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The right way to think about money? How does it impact your lifestyle.

Conceptually, someone with $9 million vs. $10 million (11.11% difference)? Largely the same despite having a large $1,000,000 nominal spread.

That same $1,000,000 vs. $100,000? Massive difference in lifestyle (900% spread)

One thing you probably noticed reading us over time is that we use a ton of percentages. This is because you’re forced to think this way over time. Just because you can make money off something doesn’t mean you should. You don’t see deca-millionaires waiting 1-3 hours for a free ice cream!

Important Concepts

Most people think improvement is linear. Some x = y perfect 1:1 line. Instead the real world is set up with exponentials. Lots of nothing, step function up, lots of nothing, step function up. The same actually applies to money as well. If you do a 20% gain from any wealth level, the lifestyle you have will not change. $10K to $12K? Basically the same. $1M to $1.2M basically the same.

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Think about levels instead. Life is extremely similar to a video game.

Someone with $100K is not at the same level as someone with $1M. Similarly, $3M and $1M are completely different. $3M and $8-10M are also completely different. So on and so forth. Arguing about the exact dollar cut off isn’t relevant, it’s the rough percentage change needed to make the next level.

Most financial discussions burn time about the exact number. You should already know your number because it will be based on what type of lifestyle/level you want to retain. If you cannot see yourself spending more than $100K a year, there is no reason for you to aspire for more than $2.5M. Get to $2.5M and anything above that is gravy.

This also means that certain financial strategies are useless. If you want to get to $10M, skipping coffee isn’t a useful comment. If you want to get to $50M you should care more about tax havens than “tax loss harvesting” at the end of the year. On the lower end, if your goal is to get to $2-3M, you definitely don’t need fancy accountants or lawyers (a basic living trust will do just fine)

Income is Never Wealth

This is the last important item we separate out. Income has absolutely nothing to do with wealth. Nothing at all. If you make $1,000,000 a year but spend $999,999 a year, you’re broke. While making money helps create wealth, the point is the same.

“Rich” is defined by how much you could earn if you did nothing. (Spoiler, no one who gets to $5, $10, $20M+ is going to do absolutely nothing - too boring)

• Level 1 - Mental Stability: You could survive about 6-9 months without working and without an unemployment check. If you’re below this, you’ve got serious issues. Absolutely all costs should be cut to zero, living in monk mode, getting to stability.

• Level 2 - Skill Building Zone - $100,000: At this point you are not going to be homeless. As long as you’re not gambling it all on sports/casinos you’re going to be fine. All focus is on building skills/sources of income. WiFi Money, working an odd job, doing weird side hustles like flipping hot products, so on and so forth. At this point you’re looking to scale something else beyond the paycheck

• Level 3 - Realize Time for Money Doesn’t work - $700,000 (7x needed): We’re not even going to a million. If you’re around this level you already know ***you will be a millionaire***. The main trap to avoid is buying far too much house or keeping up with appearances (draining cash flow)

• Level 4 - Typically 2-3 forms of income - $3-4M (~5x needed): At this point you’re financial independence light. You are not rich in any tier 1 city (NYC, Miami, LA, SF etc.). In fact, you won’t feel rich at all. The reason you have low stress is because you *can* decide to move. If your income all drops to zero, you can pack your bags and live a nice life in 100+ different areas (Nevada, Abroad, Carolinas etc.)

• Level 5 - Majority Small Biz Owners - $6-8M (~2x needed): This is our first level of actually being “rich”. $7,000,000. We get this number by assuming you have a paid off house (around $4-6M liquid earning about 5% - $200,000-$300,000 without moving a finger). Don’t care what all the LARPs say on X app. You’re perfectly fine in a Tier 1 city. You’re not the top dog by any means, but you’re set.

• Level 6 - Low End Legacy - $15-20M (~2.5x needed): We’ve stated that $25M is the easy cut off for post economic wealth. Even at $20M, you’re generating $1,000,000+ even with boring government bonds. Absolutely no shot you’re struggling. Not in NYC, not in CA, nowhere.

• Level 7 - Power and Influence - $100M+ (A huge 5x needed): This is where you have public influence. The exact threshold is impossible to know. That said at $100M you can certainly influence at a local, city and maybe even state level. You move the needle in every single room you walk into (except the illusive billionaire row where you’d likely get invited to the White House at least once).

Now that you have the seven levels, we can walk through how to get there, what is a waste of time and you can decide what is “rich enough” for you. Our definition of rich is level 5 since that is where we’ve seen a huge swath of people lose interest in talking about money. That’s a big sign in public settings. If the guy doesn’t care about career trajectory, investing ideas or starting a new business, he’s probably at or above the ~$7 million marker. He also exhibits next to no stress on his face. The biggest tell of them all.

Level 1: Getting to Mental Stability - 6-9 Months Expenses

This is the only level where FIRE type mentality works. It’s actually a perfect phrase for this segment. FIRE is supposed to mean Financial Independence Retire Early. In our world view it just means fire. Your financial life is quite literally on fire.

If you’re in this camp: 1) no job pays too little, 2) no paid fun is allowed - enjoy the library and the outdoors and 3) legitimately coupon clip. Do whatever it takes.

We doubt any of our readers are in this group or even the second group, but for all of the extended family that needs tough love, there it is. Monk mode + trade time for money. You have no other choice.

Level 2: $100,000 - The First “Aha” Moment

Your mentality is to begin converting your income into equity. Read that 100 times if needed. Income needs to be converted into equity.

The second goal is to convert your earning into equity. This second one is reserved more for Level 3 but the idea begins to resonate here.

Cash is just a protective layer. Much like your skin. You just need a small amount of it to run the entire machine.

Trap 1: Most people start upgrading their lifestyle too early. Since they feel safe they think there is no real risk in upgrading immediately. The risk is that they become reliant on someone else. While you’re free to go out a couple times per week, the real risk is in bold italics. By upgrading your spending a bunch, you’re actually handing over your future to a middle aged manager running spread sheets all day. Hint: you’re not family to him.

