid to produce enough value to justify their income.

    I’m a recent graduate working in programming for financial software and the 80/20 rule applies in terms of employee production easily. The real joke is on the guys who think they are special and getting ahead of everyone by doing most of the work and getting a few % points extra raise at the end of the year while their colleagues either browse the internet or just don’t understand what’s going on at all – and they all make basically the same income.

    There is a big project now to move the product to the web, and there seems to be literally one engineer on the team of 150 that actually knows the technology used well enough to make difficult, meaningful decisions. With such rampant disorganization and incompetency, it seems like this release will be a train wreck – but what if most things are done more pathetically because everyone works a job… The internships I was at before actually seemed far worse.

    • pinchharmonic says

      Man, same here. Recent graduate working at a big international bank as a programmer/analyst. It seems so unbelievably inefficient at times. I have barely done any work and yet earn a very solid salary. I’m using my time to learn more and more on my own, accumulate capital from minimalist living and the salary, and position myself better for a power move/event in the somewhat near future. Even though I’m not earning as much as an IB Analyst, I have a ton of time to spend learning and living a healthy, lower stress life (not saying some stress is bad). Would love to hear opinion on my strategy.

      • Wall Street Playboys says

        If you’re doing nothing at work just keep building a business on the side.

        Don’t treat it as a “side hustle” take it seriously. It is more important than your job which will never make you rich anyway. So focus every second of free time on that.

        The job is just to pay your bills… for now.

  14. A says

    As a 23 year old college grad I’m finding it really hard to believe some of the people posting here (Making millions a year already in their 20s? Wow).

    Must be internet marketing. I know it’s possible, just very hard to fathom. Can’t say I’m not extremely jealous. Most 20 – somethings have met are smart, but not that smart.

    Maybe I’m overthinking it. May be as easy as finding a few mentors and working with them (I have a very analytical mind).

    Already have a B2B sales gig lined up, so there’s that going for me. Still though, extremely jealous.

    • Ambitious says

      It takes about 1-3 years of hard work to make a million online if you find just 1 ‘mentor’ or maybe an additional year if you figure it out yourself.

      I pretty much sat down and tried to work every single hour of the day – even if that meant hanging out with a shit head in my industry for 10 hours to get 1 small piece of information.

      Now I’m super anxious and it has hurt a lot of social aspects of my life, but fuck it im a (almost) a multi-millionaire.

      Sacrifice a couple years.

      • Anonymous says

        Yeah. I’ve been finishing an extremely hard engineering degree over the past couple of years. I intended to go more into internet marketing after I was working and was not worried about the day to day of cash.

        I’ll look full into it after I get settled in my new B2B sales job.

        I think I may of talked to you on a different medium. Post pictures of Vegas a lot?

  15. says

    Mindset shift- everything is seen as sums of cash. Peoples time, buying labor, ideas, knowledge. Spending time and money on resources to leverage scaling.
    Everythings seen through the lens of leverage

  16. Not too late says

    So glad I found this website and hoping it’s not too late. I partied my way through college and got a sub 3 GPA. Through networking, I landed a job at a cushy Wall Street brokerage and have lots of downtime. I’m realizing i’m 27 and time is ticking. Just broke up with an LTR and was thinking how I need to choose either MBA (would need to crush GMATs to make up for my terrible GPA) or CFA (which would eat 4 years of my life which I’d never get back).

    To me the answer is simple… A simple mindset shift and I’ll focus on developing skills to start my own business. I’ll be able to focus on this hustle on weekends and a few hours at work. Why force myself to take the CFA or chase an MBA program that’s only going to push me further up the ladder in the corporate world, when I’d be better off living on my own terms with my own business.

    Not there yet, but appreciative of all the insight this blog has given me.

  17. ETA says

    People have two main drives in life: 1. Bonding with other people and 2. Value creation. These two drives go against each other. That’s why at $1.6M+ you often see those symptoms. They have invested all their time and energy in creating value, but not building relationships( quality ones). Over time they get desensitized from depriving themselves of these bonding(relationship) experiences.

