WEBVTT - Climbing the Wealth Ladder with Nick Maggiulli 0:00:05.559 --> 0:00:06.320 Boke No Trillions. 0:00:06.320 --> 0:00:08.600 I'm Joel Weber and I'm Eric Balchernas. 0:00:11.840 --> 0:00:15.560 Eric, I'm really excited we have Nick Madjulie back on 0:00:15.600 --> 0:00:16.560 the podcast today. 0:00:16.840 --> 0:00:21.520 I checked. He was on three years ago for his first. 0:00:21.239 --> 0:00:24.119 Book called Just Keep Buying, and he's just out with 0:00:24.160 --> 0:00:27.319 the second book, The Wealth Ladder, and I want to 0:00:27.320 --> 0:00:29.000 know more about the Wealth Ladder, how about you? 0:00:30.240 --> 0:00:34.120 Yeah, No, this is a Nick is an advisor, and 0:00:34.240 --> 0:00:37.680 advisors are the biggest consumer of ETFs, so you always 0:00:37.680 --> 0:00:38.400 want to hear from them. 0:00:38.400 --> 0:00:40.760 They are the users of ETFs, but. 0:00:41.240 --> 0:00:43.760 They're not they're using ETFs, but that's just one tiny 0:00:43.800 --> 0:00:47.040 part of what they do, and their people use them 0:00:47.080 --> 0:00:50.800 as behavioral coaches, life coaches, tax plan It's really a 0:00:50.840 --> 0:00:51.480 whole deal. 0:00:52.240 --> 0:00:55.279 And Nick is what I would consider like a cool advisor. 0:00:55.840 --> 0:00:58.080 Oh a little younger, you know, the average advisory age 0:00:58.080 --> 0:00:59.680 is like sixty sixty five. 0:00:59.680 --> 0:01:02.040 No jug no judging. 0:01:02.280 --> 0:01:05.880 Nick is part of Ritholtz and there have really really 0:01:06.000 --> 0:01:10.200 changed the way that advisors are even viewed because they're 0:01:10.400 --> 0:01:14.240 really they do conferences, they're in the media, they write books. 0:01:14.840 --> 0:01:18.399 They're just like just tons of content coming out of it. 0:01:18.440 --> 0:01:21.120 And his last book was called Just Keep buying, which 0:01:21.120 --> 0:01:22.760 is when he was on our podcast like three years 0:01:22.760 --> 0:01:25.240 ago and that was a huge hit, and I told 0:01:25.280 --> 0:01:28.480 him this, I thought that phrase just keep buying, really 0:01:28.520 --> 0:01:31.280 captured the moment. It's funny because he put it out 0:01:31.319 --> 0:01:33.479 right before twenty twenty two when the market went down 0:01:33.520 --> 0:01:36.720 a lot, but people in at least etf users they 0:01:36.760 --> 0:01:39.600 bought through it, and they also bought through the beginning 0:01:39.600 --> 0:01:43.240 of this year. So people have taken that motto to 0:01:43.360 --> 0:01:48.000 heart or he captured what they do with a perfect phrase, 0:01:48.120 --> 0:01:49.880 and so it's cool to see him back with a 0:01:49.920 --> 0:01:50.400 new book. 0:01:50.880 --> 0:01:53.280 Okay, this time Nick Majulie. 0:01:53.600 --> 0:01:57.160 He's the chief operating officer and a data scientist at 0:01:57.160 --> 0:02:03.920 written Bolk Wealth, this time on trillions the Wealth Letter. 0:02:05.080 --> 0:02:07.240 Nick, welcome back, Thanks for having me on guys. 0:02:07.720 --> 0:02:08.080 Okay. 0:02:08.200 --> 0:02:11.120 The book is The Wealth Ladder, Proven strategies for every 0:02:11.280 --> 0:02:14.320 step of your financial life. What is the Wealth Ladder? 0:02:14.840 --> 0:02:17.280 The Wealth latter is a new framework for viewing your 0:02:17.320 --> 0:02:20.960 finances and the main idea here is I break wealth 0:02:21.000 --> 0:02:23.240 into six distinct levels. We can get into those in 0:02:23.280 --> 0:02:25.720 a moment, but based on which level you're at, based 0:02:25.760 --> 0:02:29.079 on your net worth, it can help influence your spending decisions, 0:02:29.080 --> 0:02:31.919 your income decisions, your investment decisions, et cetera. And I 0:02:31.960 --> 0:02:34.280 think the main analogy I use, like in the intro, 0:02:34.440 --> 0:02:37.360 is like a fitness instructor would give different advice to 0:02:37.400 --> 0:02:39.799 someone who's like obese versus someone who's like a well 0:02:39.800 --> 0:02:41.760 trained athlete versus. 