Trap 2: The faster you can get away from time for money exchange the better. Conceptually this is extremely hard to understand until you live it. Your first online sale of $100 is going to hit like a kilogram of recreational drugs. You’ll realize that the sale came in while you were not working. Someone clicked on a link somewhere, went to your website and clicked buy. If you spend the next 1, 3, 5, 10 years renting out your time (doing consulting/odd jobs) you’re losing valuable copywriting and ad reps.

Trap 3: The big one is a psychological trap. You look at your income and savings rate. You decide that saving an extra 5% isn’t going to make a difference long-term. This is how you start spending instead “what is the point”. Guess what? You’re actually right. There is no point in trying to squeeze a few extra dollars out of a salary. That game has been maxed out already. Go find people who made it. You’ll find that none of them were trading time for dollars.

Level 3: $700,000 - Middle Class Trap

Yes. We’re saying around $700,000 in wealth is middle class still. Not because of the math but because of the lifestyle. Again. That is what wealth is really about. What type of life you can afford.

In this band you will get the vast majority of NPC talking points. They will be obsessed with dumping everything into the S&P and taking out a low rate mortgage. House Hacking, driving beater cars, etc.

The Vibe: Most people lever up for a simple reason “my net worth goes up but my freedom and quality of life isn’t changing”. Every year they are able to grow the digits on the screen. However. Each year they are eating the same stuff, taking the same vacation and driving the same car.

The real issue they face? They are still time trapped.

Majority at this level have no real control over their day to day lives. Someone else decides when they show up for work. When they can travel. When they have to be sent to a new city for a business meeting. So on and so forth.

In addition to this, due to their focus on retirement and NPC talking points, their wealth is typically illiquid: 1) house and 2) 401(K)/IRA/Retirement account.

On paper, you’re doing great. You’ll be fine in old age (60+). However it doesn’t feel like success.

Most blow it right here. They lever up buying the most house they can afford, the nicest car they can afford and simply ship their monthly spending into those two items + a retirement account.

Fine on paper, trapped due to being illiquid. Don’t be the purple bar on the left.

Your goal is to move that green portion of the bar chart. You already see that is the difference between the rich, ultra rich and the middle income section. You want to become business equity rich and cash poor (as a percent of wealth). You do not want to be house rich and cash poor.

You have no excuses when it comes to building equity and liquidity at this point. You’re not going to be on the streets. You’re going to be completely fine in retirement.

Time to graduate into the mental illness that is paid ads, tech stocks, crypto, performance based roles and scalability.

Level 4: $3-4M - First Significant Lifestyle Jump

Wait, wait, wait. BowtiedBull said there would be a lifestyle component to each level. Where is that? Guess what… it is exactly the same until level 4. The only difference is personal stress levels.

If someone has $100,000 or $700,000 the quality of life isn’t going to budge much at all. You know this intuitively because places like Miami have tens of thousands of BMWs. Some of them are being driven by millionaires while others are being driven by people who make $50,000 a year. The naked eye cannot tell the difference.

In fact, you could psyop anyone into thinking you’re a millionaire.

What Happens at $3-4M? Well you start living a life that is not possible to fake. The YouTubers try to fake being multi-millionaires (Larping in clubs, daytime activities etc.). It doesn’t work. This is because a person with around $3-4M is consistent.

Since you know you can pull in about $150,000 - $200,000 while doing nothing, you’re simply going to change your daily routine. You’re going to eat out more. You’re going to go to the nicer places more. The frequency is impossible to fake. Instead of taking a bunch of photos at Cote in Miami, you’re simply going there on a weekly basis.

The most common phrase is this one:

“Celebrating something special tonight?” vs. “Oh hey (name) how have you been!”

Does not take any social skill to realize the second person is playing a different game entirely.

You are 90% Location Agnostic: Yes we made 90% up. The concept is the same. You can basically live a high quality life in 90% of the cities in the world. With $3-4M, you’re not living it up in NYC. However, you are certainly living it up in Tier 3 cities and below.

Anything Outside of These Major Metros and You’re Living Large

You Have Bought a Lot of Freedom: You no longer need to work a job you hate. You don’t need to grind long hours if you don’t want to. You’ve cracked open the door to the main event. You’ve basically got the nose bleed seats to the superbowl. You got in but you’re not in the lime light.

The only real trap here is pretending you’re bigger than you are. Overspending on luxury travel, buying a McMansion, wild private schools that don’t even have great results. So on and so forth. These are all related to social/status games. Avoid status games.

Your entire focus is on optimizing your equity and time for equity ratio. You have too much talent and too much experience to do nothing. May as well use it for maximum ROI on everything you do.

9/10 times you will have at least three sources of income. Example being: 1) a couple rental properties, 2) your main wifi biz cash flow machine and 3) a hobby consulting/W2 set up.

Per usual, if you don’t believe us, LARP as a rich guy needing to talk to a wealth management firm in your city. Ask what their typical client profile is. They will heavily lean to small business owners and some real estate!

Level 5: $6-8M - You Are Rich

This isn’t video game money where you can spend and not care. You’re not flying private. You’re not rubbing shoulders with politicians. You are time rich (can do what you like when you like) with no regard for variable expenses. Variable would be food, transportation, concert tickets, baby sitters, house cleaning, dry cleaning etc. All of this stuff doesn’t move the needle on your annual burn.

You do not need an alarm clock. That’s the level of freedom you get in this band.

In addition to that? You’re officially Location Agnostic.

List of Lifestyle Benefits: 1) you can live in any city you like, 2) the next generation - unless you have a full puppy litter of kids - is set for life and 3) all of your income is now discretionary - you can start any business you like and quit any business you don’t like.

You are in a structurally different world from the people in the $3-4M band who are in a completely different world than people with ~$1M or less.

To top it all off? Even if you have a small family, you don’t need to make any quality of life trade offs.

Traps: The main traps are Ladies, Liquor and Leverage. Essentially hedonism and greed. We would typically list “keeping up with the Jones’s”, however, most people who get to this level have no interest in that game anymore. They spend on some luxuries here and there but they already went through the trial and error of realizing a massive fixed cost base is no different than debt. A massive stress inducer and liability

Opportunities?