    There was a research awhile ago that pointed out the fact that addiction to drugs comes as a result of lack of any meaningful connection with family and friends.

    My guess is that if you manage to balance the two drives, while trying to maximize them, you can build a dynasty.

    • Hamish says

      The first thing that came into my mind reading this comment was Donald Trump. He obviously has very strong family connections as evidenced by the inclusion and success of his immediate family into business/politics. This seems to feed into his continued drive for ‘value creation’ as you put it.

    • AC says

      That’s a very interesting research. If there is a huffpost citation, maybe add the link without the http so we can copy-paste it and view it?

      If not, with some googling we should be able to find it..

      As always great article WSP, generously sharing life knowledge once again

      • AC says

        That’s a very interesting research. If there is a huffpost citation, maybe add the link without the http so we can copy-paste it and view it?

        If not, with some googling we should be able to find it..

        As always great article WSP, generously sharing life knowledge once again

        Edit: found it, never mind, it’s a TED talk for anyone interested.

      • Wall Street Playboys says

        Comment was great the title of article is click bait making it more likely useless. But Google this if you want.

        The Likely Cause of Addiction Has Been Discovered, and It Is Not What You Think

        As any smart person knows, “research” is always way behind the time.

    • ETA says

      @WSPS Thanks for tweeting about it.

      A few articles ago you mentioned how low the % of millionaires in the States is, even in big cities compared to other international financial hubs.
      The states as a culture has leaned a lot towards the 2nd drive. If it continues like this, we’ll hardly see again something like what the Walton’s have done.

      You might not be able to choose your parents and siblings, but you sure can choose your friends, “wife” and/or how you raise your kids.


      He’s doing it right, that’s how it works.
      Those two drives might work against each other in the short term, but if done right they can feed into each other long term.

  18. JR says

    Always found it fascinating that drug and alcohol addiction seem to be equally prevalent at both ends of the economic spectrum; makes perfect sense when you dissect it though

  19. says


    I’m working on the addiction part, but I’m not quite there yet (too hung up on my workout routines to accept enough party invitations) – in addition, generally looking for stuff free of side effects (I do occasionally squat hungover. but it’s not recommendable)

    Looking for a way psychologically to the YOLO lifestyle, but unfortunately like being comfortable more than adventurous; I keep getting back to investing in personal skills, to be ready for change (and possibly death of money)… And investing (and scale thinking) is the opposite of YOLO. My damn genes and upbringing!
    Great post. I recognize myself on a few steps, albeit not all. However, I think I’ve established before that I’m not exactly your average finance guy.

  20. ExpatLibertarian says

    “Generally, most of these guys find “quick hustles” to make a few hundred dollars here and there.”

    I’ve never seen this before. As someone near 100k net worth at 21 I know my mentality would be best described as: learn a few more skills over a 3 month period for 10k increase in annual income. This is how I continue on my momentum from a engineer perspective, while I build up money to be able to start launching some shots at scale.

    I see in other friends who are a bit older and around the 100k mark they have built businesses and their mindsets are are about ebb and flow of of their incomes to maintain a life style. I would agree they are not thinking in terms of scale.

    To make money you need to be at the source, every level removed you are you get 1/10 of it. This is especially true in event cash flow scenarios but also base salary and job quality.

    • OB says

      If you don’t mind me asking, what type of engineer are you? I’m a senior CS major graduating this May….great perspective

  21. LosLobos says

    People with a million plus in wealth would barely be considered upper middle class in a city like Toronto let alone in cities like New York or San Francisco. A million dollars can’t even buy you a middle class house in major cities now. It would take a whole lot more for me to feel comfortable enough to live a yolo playboy lifestyle, not that I would want to, I’d rather play hockey everyday.

  22. DropOutSoftwareEngineer says

    This post made me realize that I am currently in the frugal bucket. I’ve been saving 70% of my income for about 1 year now. Thanks for help me recognize this BS. Gonna transition to be concerned with scale.