0:02:41.840 --> 0:02:43.520 Yeah, yeah, exactly. 0:02:43.840 --> 0:02:45.960 So I think that same analogy can apply to your 0:02:46.000 --> 0:02:48.320 financial advice. Right, So if you're like just starting out, 0:02:48.400 --> 0:02:51.000 you're going to give someone very different advice than if 0:02:51.000 --> 0:02:52.840 someone's you know, trying to get to let's say ten 0:02:52.880 --> 0:02:54.920 million plus or one hundred million plus, et cetera. 0:02:55.080 --> 0:02:57.200 Does it have to be a ladder? Can it be 0:02:57.240 --> 0:02:57.919 an escalator? 0:02:58.520 --> 0:03:01.040 It could, in theory be whatever analogy you want. I 0:03:01.040 --> 0:03:04.440 think the term the wealth ladder has been used a lot, 0:03:04.520 --> 0:03:08.120 but there's no official like, oh, this is the person 0:03:08.120 --> 0:03:09.800 that coined it or anything. It's just been kind of 0:03:09.919 --> 0:03:12.600 used as like there's like these stages to wealth, and 0:03:12.639 --> 0:03:15.520 so I just wanted to actually finally put you know 0:03:16.000 --> 0:03:18.480 my name on this phrase and actually define it. 0:03:18.480 --> 0:03:21.680 And wealth escalator just wouldn't sell it in the same 0:03:21.720 --> 0:03:23.680 way that the latter might. Yeah, So one of the 0:03:23.680 --> 0:03:26.280 things you say is we've been looking at wealth the 0:03:26.280 --> 0:03:28.720 wrong way. Why and how do you want us to 0:03:28.720 --> 0:03:29.200 look at it? 0:03:29.440 --> 0:03:32.520 I think people they understand this intrinsically, Like the difference 0:03:32.520 --> 0:03:35.800 between zero having no money in ten thousand dollars is 0:03:35.920 --> 0:03:38.240 pretty large for people, Like if you go from zero 0:03:38.360 --> 0:03:40.360 to ten thousand, that can like reduce a lot of stress, 0:03:40.400 --> 0:03:43.320 et cetera. But then even someone going from like one 0:03:43.360 --> 0:03:45.640 million to two million may not change their life all 0:03:45.640 --> 0:03:47.640 that much, I mean relatively right. And so of course, 0:03:47.680 --> 0:03:49.560 like ones a million dollar change the other ones a 0:03:49.600 --> 0:03:52.160 ten thousand dollars change, Like, it's not linear in terms 0:03:52.200 --> 0:03:54.560 of the happiness, enjoyment changing your life, et cetera. And 0:03:54.600 --> 0:03:58.560 so there's this kind of diminishing marginal utility of money. 0:03:58.640 --> 0:04:00.640 You know, as you have more of it, it's becomes 0:04:00.720 --> 0:04:02.880 less and less valuable. Right, you need a bigger boost 0:04:02.920 --> 0:04:05.400 or a bigger hit, so to speak, to see the 0:04:05.440 --> 0:04:08.440 same jump and happiness or well being, live satisfaction, et cetera. 0:04:08.520 --> 0:04:11.640 And I think people realize that. And so by defining 0:04:11.680 --> 0:04:14.040 the wealth ladder and the way I did, I think 0:04:14.040 --> 0:04:15.760 it's a better way of looking at money and thinking 0:04:15.800 --> 0:04:18.120 about spending income investments, et cetera. 0:04:19.839 --> 0:04:22.160 Yeah, I like the way you did this and you 0:04:22.200 --> 0:04:26.240 had you posted something on Twitter and I'll just read 0:04:26.279 --> 0:04:28.919 off of what it is. And it was a little controversial. 0:04:28.920 --> 0:04:31.320 Some people debated this. When you talk about wealth and 0:04:31.440 --> 0:04:34.240 like classes, I think people can be touchy. 0:04:34.839 --> 0:04:35.800 But here's what you say. 0:04:36.120 --> 0:04:38.680 Under ten thousand, wealth is paycheck to paycheck. 0:04:38.760 --> 0:04:40.279 Level one ten. 0:04:40.120 --> 0:04:43.640 Thousand to one hundred thousand is grocery freedom, which is 0:04:43.680 --> 0:04:46.520 where you can buy groceries without worrying about it. And 0:04:46.520 --> 0:04:49.000 then level three is restaurant freedom. That's one hundred thousand 0:04:49.080 --> 0:04:49.719 to one million. 