We’re confident that a ton of people who read us will be at this threshold in about 3-5 years. If you think about it the long-term readers are somewhere in the $2-3M range already. Layer in some more work, some investment returns and you can see that easily getting to this band.

The game changes to the following discussions: Tax planning, estate planning, asset protection and volatility of portfolio.

Tax Planning: Deciding if tax havens make logical sense. Moving to a no-state tax area. Should you start a new company as a S-Corp, C-corp etc. These decisions now matter.

Estate Planning: Living trust? Yep. Now need to look into irrevocable trusts and blind trusts in certain circumstances.

Asset Protection: You care a lot more about insurance and big blow up risk. Anyone here needs an umbrella insurance policy for freak accidents.

Volatility of Portfolio: You begin to care a lot less about the exact return and care more about the total portfolio swing. You begin matching the volatility (expected worst case down draw) to your annual earned income. If you can put away $600,000 a year and your liquid portfolio is around $5,000,000, you’d want to have a rough volatility around 10-15%. If everything goes bad and you’re down 10-15%, your general earned income makes you flat anyway (you just buy more shares, more bonds etc.).

This allows you to continue to build wealth without being in some ugly situation where you income goes to zero and your investments are down 80-90%.

In short complexity is a real issue around this level. At $1M and below, asking for an accountant, lawyer, tax strategy, complex estate? Just a waste of time that should be spent on increasing equity

Level 6: $15-20M - Post Economic

None of your important decisions are based on digits increasing. Most of your important decisions are related to your personal life. You can even fly private on occasion and ignore the sticker price on any vacation.

Fancy Opportunities: Most of them are frauds. Instead of friends and family showing up to ask for a “$10K loan because it is nothing to you”, the real scaled up scams show up. Suddenly you get calls from private wealth manager, private equity managers and various cap tables that are home runs.

If you’re wondering why so many celebrities and athletes go broke, this is one of them. Ship out 20-30% of net worth into a single bad private deal and you’re setting yourself behind by 3, 5, or even 7 years.

Major Differences: Unlike the prior level, you do have access to the top level of spending. Private flights are certainly doable if you absolutely need them.

The big issue is that security becomes a bigger dilemma and you need to become more guarded. No dopamine based investments. No private pitch decks. No massively concentrated bets that were given to you by someone else. You should only have heavy exposure to things you fully control (such as your own business).

Waiting Around for Lady Luck: At this point it is basically up to her. If you are going to get to $100M+ or not. If there was some sort of magical step by step map, everyone would talk about it. The truth is that you need luck.

Money doesn’t make a good business. In fact money could make your business worse. Trying to use cash to solve any problem that comes up “just hire a new designer” “just switch to a new manufacturing company” “just spend more money on a new angle”. Money doesn’t make you more talented or capable. Not in the slightest

Level 7: $100M+ - Walking Institution

If you find yourself in this position, you’re a walking public company. Seriously. The amount you’re in charge of could be a small family office. In fact that’s where you’re going to go.

No one in this level is worried about inheritance taxes or gift taxes. They are busy setting up family offices for succession planning. Trust structures and security are now priority number one.

You can get to Level 6 rich by being a cut throat and intense business owner. However. To get to $100M+ you are 9/10 times commercialized. If you mention your company, someone within any 30 person room will know the name. Can’t hide if your product is sitting on a shelf in Costco, that’s for sure.

What to do at this point? Well Felix Dennis gave it all out years ago. In paraphrased terms:

“Get to $30M or so (post economic), then spend time doing things he liked poetry, planting trees, being entirely location agnostic. In the end, the goal of wealth is to buy time not toys”

Summary

People obsess over exact numbers so we gave them out in this post. This is as of 2026. Just remember that inflation will change all of this in 5, 10 or 20 years. The amount of money that allows you to free up all your time is the first level of rich. In the future that might be $10M, in another decade or two it could be $20M!

Being rich is all about how much you can do if you don’t work. This is because you’ve removed time from being a constraint on your life.

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

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The biggest things we’d say are:

1. Go back and make sure you’re adjusting your views on what is “necessary”. Don’t compare a safe company in 1970 to today. Safe in the digital era is completely different

2. Practically everything happens with a lag. Even during the 2020 inflation pick up, riskier assets like crypto didn’t move until the wealth effect took place

3. Income inequality is MASSIVELY different. Do not think about what a top paid employee will do, think about what the top 1% wealth holders will do

On that note lets get started!

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We’re going to address this topic now as some of you are going through something similar ***today*** and many will go through this over the next 3-5 years or so. While it’s unlikely that the majority exit for some obscene number like $975 million, there is a huge cliff when you have a paid off home + $3-5M liquid to your name

Autist Note: Yes. We seriously believe that the typical person who follows the right path can get to ~$3-5M and a paid off home. We also believe ***literally*** anyone can become a millionaire (just work a ton of jobs and live cheap). Therefore the rough “you tried and didn’t get crazy lucky” line is around $4M + paid off home in a nice area. If you get to $10M, $50M, $100M+ by the time you’re middle age then congrats. It’s certainly possible. Just know that you need a bit of talent or luck on your side to get to mid 8-figures.

Preamble: You Will Have At Least One Identity Crisis

In fact, we’d wager that you have more than one. Typical triggers are company sale, career loss, health event, becoming a parent, kids leaving the house, selling a company, retiring etc. Anything with heavy changes to daily life.

We’ve stated that practically everyone you meet has survived at least a couple catastrophic events. Could be psychological (personal life - divorce etc.), could be financial (bankruptcy, etc.), could be health related (bad luck in a car accident).

It is bad decorum to complain about your past as an adult. Chances are high that the person you’re talking to has had a similar disaster.

Examples of Events That Lead to Crisis

If you are forward thinking, you’ll avoid the easy identity crisis events with planning. Not hard to figure out that you won’t be in night clubs at 45. Not hard to figure out that your vertical leap will be non-existent later in life. Not hard to figure out that you won’t have a banner year financially in a linear fashion from 20 to 60. So on and so forth.