    P.S. Thanks to your posts I’m transitioning from programming since I realized I’m ALWAYS going to have to work for someone and going to a sales bootcamp to get better at sales and use it to grow my SaaS business. Can’t wait to update you guys.

  23. says

    How to make good money now – Just giving back value as sites like this have helped me out a lot.

    Google take-aways in your area. Majority will have links to either hungry house or just eat (I’m U.K based) with no actual website of their own. Take note of their numbers.

    Cold call all businesses and pitch a prospect of creating a website were they can take orders directly and not have to pay a commission to an affiliate. Give a charge of lets say £50 for site creation, roughly $80 and a recurring £10($15) a month for “maintenance costs.

    Learn how to make a website ( using Wix or Weebly its easy to learn with a little patience) or alternatively if you’re lazy like me pay someone on Fiverr to do it for you.

    Do this with 25 takeaways alone ( very easy in a town/city if you have a solid work ethic) and you’ll have £250/$360 a month going into your bank account for practically doing nothing.

    Tips? Sound confident on the phone. Dress sharp when meeting them in person. Have template websites to show them to show credibility. Convince them the value of taking orders directly and having an internet presence.

    This doesn’t even have to just be limited to take outs, can move to garages, flourists you name it… I’ve just found take outs to be easiest.

    Good luck & see you on the other side.

    • Goy says

      Doesn’t the business need a merchant account at a bank for this to work? PayPal or any other eCommerce platform remove the need to make a merchant account, but they obviously charge a premium, whereas a merchant account charges ~20-70 cents plus a discount rate of about 3%.

  24. idea1 says

    Your comment about frugality paired with scale was interesting. I hadn’t considered it that way, but it’s what I’m doing.

    I’m early 30’s. Launched my first business 4 years ago, and another last year. Together they’ll pull in ~2.5-3mm this year. I have a 3rd in the works.

    I live on 30k/yr. Of course, that’s a massive step up from the zero income I had for the first 2 years of business.

    I have 3 main reasons for this:
    1) I’d rather live simply than work for anyone else ever again.
    2) Even 500k/yr disposable isn’t private jet money.
    3) Hedonism and freetime get old. Building successful businesses is fun. The more successful, the more fun

    I’ll ease up on the frugality eventually, but I’m at the beginning of the exponential portion of the wealth generation S curve right now and plan to ride that for awhile.

    Anyway, good posts.

    • dotcom says

      I’m in the same boat in that I’d prefer to be “frugal” while investing excess money in investments.

      Business revenues in the ~1.5mm range with healthy margins (thanks, Internet marketing).

      Living expenses are $35k/year, partly due to being in a city with a low CoL for being a major metropolitan city.

      I’m not eating beans and rice, but I think moderation is key.

      I get high off of investing gains moreso than the common mentality of buying nice cars, a huge house and poppin’ bottles.

      • Ambitious says

        You guys are nuts, but I like it.

        I think there is a middle ground though.

        Pay for convenience and you’ll make good money. Live where you’d like to spend the majority of time, don’t cook food (unless you want to), pay for food delivery services, go to nice places, but spend the majority of time working.

        If you live in any major city – that’s gonna be around $5-6k/mo.

        I suppose it’s good to know you’re happy at $30k/yr. I am at similar income level and am scared of losing my $300k/yr lifestyle LOL.

      • Wall Street Playboys says

        Agree with you.

        This is where having a few glimpses of hospital beds comes in handy. Having an extra $2M at age 50 is not worth it if you don’t get to do anything from 30-35.

        People believe life is fun after 50-60… For most it is not. Even if worth a few mils.

        End of the day, everyone has their own goals, so these dudes will be disgustingly rich.

    • Ambitious says

      LOL. Agreed. They will be disgustingly rich.

      One point I realized (around $1,5M net worth) after my business went into a lull is that I couldn’t stop working.

      You guys made it to this point as well. I can’t imagine sipping Mai Tai’s or backpacking around the world for a year chasing 7s and “gaming”

      The idea of getting to $10M and then chilling out because you can make $400k a year on 4% returns won’t happen. You’ll keep going, so enjoy the ride. If something happens, then you’ll get bored of “chilling” and go off and start another business.