0:04:49.800 --> 0:04:52.679 And by the way, if you mentioning, this is net worth, right, yeah. 0:04:52.480 --> 0:04:55.680 This is net worth and household net worth, yeah, not income. 0:04:57.000 --> 0:04:59.760 And then level four is travel freedom one million to 0:04:59.839 --> 0:05:00.440 ten ten million. 0:05:00.480 --> 0:05:01.920 You can travel when and where you want. 0:05:02.400 --> 0:05:05.520 Level five is house freedom ten million to one hundred million. 0:05:05.760 --> 0:05:07.600 You can afford your dream home with little impact on 0:05:07.640 --> 0:05:11.240 your overall finances. And then finally level six, which is 0:05:11.960 --> 0:05:14.800 where I am, but Joel wishes he was one hundred 0:05:14.880 --> 0:05:17.839 million plus. You can use money to have a profound 0:05:17.880 --> 0:05:21.279 impact on the lives of others, you know, businesses engaged 0:05:21.279 --> 0:05:24.360 in philanthropy, et cetera. So I think it was the 0:05:24.400 --> 0:05:26.919 middle upper middle class where you got a little weird 0:05:26.960 --> 0:05:30.480 like if you know, middle class being up to a million, 0:05:30.520 --> 0:05:32.560 I think was part of it. But can you talk 0:05:32.600 --> 0:05:36.240 about the feedback you got from that and what was 0:05:36.320 --> 0:05:38.560 like the points that were most contentious. 0:05:38.800 --> 0:05:41.560 I think I noticed that got two point three million 0:05:41.560 --> 0:05:42.599 eyeballs that post. 0:05:42.760 --> 0:05:45.560 So yeah, so that post said, like, okay, level one, 0:05:45.600 --> 0:05:47.440 which is less than ten thousand, I said, that's lower 0:05:47.440 --> 0:05:49.800 class ten thousand to one hundred thousands. Level two that's 0:05:49.839 --> 0:05:52.680 working class. Level three, I would say that's middle class. 0:05:52.680 --> 0:05:55.200 That's one hundred thousand to a million dollars. By the way, 0:05:55.200 --> 0:05:57.359 that's about forty percent of households. So there's twenty percent 0:05:57.440 --> 0:05:59.800 Level one, this is US household US households, twenty percent 0:05:59.880 --> 0:06:03.560 L one, twenty percent Level two, forty percent in level three. 0:06:03.600 --> 0:06:05.720 So that's now eighty percent of the entire US has 0:06:05.800 --> 0:06:08.719 less than a million. About eighteen percent are in level 0:06:08.720 --> 0:06:11.000 four that's one to ten million, and then the top 0:06:11.040 --> 0:06:12.920 two percent is level five and six, which is ten 0:06:12.960 --> 0:06:16.159 million plus. And when I said, you know, one to 0:06:16.240 --> 0:06:18.240 ten million was upper middle class, of course, some people 0:06:18.279 --> 0:06:19.880 are like, well, if you have you know, six million 0:06:19.920 --> 0:06:22.640 dollars in Alabama, you're definitely upper class. I'm like, yes, okay, 0:06:22.680 --> 0:06:25.080 you can, you know, use these examples. But like if 0:06:25.120 --> 0:06:27.000 you have six million dollars in New York, I wouldn't 0:06:27.000 --> 0:06:28.960 say you're necessarily upper class, right, so I think you're 0:06:29.000 --> 0:06:29.719 upper middle class. 0:06:29.720 --> 0:06:31.200 You're obviously doing well for yourself. 0:06:31.240 --> 0:06:33.400 But you know, with the price of an apartment even 0:06:33.440 --> 0:06:34.560 like it's pretty expensive. 0:06:34.640 --> 0:06:34.839 Right. 