Like everything in life the first step is to avoid the easy pitfalls.

Easy to Avoid Example: College athletes struggle with identity post graduation. The majority are forced to simply go into the corporate world. Since they were living off of local fame for the past 8 years (high school star, college campus big shot) when they lose all of it… Their identity gets crushed. Every year people care less and less about your past accomplishments and no one will take you seriously by the time you’re a few years out of college.

This is pretty easy to get ahead of. Unless it is painfully obvious that you’ll be a highly paid professional athlete, you gear all of your college efforts into the “next phase” of life which is work and eventually a business.

Crisis averted with basic planning.

Harder Example: You sell your first Company. If you were making $150,000 a year and suddenly sell a small company for $5M, this can create a huge problem. Even if you tried to have varying interests (athletics, religion, pets/kids, etc.) that windfall is going to mess with your entire identity. You can’t build anything meaningful with low effort (at least not your first rodeo). Your dedicated time to this was well above 70% and even with the guardrails, you will quickly slip into “is this it”

So far, we haven’t seen a single person avoid this process.

Every single successful person we know has at least a few months of pure chaos. Spending a bit too much, buying stuff they don’t need and general hedonistic tendencies that spill out due to the sudden influx of money + free time.

The best way to fix that one is simple. Start building another project. The only benefit to selling an asset is that you’ll have free time. If your next build ends up selling for $2M instead of $4M it doesn’t matter. You already won the game early and the new project is just an outlet for pent up energy and cognitive skills/abilities.

The easiest way to trick your brain is by saying “if you don’t build something new, you might fall behind and lose everything!” This works because it is partially true. If you don’t keep your mind sharp, you are playing with fire.

Autist Note: Please do not assume that because you have money, that will make the next idea easier. It is completely unrelated. Seriously. You have massive knowledge and capabilities. That is why it is easier. If you started your last business with $25K, you definitely don’t need more than $50K for the next one (exception to the rule building rockets and craziness like Musk)

Objective is to Dampen the Blow

As you can see, we’re already predicting failure. Not just for you. For everyone (yes we went through that already!)

You will have a least one and more likely two events where your identity takes a huge hit. This post is designed to help you avoid the obvious ones and come up with a few tips and tricks to recover faster when Mike Tyson shows up with that KO punch.

When you’re at your peak, the only place to go is down. Flatten the slope and you’ll find yourself on a new peak in the future.

Manage Your Identity Like You Plan to Manage Health. Expanding the good years vs. taking the elevator down.

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Part 1: Finding Your Areas of Identity Weakness

A large portion of life comes down to self awareness. If you develop the ability to see yourself from a third person lens, you’ll quickly see your own faults. As an example our own faults are painfully obvious: low empathy, non-existent emotions and blunt/cynical writing style (luckily that last part doesn’t bleed into social if you master “smile, nod and agree”). We doubt anyone here would be foolish enough to ask us “my GF just broke up with me how do I recover” type stuff.

You should be able to make a similar assessment. To help with that process here are some good examples of potential identity pitfalls:

• Attractive Person: Typically hits women more than men. Does apply to men though. Biology comes for us all. If you’re in this camp, you need to rapidly use the social leverage. If an attractive person fails to maximize the open doors, the next step is “the world got mean”. Not quite, they were just reliant on borrowed time

• Athlete: Already quasi-covered since the majority will at least know someone who fell off after being the College star. It happens at the professional level as well. The only difference is that the professional can typically pivot into training camps/gyms etc. Unless you’re playing Golf, best to have a pivot planned in advance for when you will top out

• Rich Guy: People forget. We’ll always say Wealth > Health. This helps us avoid the entire “richest man in the world” game. Tons of people chase digits on a screen for no reason. They risk $10M to chase $30M only to go back to $1M. It’s all due to an identity crisis about being “the rich guy”. The bigger problem? Even if you do make it big, you realize life isn’t that much different

  • Quick test if this is you, the following post will live rent free in your head for the next year:

    

• “Only a Parent”: Actually a dangerous one. If your entire ID is solely around being a parent, when the kids leave you’re left with a big black hole. You can make your family the #1 priority but it can’t be the only priority. This also helps you avoid the classic trust fund baby/lazy kid outcome

• Founder/Originator: Eventually you are pushed out. You learn that everyone is replaceable even the creator himself! Pretty tough pill to swallow if you don’t have any other immediate start up ideas

• Artists: Those celebrities go crazy for a reason. Have a banner year, then suddenly lose momentum, fall out of the limelight and next thing you know it’s alcohol, drugs etc. Most of these types have limited roots/grounding since they are used to people constantly asking them for favors. After grabbing that big win, better to *already* know the next steps: investor, real estate, venture funding etc.

• Extremely Smart Person: This usually just leads to a combination of arrogance and resentment. Neither outcome is really good. After another decade passes, cognitive abilities will decline and the bill shows up (typically over leveraged bets and public displays of anger - Jesse Livermore (combo of smart + rich guy syndrome - source)

If you recognize yourself in any of these seven options, we suggest a slow pivot. It is unlikely that someone turns it around in 24 hours. Life isn’t Disney. It is completely reasonable to start diversifying your identity over the course of a year or two.

A healthier example is to map out the likely identity crisis events and have a marker to slowly flip it. Athletes should simply pencil in age 35 as the rough time to get off the “1 rep max, I still got it personal best” train. Typically leads to a lifelong lingering injury. Instead it should be “I’ll use age based bench marks vs. personal records and reduce training days”

VO2 Max, Grip Strength, Heart Rate, Body Weight Reps + Bike Sprints are a Good Start

Since that is an easy and obvious one, a simple solution is to bucket your life into four clear categories. You will always have one category that is dominant “parent” “founder” “artist” “Chasing Money” etc. You simply need three other sub-categories to avoid a collapse when a major event occurs in the dominant category.