      Mike actually talks about what you guys are going through in his latest podcast a bit:

      • idea1 says


        I’m in a major metro area with a low CoL as well. $30k goes a ways.


        An extra $2mm in 20 years? Lol. Agreed; total waste of time. If I’m not closing in on mid 8 figures in 5 years I’ll dial back on the frugality. Felix Dennis’ statement was that he’d make $50mm as fast as possible and then reassess.


        $300k/yr lifestyle…damn sounds nice. One day.

        In the meantime: “Pay for convenience…spend the majority of your time working.” I’ve optimized differently. I make sure the vast majority of my “work” is limited to the very high value add stuff, which comes at irregular intervals. My limits are capital and development time, not my personal work bandwidth. Which means I can’t currently justify the cost of convenience.

        Start another business? Why limit yourself to one?

  25. the alchemist says

    “Group 1, the person typically buys a home with the majority of the net worth as a down payment on a home. Then. Begins large and material cost cutting initiatives across the board. Minimal water bills, minimal spend on practically anything and moves towards home improvement (done by himself) to keep gaining momentum by essentially spending less… all cash flow goes to that mortgage.”

    How funny. You’ve described my life 😉

    But it changed since. The ups and downs of starting own business. The house and mortgage are still there but at least all the extras put in early have paid off by giving me money now to cover my living costs while I’m plowing on with the start-up.

    This is not to say that spending your early twienties overpaying the mortgage is the recommended financial strategy. Just a positive aspect to rely on when you happen to be a late bloomer and that killer instinct only wakes up inside you when you’re approaching 30.

  26. Miyagi says

    The eccentric observation is spot on. However, i’ve noticed anecdotally that some of these characteristics are visible in the stage 1 – when you’re broke & young.

    I.E. for example, at the club you tend to ignore the group of friends you are with (If you go with a group) other than your solid wing man and your targets, girls.
    Eccentric behaviour given that the group tends to stay together, for the most part through out the night.
    – Simple social circumstances: if you are with a group for what ever reason i.e. class and you tend to ignore certain people as you see no value in them (even though you’re conscious of your own current valuelessness) / out of the conversation as it genuinely disinterests you. You come out as a dick to most people. Eccentric?

    Long story short – when young and broke some of these later characteristics are noticeable such as certain eccentric behaviours that deviate from the norm & to name another example, the fall out of friends also becomes evident even though currently your net worth is not getting higher.

  27. says

    Really interesting post, especially for me. I live in Slovenia, average salary per year is around $10k maybe less, the costs are lower, but I’d say that you can have a pretty good life if you make $10k per year. So if you make $20k per year, you can already live like a king here, just imagine what you could do with that money in Thailand. I love it. Great post, keep it up.

  28. Supramax says

    Wow I feel like I’ve fallen into a den of brethren souls here. I see a lot of good advice and encouragement here. I actually hope that some of this….what I’d consider entrepreneurial American culture gets disseminated to other countries where people’s minds are held down by traditional approaches to ‘making a living’ etc. I’m gonna add a few two cents for the young guys:

    -Your ‘take home pay’ is not your ‘feed corn’ – it is your ‘seed corn’ : David Deangelo. I’ll add to that and say that during your growth phase even your profits from your ventures are not ‘seed corn’

    -The stuff you buy will not give you satisfaction unless you literally use it and enjoy it every day (i.e. a car you drive every day) and then it will give you a bit more. Still, the stuff you DO and the people you do it with and for connections with will give you the most satisfaction

    -Your emotions are your ‘guidance system’. When you feel crappy about something you’re doing or someone you’re with it’s a good bet that the best thing to do is to plot a course away from it/them. The converse is also true – when you’re continually hearing about something that attracts you, being exposed to something that attracts you, or with people who attract you (yes that includes a woman) then it’s probably a good idea to plot a course in that direction. Listen to your inner guidance system