0:06:34.880 --> 0:06:37.680 So anyways, I said this, it's very controversial. I tried 0:06:37.680 --> 0:06:40.159 it to make it as useful as possible and like 0:06:40.279 --> 0:06:44.080 agnostic to location, and I think the idea here is, 0:06:44.640 --> 0:06:46.200 you know, what I'm especially what I'm seeing is like 0:06:46.240 --> 0:06:48.160 the upper middle classes. I define it with the one 0:06:48.160 --> 0:06:49.640 to ten million range. There's a lot of people in 0:06:49.640 --> 0:06:51.400 that range, eighteen percent of the US, and it's it's 0:06:51.480 --> 0:06:54.239 tripled since nineteen eighty nine on an inflation adjusted basis 0:06:54.360 --> 0:06:56.560 used to be about seven percent. So yeah, eighteen is 0:06:56.600 --> 0:06:59.040 not exactly triple, it's like two and a half times larger. 0:06:59.400 --> 0:07:01.520 But that's kind of the big change that's happened in 0:07:01.520 --> 0:07:04.080 our society. I'm starting to see it in other ways, 0:07:04.120 --> 0:07:06.400 like the AMX lounge is overrun at the airport. You 0:07:06.440 --> 0:07:08.760 go to a nice resort and like you have to 0:07:08.760 --> 0:07:11.400 go out at seven am to get your pool chair, right, 0:07:11.400 --> 0:07:12.520 because people race to get them. 0:07:12.520 --> 0:07:12.880 So it's like. 0:07:12.880 --> 0:07:15.080 There's some sort of scarcity thing going on where the 0:07:15.160 --> 0:07:17.640 upper middle class is like being overcrowded. And I think 0:07:17.680 --> 0:07:19.560 a lot of people aren't talking about that, and that's 0:07:19.600 --> 0:07:21.280 kind of one of the issues I wanted to bring 0:07:21.360 --> 0:07:22.360 up with this book as well. 0:07:29.920 --> 0:07:34.080 So we talk about these levels, right, what percent or 0:07:34.240 --> 0:07:36.760 how would you describe people getting up to these levels 0:07:36.800 --> 0:07:40.880 because this stock market went up a lot versus income? Right, Like, 0:07:41.320 --> 0:07:43.200 if I look at somebody who has a million in 0:07:43.280 --> 0:07:46.480 net worth, is that typically a lot? Like how much 0:07:46.520 --> 0:07:48.560 of that is just because the market went up? So 0:07:48.640 --> 0:07:51.360 we talk about these like scarcity where you have a 0:07:51.360 --> 0:07:55.080 lot of people fighting for chairs and the MX lounge. 0:07:55.600 --> 0:07:57.560 How much of that is on the back of the 0:07:57.680 --> 0:08:01.679 US stock market because I don't are people really making 0:08:01.720 --> 0:08:02.400 that much more money? 0:08:02.520 --> 0:08:04.160 Or is a lot of this the wealth effect because 0:08:04.200 --> 0:08:04.760 of stocks? 0:08:05.720 --> 0:08:06.360 It's a mix. 0:08:06.400 --> 0:08:08.800 And so that data I'm quoting that all the data 0:08:08.840 --> 0:08:10.840 I use for these percentages was twenty twenty two to 0:08:10.880 --> 0:08:13.680 twenty twenty three. It's it's the survey of consumer finances, 0:08:13.680 --> 0:08:17.240 which is across those two years, and at the time, 0:08:17.400 --> 0:08:19.640 if someone's in level four, so one to ten million, 0:08:20.160 --> 0:08:22.600 roughly thirty percent of that wealth on average is in 0:08:22.640 --> 0:08:26.480 their primary residence, and in terms of the retirement account, 0:08:26.520 --> 0:08:28.960 it's about twenty five percent. So over half of that 0:08:29.080 --> 0:08:31.200 wealth of someone in level four is typically going to 0:08:31.200 --> 0:08:35.440 be included in their house and their retirement account. So 0:08:36.040 --> 0:08:39.240 the other half would be other things vehicles, obviously cash, 0:08:39.360 --> 0:08:41.680 other stocks they have if they own a business, anything 0:08:41.720 --> 0:08:44.320 like that. So roughly half of that wealth if you're 0:08:44.360 --> 0:08:46.640 in level four should be in kind of these less 0:08:46.679 --> 0:08:49.719 liquid assets, right retirement home equity. So how much of 0:08:49.760 --> 0:08:52.640 that is being due to the stock market going up? 0:08:52.840 --> 0:08:54.960 A decent portion of it is obviously over half of it. 0:08:55.760 --> 0:08:57.880 But you know, I don't have the new The new 0:08:57.920 --> 0:08:59.400 estate is going to come out next year, and we'll 0:08:59.400 --> 0:09:00.800 look at it then