Duty: This is where the majority of your time goes. If you’re younger it is making money and building that business. When you’re older it typically shifts to parent and confidant. Your main priority is either a family or sending the elevator back down at a government/local level

Capability: Your second identity should be related to the capability you are building. It could be fitness, a new industry or a new company. The common theme is solving a new problem that you have not tackled before. For those in the know we have actually done this here on the paid stack going through various phases of trying something new (currently learning the entire home building process from scratch!). This is by design. It is a capability that is useful and doesn’t interfere with primary duties.

One Game: Every year video games are knocked as a waste of time. Fair enough. You still need at least one entertainment hobby to avoid the classic "dull rich guy” stereotype. Surfing, hiking, music, pottery, animal shelters, volunteer work at a local event… so on and so forth. While a large chunk of charity work = tax write offs and some sort of scam, there is a lot of real value being created as well. Be part of that section

Creative: While you don’t want to end up as a street artist pulling in $100 a day for a living, there is a lot to be said about creativity. Especially now with everyone trying to copy paste the latest trend over and over again. Art, music, writing, doesn’t matter. Choose one and get good at it. There is a 100% chance it will bleed into the other three categories by osmosis

Tally It Up

Ask yourself how you would operate if one of them went away completely. This is tough to imagine because it could typically crumble the identity of the person. As an example an artist who works a minimum wage job to barely pay the bills would have a much bigger psychological hit if they could no longer make art vs. losing their minimum wage job.

Once you have this we suggest diversifying the main identity.

Example: If you identify as a business owner and builder, the second you get your payout you should learn investing. This is exactly what we did and preach here (consistent messaging!). This is because operators have much shorter shelf lives versus investors. Hedge Funds, Mutual Funds, Family Offices are all run by people in their 50s, 60s, 70s and even 80s. Nowadays it is much harder to run a large company at age 60.

Second Example: If you identify as a parent, you want to have a slow adjustment process for when the kids become more sentient. They won’t be living with you forever and you already know the big markers: 1) going to elementary school, 2) competing high school where specialization begins and 3) college/workforce/vocational school etc.

You want to identify less and less as a “parent only” every 5 years or so.

Third Example: If you identify as being the ultra smart person in some subject, you absolutely must attempt new things every year. The problem with large success + IQ is that your human interactions become incredibly imbalanced. Extremely unhealthy set up as you eventually get displaced by the next generation of talent. If you’re never in a position to ask for help/guidance the feeling of arrogance/resentment will ratchet up in a straight line.

Part 2: Map Out the Likely Events

Now that you understand why this happens, its wise to map out major life events.

1. Around middle age there is a HUGE chance that you will be cut from a high paying W-2. This is simply how it is. Any high paying W-2 (Tech, Wall St. etc.) has a thin up or out culture.

2. By around 35 you will notice material physical declines no matter how much you rely on next generation hormone replacement therapy. Have a plan for where you’ll place those extra hours that used to go to the gym (Golf, learning an instrument - anything)

3. If you decide to have kids there will be a large identity change around when they are born, when they go to school, when they specialize and when they leave. Four major events!

   1. Side Note: Large chunk of you will have at least one exit. Once you do, please don’t be psyopped into thinking it is harder than having kids. You will have more than enough time to run a small business (or more) unless you plan on having 10-20 of them. This makes logical sense as small business owners… typically have kids! If it was “impossible” to do so, they would sell and quit. They don’t though

4. Death of parents. Another ugly topic but think about the probabilities. Don’t assume that they will live past 80. If there is something you’ll regret, go ahead and fix it today (not tomorrow). Parents to kids and parents to pets = one directional unconditional love. When you lose that, it’ll likely cause a lot of volatility if you can’t say they lived a great and full life

5. Sudden Empty Nest. Probably the worst outcome. Just assume that everyone you talk to on a daily basis is gone tomorrow. Do you have any sort of game plan to get back on your feet? If not it’s something to consider. Standard phrase we’ve used “hope for the best, prepare for the worst”

We would wager that the majority do not have plans for all five of these items. 90%+ of people have an fragile identity gap that needs umbrella insurance (so to speak). If you walked through all of this and said “I have a way of getting back to baseline that doesn’t involve self destruction” you’re golden

Healthy Transitions

Again. No matter what you will get clipped at least 1-2 times by a real identity crisis. It will happen to everyone. That said, here is a decent framework for how to transition identities based on age band/life events.

• Early age you should be the high performing all out working/building. This is about 80-90% of your identity. Going out Thursday and Saturday is basically your max social life. Risk is high that identity takes a hit with every set back. However, you’re the founder/originator by default. If you don’t try this you end up 1) regretting it for the rest of your life or 2) end up being pushed into the bottom of the K-shape anyway. Easy call

• Next transition is typically health. Seems a bit counterintuitive but along the way to making it, you will notice you are not as sharp as you once were. Now you’re still in founder/operator role but you’re probably able to get max results with about 65% of your identity. This opens up a new lane to maximize your physical potential and mental capabilities to play the slow decline game.

• Transition to Parent is the most common. Again. If you don’t plan to have kids skip this step. Typically after feeling financially set and in good shape, that is goldilocks for extending your bloodline. For a period of time, you will likely be operating at 45% owner/operator 45% parent 10% health

• Transition to Capital Allocator + Parent. This is where a lot of the identity crisis occurs. If you’re plugged in, you will recognize that you don’t have the ability to keep pace vs yourself at 30. Take as many PEDs as you like, it isn’t comparing. Luckily, the out is becoming a capital allocator as you look at your spreadsheet “If I find ways to drive slightly higher returns it’ll basically be the same as starting a tiny Company”. This your queue to pivot, typically 50% parent, 15% capital allocator, 25% operator and 10% health and fitness

• Transition to Legacy + capital allocation. If you make it this far, you’re now at the home stretch where most of your effort is just capital allocation and legacy. Could be charities, could be local government, could be some grand parenting, etc

Directionally, all of this is the healthiest way to plan out your identity changes. Least this is what we’ve seen. We’re somewhere around bullet 3 and four. We use this website for capital allocation transition + hobby artistic release + legacy. Pretty good combination of three in one. If we can’t even explain why we’re buying something then it’s probably a garbage investment anyway.