    -As advised by the fine commentary here by the young guys who run this forum: listen to your inner voice and fearlessly examine your self limiting beliefs because they are there. If you can’t look at them honestly because you’re afraid it will damage your psyche don’t expect to beat them. You can beat them – it’s part of your journey and growth & at the end of the day beating them is more important than any amount of money or notches with hot babes you can accumulate

    • Supramax says


      “I’ll add to that and say that during your growth phase even your profits from your ventures are not ‘FEED CORN’”

  29. says

    Im around the 800K+ mark now, and exactly what you’re saying Im going through. Trimming down the friends and negative family. Already lived the party life in my 20s and am only thinking of scale.
    I really like the point you make that 401Ks don’t count and they don’t. You cant touch till you’re 60 and if you do before that you pay 10% penalty.

    Point really driven home about how people try to scale through frugality. I know many people that have been trying that all their lives and has never worked.

    Thanks guys

    Keep it movin’

  30. says

    “At around $800K you become much more disconnected to society, uninterested in anyone who isn’t in the same league”

    This one in particular was the most interesting to me. Excellent post!

  31. Sergio Giacoman Soto says

    Pretty insightful. I do notice those patterns now that you mention it. Specially the YOLO group. There is no substitute for good financial wisdom, which is the reason why many famous people end up bankrupt.
    I agree for the most part about your perspective in frugality. For instance, I am a Junior in college, currently working while studying(forecasting a >$1000 student loan debt). Frugality is useful now that my funds, leverage and resources are tiny. However, I strongly agree that once my finances get to the point where they are sustainable, I am better off spending time creating a business/investment that will add me $thousands a year, as opposed to tirelessly reducing costs and maybe saving $500/year.

  32. Pod Student says

    The first phase, with zero income is very interesting because it would explain how so many famous artists are able to produce such masterpieces there whole life. Its simply that they have no income coming in and don’t become famous till after there death. So they are always motivated

    This explains a host of artists like Salvador Dali, to how they became so adept at there niche

  33. Hans says

    I was all the time like: Money? Who needs it?

    But then a buddy came with a BMW i8.

    I’m like: Now I get you guys. Money’s goooood.

  34. Aspiring Sales Engineer says

    Visited some friends of my parents this weekend. $1M+ lakefront home, didn’t wear a single name brand item (not even sunglasses), very modest people. Found out he was a successful salesman who went on to teach sales after reciting Zig Ziglar sales knowledge. Can’t make this stuff up

  35. Curt Smith says

    The comment about at some wealth level you become disconnected… First hand I view this as it depends on how you made your wealth. Inheritance, or some remote controlled company buyout, or from building a business with your own hard work and planning. The harder you worked, got your hands dirty, worked with others as a team, less discconnected I belive is your end ploint.

    I recently quit my day job on the backs of 5.5 yrs of hard work building a rental portfolio. All of the successful folks in my REIA (real estate investor association) folks wear old clothes with paint spots just like me, talk peer to peer to all accomplishment levels. I have seen nothing but humble caring from real estate investors nation wide. Check out a an online place to learn about real estate investing. Join your local REIAs.

    As a tip, wealth is created by controlling real estate and capturing the capital gain. The passive rent is nice to have but wealth (net worth) comes from the equity your holdings accumulate as the market appreciates. We have another 10 yrs in this run up from 2008. Buy with cash, bank financing, or lease and option from the seller or via seller giving you financing, wealth is in holding realestate.

    I don’t believe you can save or cut expenses your way into wealth accumulation. You need to leverage the work of others (Rich Dad Poor Dad), have them go to work and pay you monthly rent while you spend your time adding more rentals (or not).

    Best of luck!

  36. says

    Great article!
    One thing I noted in the family/friends fallout is that even if that family member or friend is really not jealous and still very welcoming and friendly to you, the relationship will still fall apart. I think it is due to two reasons, either you no longer relate to that person, no longer feel the vibe between you. Or somehow your brain realizes that said person is not necessary for your well being or survivability.

    It took me a while to realize that the people I feel excited about meeting or hanging out with got something that I want or aspire to have and that is the main motivation for the time spent together.

    I don’t know, it might be just me.

    Great article, keep it up

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