and see like, oh, has that 0:09:00.840 --> 0:09:02.720 gone up, has it gone down, et cetera. But I 0:09:02.720 --> 0:09:04.480 do think there is quite a bit of paper wealth 0:09:04.480 --> 0:09:06.240 here where like, hey, well my house is worth this, 0:09:06.280 --> 0:09:07.960 but you can't really access it outside of like a 0:09:08.280 --> 0:09:11.080 heelock or something. So I think the main thing to 0:09:11.120 --> 0:09:14.360 think about here is just like, well, either way, there's 0:09:14.400 --> 0:09:17.040 still a lot more people in this kind of bucket 0:09:17.320 --> 0:09:20.000 level four, as I call it, and because of that, 0:09:20.120 --> 0:09:22.520 like they are spending more, they're traveling more. I think 0:09:22.559 --> 0:09:25.160 that's what's changing a lot in the United States, and 0:09:25.200 --> 0:09:27.440 it's impacting you know, consumer goods in that sector. 0:09:27.600 --> 0:09:28.280 In particular. 0:09:28.760 --> 0:09:32.200 How walled off are each of these levels, Like how 0:09:32.240 --> 0:09:34.440 often are we seeing people go from level three to 0:09:34.480 --> 0:09:37.040 level four, level four to level five, or you know, 0:09:37.200 --> 0:09:37.640 vice versa. 0:09:37.679 --> 0:09:38.160 I supposed to. 0:09:38.520 --> 0:09:41.120 Yeah, so it depends on the timeframe. So I covered 0:09:41.120 --> 0:09:42.839 this in chapter ten in the book, and this was 0:09:42.840 --> 0:09:44.320 actually kind of one of the reasons why I wrote 0:09:44.360 --> 0:09:46.959 the books. I basically wanted this like mobility matrix, which 0:09:46.960 --> 0:09:49.520 would be like, hey, if you start in level three, 0:09:49.559 --> 0:09:51.719 like after ten years, what's the probability you're going to 0:09:51.760 --> 0:09:52.320 be in level four? 0:09:52.360 --> 0:09:55.360 Because my assumption is that this wall is getting higher, right, 0:09:55.440 --> 0:09:59.440 it's getting harder and harder to advance out of levels. 0:10:00.120 --> 0:10:01.280 There's an entrenchment on ust. 0:10:01.520 --> 0:10:04.400 So I haven't looked in that at in particular, like 0:10:04.440 --> 0:10:08.160 looking at the switching rate, let's say from nineteen eighty 0:10:08.240 --> 0:10:10.839 nine to nineteen ninety nine versus ninety nine to two 0:10:10.840 --> 0:10:12.800 thousand and nine. Obviously that's a weird period because of 0:10:12.800 --> 0:10:15.640 the GFC, But you get my point, and either way 0:10:15.679 --> 0:10:17.680 that in general, most people are in the same wealth 0:10:17.720 --> 0:10:20.640 level after a decade, right, So, and that's that's at 0:10:20.720 --> 0:10:22.680 least true, like across every wealth level. So if you 0:10:22.679 --> 0:10:24.520 start in level two a decade later, you're very likely 0:10:24.520 --> 0:10:27.480 to be in level two. If you start in level three, 0:10:27.559 --> 0:10:29.880 you're seventy two percent of households will still be in 0:10:29.960 --> 0:10:31.760 level three after a decade. If you're in level four, 0:10:31.840 --> 0:10:33.800 seventy two percent will still be in level four after 0:10:33.840 --> 0:10:36.200 a decade. Three percent make it to level five, et cetera. 0:10:36.280 --> 0:10:38.200 And all this data is in the book, right, and 0:10:38.280 --> 0:10:41.120 so we can talk about it just in general, like 0:10:41.480 --> 0:10:45.040 just across all wealth levels, agnostic with the levels, about 0:10:45.040 --> 0:10:47.160 twenty one percent of households will go up one level 0:10:47.160 --> 0:10:49.559 within a decade, about three percent will go up two levels, 0:10:49.559 --> 0:10:51.360 so one in four are going to be up a 0:10:51.400 --> 0:10:51.920 wealth level. 0:10:51.960 --> 0:10:52.080 Right. 