Part 3: Adopt Some Basic Stoicism

This line of thinking gets mixed results. Some argue that stoicism attracts sociopaths who feel no emotion. Others believe it is healthy for emotional regulation. We’re somewhere in the middle.

Unhealthy Stoicism: Your dog gets struck by lighting in a freak accident and dies. You don’t get mad, you don’t get sad, you feel nothing and just throw your hands up and say “whelp freak accident nothing i could do”. Probably a good sign to see a psychiatrist

Healthy Stoicism: Same event happens you’re immediately mad, frustrated, sad or a combination. Instead of taking out this frustration out on your friends/family, you process it by yourself over a few days. This is what healthy stoicism is. You didn’t do the standard “lash out on other people” who had nothing to do with the event in the first place. The vast majority of people have poor emotional processing and if they got in a fight with their wife/husband that day, they’ll take it out on the entire office/team etc.

If you want a rough benchmark more of the “fairness in dealing with others”, a little bit of “don’t panic over things you can’t control” and NONE of the non-attachment + frugality stuff. The last two leads to some serious psychological issues if you don’t have any connection with anyone/anything and live like a monk.

Why This Helps

Adopting a little bit of this framework will help you accept and process the natural identity hits you’ll take. You will not forget the day you suddenly lost your “it” power.

• One day you’ll wake up and suddenly that vertical jump of yours is gone

• One day you’ll wake up and suddenly you’e the “old guy” in Vegas

• One day you’ll wake up and the kids have no interest in sleeping in your bed or playing tag, they actually prefer to do be out of your line of sight

• One day you’ll wake up and your contact list that was 40-50 people deep will be thin at about 5 real personal life connections

All of this is normal and planning for the identity shift will give you much more utility out of life. Which is the goal. Dying knowing that you’ve maxed out every ounce of utility that you could find (or close to it)

Summary

You guessed it.

We’re predicting a general identity crisis in the USA which is why we’re posting this now.

As tech continues to ramp up, the people who tied their identities to clocking in and clocking out will be in for a rough adjustment period.

The majority will find that career = rented identity. Not owned identity. No badge. No title. No weekly catch up meetings. No bi-weekly paycheck for excel work that can be done by Claude.

Then what?

The answer is they are forced to follow the same playbook we’ve had out for a decade. Building a niche asset. Investing in the choke points. Constantly testing demand for new trends. Investing in “You, Inc.” the only company where you’re the 100% owner. And. Making the process repeatable (finding another trend riding it).

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

• Old Books: Are available by clicking here for paid subs. Don’t support scammers selling our old stuff

• How ETH is Staked: Covered (here)

• Crypto: The DeFi Team built a full course on crypto that will get you up to speed (Click Here)

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The incentives are there. 1) you can freeze them, 2) they are low cost - no overhead with branches, …

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Despite crypto being boring, we’re always going to find interesting things during the standard 12 month bear market.

Pessimists sound smart but optimists make the big money.

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In a sentence? All of these robots need to be charged by *something*

For stocks, we’re big fans of investing in the constraints. For those that have read us a long time, it was a lot easier to invest in the Semiconductor Index (SMH) than figure out every single chip company. You shouldn’t have time for that anyway since you’re too busy building wifi money. Crypto is the same. It’s a honey pot for government money printing which has a 0.0000000001% of going negative long-term (only issue is it is cyclical).

Our general theory on Power Demands follows the same thought process. Could be wrong like anything in life but it’s worth spelling out much like our other general themes: degeneracy, rich vs. poor divide, large companies vs. niche companies and avoiding the middle which gets squeezed

Part 1: Infrastructure Matters Again

From the 2000s until around 2020 or so, you didn’t need a significant amount of computing power. In fact, there was a time frame where you could just run a laptop and it would last years. Click fast forward and now we’re in a completely different revolution, a Power Revolution. While you don’t need your own Data Center running in the middle of nowhere, you do need access to it if your plan is to employ a bunch of AI agents and begin trusting code for blocking/tackling.

Underpinning all of that? A huge infrastructure build out. You still need the computer chips but you need much more than that. You need servers, land, cooling, turbines, electricians, etc. Up until now, you had enough space that the bottle neck was just “Faster processing power”. Now the processing power is so fast that it is causing stress on the entire electrical system (data center over heating, not enough land, cooling is breaking down etc.).

Source

Once you understand this from a high level, you can then drill down to chain of events. 5-10 years ago the debate was around what AI chips would win and if you knew nothing it was simply “buy all of them” since you knew they would invest billions and billions into the industry. We’re way beyond “is AI real” at this point.

Keep it simple. Three steps:

1. Chips: All the chips that go into data centers. This has already played out and returns are likely more “stable” vs the past 5 years or so

2. Data Center Stress: You’re seeing this right now. Data centers are being built out rapidly. While it comes in big waves, every major company is not going to skip on their Data Center spending

3. Power: The electrical grid, energy production/use, storing all the energy and getting people to upgrade the cooling systems = where the next bottle neck is

You can make an argument that we’re already somewhere between point 2 and 3 but that’s largely splitting hairs. Big picture, think we can all agree that everyone knows AI is real and you need chips to do it. However. Most are not thinking about “how this stuff will be powered and sustained long-term”

This also explains our general investment philosophy of “buy the monopoly winners and also buy whatever they need to run their business”

Source

While we would put a near zero percent chance of this being some perfect linear increase as depicted by Goldman, the trend is agreeable. This is what matters for 99% of the population. If you invested in technology for the past 10-20 years (QQQ) there were years where it was down double digits. Doesn’t mean anything when the following year goes up 20-30% to make up for it.

To condense all of this, why bother figuring out which AI agent customer service chatbot is going to work when you can just invest in the people collecting checks from GOOGL/AMZN etc. Big tech is having another stellar year.

They will spend. Follow the money. Invest in what they buy.

Part 2: From Processing Power to Actual Power

Technology and time move at alarming rates. It seems like yesterday that the bottleneck was a lot simpler. You had all these servers and you needed to go in there and replace all the chips. Swap out the GPU/CPU/Cable etc. That was basically it.