0:10:52.120 --> 0:10:54.640 So once again, these some of these levels are pretty broad, 0:10:54.679 --> 0:10:56.480 like level four is one to ten million, so you 0:10:56.520 --> 0:10:58.400 can stay in that wealth level. Doesn't mean you didn't 0:10:58.440 --> 0:11:00.680 build wealth, right, So it's another thing to think about here. 0:11:01.160 --> 0:11:02.560 It's just I'm trying to say, like what are these 0:11:02.559 --> 0:11:04.520 big step changes those are the ones that are kind 0:11:04.559 --> 0:11:06.920 of important have probably a bigger impact on our lives. 0:11:07.559 --> 0:11:09.800 And the same thing, how many people fall down the ladder, 0:11:09.920 --> 0:11:13.160 It's about twelve thirteen percent over the course of a decade, 0:11:13.240 --> 0:11:15.120 even though the course of two decades it's about the same. 0:11:15.160 --> 0:11:17.400 So that doesn't really change much, right, So whether they're 0:11:17.400 --> 0:11:19.240 talking ten years or twenty years, the number of people 0:11:19.280 --> 0:11:21.200 that fall down the ladder is about you know, let's 0:11:21.200 --> 0:11:24.360 say one to ten in some fashion. And the number 0:11:24.360 --> 0:11:25.760 of people that go up the ladder, as I said, 0:11:25.800 --> 0:11:28.080 is about twenty four percent over a ten year period. 0:11:28.280 --> 0:11:30.520 Over a twenty year period, it's about thirty seven percent, 0:11:30.559 --> 0:11:30.880 so it's. 0:11:30.760 --> 0:11:31.280 A bit higher. 0:11:31.320 --> 0:11:34.640 So there is still a lot of positive mobility. I 0:11:34.640 --> 0:11:36.640 don't know about the time factor though, which is what 0:11:36.679 --> 0:11:37.080 you brought up. 0:11:37.080 --> 0:11:37.600 It's a good point. 0:11:38.320 --> 0:11:40.679 You have clients in all these ladders, I take it. 0:11:40.880 --> 0:11:43.400 Yeah, we we have clients across the wealth ladder, right, 0:11:43.400 --> 0:11:45.960 we have those. I mean technically we don't have a minimum, 0:11:45.960 --> 0:11:48.719 So we have people with some probably not many, with 0:11:48.840 --> 0:11:51.040 less than ten thousand. Some would just maybe just less 0:11:51.080 --> 0:11:53.520 than ten thousand with us, but they may have obviously 0:11:53.520 --> 0:11:56.160 assets elsewhere, they own a home, et cetera. But for 0:11:56.160 --> 0:11:57.840 the most part, yeah, we have people across that. We 0:11:57.880 --> 0:11:59.880 have people technically in one hundred million plus. We don't 0:11:59.880 --> 0:12:01.840 have too many of them, but we have a handful 0:12:01.840 --> 0:12:04.400 of one hundred million dollars plus clients. And then we 0:12:04.480 --> 0:12:06.840 have obviously our our bread and butter is level four 0:12:06.840 --> 0:12:08.480 and level five, which is you know, one to ten 0:12:08.520 --> 0:12:09.679 and then ten plus. 0:12:11.120 --> 0:12:14.160 Because you do talk about like like this is just money, right, 0:12:14.240 --> 0:12:18.640 and there's also just like happiness and general you know, 0:12:18.840 --> 0:12:22.320 content with yourself and and you talk in here about 0:12:22.360 --> 0:12:26.280 some of the you know, there can be some things that. 0:12:26.280 --> 0:12:27.720 Go wrong when you get a lot of money. 0:12:28.720 --> 0:12:33.160 Relationships, family dynamics, your kids, stress levels. 0:12:34.280 --> 0:12:35.760 Is that something you've noticed. 0:12:35.440 --> 0:12:39.240 Like is already correlation to other things like the more 0:12:39.280 --> 0:12:42.000 money you have, the more paranoid you get, or the 0:12:42.000 --> 0:12:44.920 more you hate taxes in in a weird way, or 0:12:45.320 --> 0:12:47.640 I don't know. I'm just thinking about this because sometimes 0:12:48.080 --> 0:12:51.440 I sometimes think of that famous chart that USA Today 0:12:51.480 --> 0:12:54.359 used to put out with like countries ranked by happiness, 0:12:54.960 --> 0:12:57.400 and like I think Nigeria was like number one and 0:12:57.440 --> 0:12:59.920 the US is like twentieth, And I wonder if there's 0:12:59.920 --> 0:13:04.320 an any kind of other correlations with general disposition or 0:13:04.360 --> 0:13:06.960 happiness or anything like that with these brackets. 0:13:07.600 --> 0:13:09.880 So there is data on happiness and income and then 0:13:09.920 --> 0:13:12.480 also data on happiness and wealth. And so most of 0:13:12.480 --> 0:13:14.360 your audience has probably heard of the conom and deed 0:13:14.360 --> 0:13:16.520 and study, which is like, oh, once you earn over 0:13:16.559 --> 0:13:20.520 seventy five K year, your happiness doesn't increase. Long story short, 0:13:20.640 --> 0:13:25.280 that data wasn't exactly correct. It's the measure was. It 0:13:25.320 --> 0:13:29.240 wasn't measuring happiness. It was measuring unhappiness, which is kind 0:13:29.240 --> 0:13:31.720 of a weird thing. So it was saying that after 0:13:31.800 --> 0:13:36.199 seventy five K year, you can't prevent unhappiness, which is 0:13:36.240 --> 0:13:38.000 a weird as a double negative, right, so it's kind 0:13:38.000 --> 0:13:40.000 of hard to think about. But long story short, a 0:13:40.000 --> 0:13:43.080 guy named Matthew Killingsworth sat down with Condom and they 0:13:43.120 --> 0:13:44.959 look through the data and everything. While Cocondom is still alive. 0:13:45.000 --> 0:13:47.360 They look through it and they agreed that the measure 0:13:47.440 --> 0:13:51.199 was wrong. And so the new takeaways. No, happiness keeps 0:13:51.240 --> 0:13:54.440 increasing all the way up with your income, but only 0:13:54.480 --> 0:13:57.320 if you're already happy. So if you're unhappy, more money 0:13:57.360 --> 0:13:59.200 is not going to make you happy, right, especially if 0:13:59.200 --> 0:14:01.200 you have a lot of money. So if you're unhappy. 0:14:01.240 --> 0:14:05.160 I mean, let me just summarize the findings. If you're poor, 0:14:05.320 --> 0:14:08.160 more money is likely to make you happier. If you're happy, 0:14:08.440 --> 0:14:10.520 more money is likely to make you happier. But if 0:14:10.520 --> 0:14:12.959 you're not poor and you're not happy, more money's not 0:14:13.000 --> 0:14:14.720 going to do a thing, right, That's kind of the 0:14:14.760 --> 0:14:16.720 main takeaway. So they found like, hey, if you're unhappy 0:14:16.720 --> 0:14:19.160 and you're in level three or level four, money's probably 0:14:19.160 --> 0:14:21.560 not the issue. It's something else going on. And I 0:14:21.600 --> 0:14:23.840 think that's the big takeaway from the research. It's not 0:14:23.920 --> 0:14:26.200 out there people still believe, oh the seventy five thousand 0:14:26.200 --> 0:14:28.400 thing that's so old that needs to be like killed 0:14:28.440 --> 0:14:30.960 already and just gotten rid of, because there's new data 0:14:30.960 --> 0:14:33.080 out there that shows like across income and wealth is 0:14:33.120 --> 0:14:35.600 probably even stronger than income. The more you have, the 0:14:35.680 --> 0:14:38.400 generally the happier you are, assuming you're already happy. 0:14:38.440 --> 0:14:40.760 That is it, flatline though, Like oh it kep's going 0:14:40.800 --> 0:14:41.560 to just keeps going. 0:14:41.400 --> 0:14:43.160 Out, but you have to be happy. It only goes 0:14:43.240 --> 0:14:44.760 up if you're happy. So the people who are like 0:14:44.800 --> 0:14:47.680 not even thinking about like, oh I'm not happy right now, 0:14:47.720 --> 0:14:50.680 Oh do I need more money? Like that's it it's 0:14:50.720 --> 0:14:53.120 a very it's very ironic, like the people that aren't happy. 0:14:53.160 --> 0:14:55.240 If you're looking for money is the solution, that's not 0:14:55.320 --> 0:14:57.640 the solution. But if you're just if you're loving life, 0:14:57.680 --> 0:14:59.680 everything's great. If I just gave you an extra million bucks, 0:14:59.720 --> 0:15:02.560 you'd be even everything'd be even happier for you. So 0:15:02.640 --> 0:15:04.680 like that's kind of a weird irony here. 0:15:05.360 --> 0:15:07.640 In other words, if you're not happy and you have 0:15:07.720 --> 0:15:10.440 this big void inside and you're trying to fill it 0:15:10.480 --> 0:15:11.520 with money, it just won't. 0:15:11.760 --> 0:15:12.720 You can never fill it. 0:15:13.040 --> 0:15:14.720 Yeah, exactly, not with money. 