Now we’re entering a new problem. That server is running too hot. That cooling tower is hitting max load. The electrical grid is going out sometimes. Simply swapping doesn’t work anymore, you need to bring in new physical servers + build on the land.

In short, the server won’t run if the electric is out! An air conditioning unit in Phoenix has no value if it won’t turn on.

Source

“This Sounds Obvious”

Not really. If you were to go back and look at your cost of living you’d see something like this. Inflation adjusted, the cost of electricity hasn’t changed in about 50 years (outside a few anomaly years).

The conclusion from that is “people are assuming utilities will be flat into perpetuity inflation adjusted”.

Everyone is upside down.

If robots drive down the cost of manufacturing, transportation, etc. This means they would be using a ton of energy/electricity. Therefore the cost of everything else goes down a bit, however, the cost of electricity goes up on a relative basis.

• Last 50 Years: electrical cost thought of as flat. Everything else goes up in price

• Next Few Decades? Electrical cost goes up. Prices of other items go down a bit since tech is deflationary by definition

Quick Example: Lets say you think inflation is 3% forever. Before that would mean electrical goes up 3% (same as past 50 years). The rest of your spending sees some items go up 6% other items go up 0% (such as TVs) and it nets out to 3%.

New world. Inflation is 3% however electrical goes up more than 3%. The rest of your spending goes up slightly less than 3% but your total spending is up 3%. Both net out to 3% but the new world has electrical going up faster to offset the declining cost of manufacturing goods.

Source

Similar to Internet Upgrades

Before the internet, we had 56K dial up. You had telephone lines posted on these large metal/wooden rods.

The infrastructure was not set up and we rolled out new infrastructure to get fast internet to every house. This is pretty similar.

The current electrical grid is set up to run refrigerators, heaters, air conditioning, TVs and some basic computers. It was not set up to run a million servers with millions of GPUs inside running full blast 24/7/365.

Why We Care: This is all important for two reasons: 1) people assume utilities are flat with inflation and what if that is wrong? Pretty brutal and 2) since we know all of this has a good chance of being true, your downside case is basically tracking hyperscale spending

You’re basically buying a hedge against your electrical bill with inflation adjusted upside.

Part 3: Boring Industry Becomes Interesting

Instead of doing the basic calculation and saying “ahh forget this i’ll just buy utility companies”, it is better to invest in the high tech companies that are building the next generation energy infrastructure.

Think about it. Who has the pricing power in this case? The entity that can deliver the best solution for powering a gazillion servers running a gazillion GPUs at once. We already know that the old stuff isn’t built for the new environment.

• Nuclear, renewables, storage, backup power (gas/power wall/other generator)

• Transformers, substations, cooling, switchgear, transmission, cables, optical connections

• Electrical contractors, engineering firms, industrial services

While everyone is worried about some new bot that was created, we just listed 14 different places where you could invest, get a decent paying job and see growth for the next decade or so.

We know this “isn’t good enough” because everyone needs to know what app is going to 100x tomorrow. Those same people will invest their time and money into a Hail Mary and get a zero.

Avoid the Blind Buy

There is a sweet spot. As you can see, blindly buying utility companies is a bit foolish. They unlikely have the pricing power and a single natural disaster could take out their main build out and revenue source.

Instead do some bigger picture research and find the items that go into next generational energy buildouts without the blow up risk. As an example, you’re better off buying the company that sells the cooling fluid to all the servers vs. the REIT that hosts all the servers. If the data center goes down the reit gets hit. If every data center goes down tomorrow? The cooling fluid provider still gets paid. They benefit from the build out but are not responsible for outside events.

For Fun, if you want to play the specific Geo Game here is a good starting point. We keep it simple (lazier) and would just look at companies with a large sales force presence in the highest data center growth regions.

Summary

We’re making an argument for a new bottle neck at the infrastructure level. Before the simple phrase was “name a world where you need less computing power”. This was probably the easiest way to deliver the message.

Now it’s similar. “name a world where you need less power”. It’s the exact same thing just at a different scale.

We’ll go over some of the ones that are interesting on Wednesday. Infrastructure companies, grid equipment, nuclear and more. Good time for an update!

On that note, Stay Toon’d!

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

• Old Books: Are available by clicking here for paid subs. Don’t support scammers selling our old stuff

• How ETH is Staked: Covered (here)

• Crypto: The DeFi Team built a full course on crypto that will get you up to speed (Click Here)

• Crypto Taxes: We have a suggested Tax Partner and 25% discount code, for information see this post.

• Security: Our official views on how to store Crypto correctly (Click Here)

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Also. Big congrats to the 5-10 new people who made their first profitable …

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Zooming Back to Making a Decision

As usual, we don’t think it makes a lot of sense to press…

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Part 1: Day One and Initial Traps

Assuming you’re going to start today, that means you’re likely just out of college. Something along those lines. If you’re in that camp you’re going to go straight into sales if you can. This is because it is the most transferable skill in the world. If you’re good at sales, you’ll need that specific skill to start a business. If you plan on dating attractive women? Yep sales once again. Everything is a form of sales at the base layer.

The exception is that you’re terrible at it. If you’re not built for it, then you’re going to be forced into online sales later (no face to the ads) while using your W-2 money in something different (typically Wall St or tech). All other industries should be avoided unless there is some strange exception to the rule that pays low 6-figures out of college that isn’t in the Sales, Wall Street or Tech bucket. Notice. We’re not even including doctors/lawyers since that goes directly against the goal of getting rich. 3-4 years of additional school is a ton of lost energy. Also. The people who want to go into things like medicine are not really motivated by money.

Congrats! You’ve Acquired One of These

Become Institutionalized or Smile and Nod

If you’re ahead of the curve, you’ll realize that the corporate world is largely an organized prison. Some people become institutionalized. Your life is playing the politics game, burning the candle at both ends and praying that you get a “merit increase” that barely beats inflation.