0:15:14.720 --> 0:15:17.280 It's something else maybybe accomplishment or something else might be 0:15:17.320 --> 0:15:19.200 able to fill that. But yeah, if it's not, of course, 0:15:19.240 --> 0:15:21.520 and then excluding people who are like very poor, like 0:15:21.520 --> 0:15:23.560 if you're if you're in like abject poverty, Like, yes, 0:15:23.640 --> 0:15:24.880 money is going to make you happier. 0:15:24.880 --> 0:15:27.040 There's no debate there. It's clear in the data. 0:15:28.440 --> 0:15:32.760 It feels like Rosebud fits in here somewhere. Yeah, so 0:15:33.080 --> 0:15:34.800 this is a podcast about ETFs. Let's bring it back 0:15:34.840 --> 0:15:37.600 to ETFs. How do ETFs figure into the wealth ladder? 0:15:38.200 --> 0:15:40.480 I mean, the big takeaway from the wealth Flatter, at 0:15:40.560 --> 0:15:43.920 least on the investment side, is those in levels one 0:15:43.960 --> 0:15:46.880 to three, less than twenty five percent of their assets 0:15:46.920 --> 0:15:49.920 on average are an income producing assets things like stocks, bonds, 0:15:49.960 --> 0:15:52.560 et cetera. That ETFs would you know, you'd hold three ETFs. 0:15:52.960 --> 0:15:55.440 Those in levels four to six have over half of 0:15:55.480 --> 0:15:58.520 their assets and income producing assets. So like that is 0:15:58.560 --> 0:16:00.960 the big difference between those lower on the wealth flatter 0:16:01.000 --> 0:16:03.280 and those higher on the wealth flatters. Those lower on 0:16:03.320 --> 0:16:06.040 the wealth flatter don't own that many assets that produce income. 0:16:06.280 --> 0:16:09.000 Those higher on the wealth flatterer have the majority of 0:16:09.040 --> 0:16:12.080 their assets are actually assets that produce income of some sort. 0:16:12.160 --> 0:16:14.520 So that's you know, you could be retirement account with 0:16:14.560 --> 0:16:18.480 an ETF, individual stocks or you know stock ETFs things 0:16:18.520 --> 0:16:21.160 like that, or owning an individual business. So in terms 0:16:21.200 --> 0:16:23.280 of like what are the things to think about, and 0:16:23.320 --> 0:16:25.200 I kind of show this in chapter three. It shows 0:16:25.200 --> 0:16:28.520 like how much percentage by each wealth level, like what 0:16:28.560 --> 0:16:31.359 percentage is in retirement accounts, what percentage is in businesses, 0:16:31.480 --> 0:16:34.400 is in stocks, real estate, et cetera. And looking through that, 0:16:34.480 --> 0:16:36.800 it's very clear that you know, level four, which is 0:16:36.840 --> 0:16:39.680 like the most the largest wealth level after you know, 0:16:39.720 --> 0:16:43.720 in the upper end they primarily have a lot of 0:16:43.760 --> 0:16:46.680 their money in stocks, retirement accounts, other types of income 0:16:46.720 --> 0:16:48.080 producing assets of that sort. 0:16:48.360 --> 0:16:51.280 When it comes to ETFs, I've always thought, you know, 0:16:51.320 --> 0:16:53.880 and I wrote when I wrote the Bogel book, especially 0:16:53.880 --> 0:16:58.000 low cost Vanguardian type ETFs, that they are kind of 0:16:58.000 --> 0:17:01.640 a gift for advisors in any people because you don't 0:17:01.640 --> 0:17:04.520 have to worry about them, Like, once you lock into those, 0:17:05.080 --> 0:17:07.600 they're so low cost, you can literally just get. 0:17:07.480 --> 0:17:08.400 Married to them. 0:17:08.720 --> 0:17:10.639 You don't have to fuss with your investments that much 0:17:10.720 --> 0:17:12.200 because you know you're in the good stuff. 0:17:12.800 --> 0:17:14.760