While it isn’t that terrible in the beginning, it becomes a prison cell by the time you’re in your 30s (by design). They typically give you large wage increases from 21-31 or so and then it tapers off as they realize you can’t get up and leave (mortgage, kids, car note, private school, etc.)

Start Making Something Online

Over the years we’ve gotten a bit softer on this. Before we used to say “make sure it is scalable”. Then we got a bit wiser. A lot of people have some sort of limiting belief/psychological issue with internet money. There are still people out there that think it is not possible. Similar to the people who think “Wall Street” is a bunch of guys yelling on a trading floor.

Anyway.

If you are about 6-9 months into your W-2 and have successfully become well liked (smile and nod, play office politics), this is the opportune time to start earning money online.

Anything goes in this case. If you need to start with some sort of time for money exchange with a niche skill? Completely fine. The rationale is that you’ll learn the basics for building an audience/reputation. In addition, you’ll get over the most annoying hurdle: realizing it is possible to earn money on the internet.

Common Trap: In general, most people just get too comfortable. You want to relax after getting the higher paying seat and get sucked into the standard nightlife/partying loop. Drinking more than you should, going out more than you should. While you can certainly have fun (Thursday and Saturday), going beyond 2x a week becomes detrimental to your future.

Instead of thinking of ways to make more money, most people end up trying to either: 1) cheap their way to the top by becoming frugal boring weirdos or 2) by taking all their money and dumping it into straight up gambling - sports betting, “prediction markets” on one minute crypto candles, all in on one stock over and over again.

You get the idea.

In this band the best investment you can make is in your own potential. The chances of being less skilled at 30 vs. 20 is basically zero. You’ll improve in every single life category. Since money follows value over the long-term, it’s a home run to reinvest into your own equity/future.

Objective: By the end of this phase you should be able to expand earnings with some small online venture. You’re getting pay raises since you’re young and politically savvy. The key is avoiding the doom loop of over partying and thinking the wage increases last forever. You have some time but not forever. It gets bleak quickly. If you need proof just look at the stress levels of the people in the office who are middle aged.

How This Plays Out Conceptually

People who figure this all out early are going to crush. While you can start your online venture later, the returns will likely be lower. This shouldn’t be surprising. If you learn golf today or started 5-years earlier the gap is going to be enormous. The talent is there, it is just behind schedule.

Generally speaking, this is the ideal time to “figure things out”. It’s a lot easier to get into WiFi money when you’re not making much. If you make $1,000 a month online, it is actually pretty significant if you’re generating $10,000 a month from the W-2. It’s a 10% increase in your earnings + a big confidence boost as well.

Part 2: Starting to Change the Timeline and Strategies

Surprise Surprise! Only 0.1% of people are going to start making money online in their early 20s. Within the jungle we do have an example, BowTiedVampDeer, who is running Pre-Sleep (source)

You know the guy is busy when he starts doing two things: 1) clowning on people his age who are still talking about missing College days and 2) his personal account is slowly becoming abandoned for the Pre-Sleep official account.

If you’re ultra sharp you’ll realize we pulled the post/tweet out for a reason. Chances are high he ran another store and figured out that there is another E-com angle to run (beyond Pre-Sleep).

The Math Ain’t Mathing - Realization

The general zone where most people realize corporate isn’t going to make them rich is age 25-34. There is a distinct tell. The group that is starting to crawl out? They are more withdrawn and are known as the “quirky” guy. This is because he has figured out the way to optimize his W-2 performance metrics while working less and less hours with less and less face time.

The second group? Usually in perpetual self pity. They say things like “I coulda/shoulda” or “good luck with that hobby thing of yours”. While you might be annoyed at their comments initially, realize that self pity and satire isn’t profitable. Lady luck despises people with “woe is me” personalities. She hands them worse luck over and over and over again. The more negative comments you get? Higher chances of them shifting more luck to you (yes seriously). Being disliked by NPCs is a right of passage for the successful.

Dial Into Group One

Since group two will never figure it out, it’s best to just give them the old “smile, nod and agree” treatment. Be optimistic and nice to them (no downside) and never give them a whiff of what you’re doing under any circumstances. They’ll know you made it when you hand in your resignation notice anyway. “OMG BRO YOU QUIT” which you’ll leave on read.

Most Likely Case: It has been 5-8 years of corporate slog. You’re looking at your accounts and realize you have something around $300,000-$400,000. This is from your boring 401K match + some stocks + some crypto + some other investments you’ve made. The problem? You are growing out of the constant partying phase and realize that if you want to buy a place in a nice area you’ll be zero’ing out your entire liquid net worth to come up with the down payment.

The below is likely fiction but is a good example of what happens. You save up feel rich on paper then realize if you want the good school district you’ll be back to being house rich and cash poor.

Hit the Gas Pedal Hard

At this point you have to do the calculation for yourself. What do you actually want out of life. You’re not middle age but you’re not a kid who just graduated college either. Decision time.

• Path 1: Just stay in corporate, work 30 more years where you’ll likely get cut/fired/laid off at least a few times. Settle for a life of constant grind and minimal changes to quality of life.

• Path 2: Realize this isn’t going to work and immediately start putting money away for your small business venture. We have too many to count listed on the paid side and how to find good ideas. That said, you still need to come up with $5,000 to $10,000 to test your product/idea. If you already have $300,000 to $500,000 you’re either too cheap or too risk averse to consider $5-10K to be meaningful

• Path 3: Go completely off the walls with a career change and the cope of doing something “you love” because the quality of life won’t be that different. You’d be surprised at how many people have this mental breakdown. Trust us when we say that the 10-15 year outlook is never pretty. South East Asia will give you a good glimpse into what that looks like!

Click on Path 2

The beautiful part about Path 2 is that you will know a few people who already made it. That’s right. If you are actually grinding and moderately successful, your contact list will have at least one or two of them. Mentally you know it’s doable and you just need to catch up on the learning curve.

Cut Into Lifestyle: The usual structure that functions well? Vast majority in this camp traveled too much, partied too much and got sucked into lifestyle inflation a bit early. Just how it goes.

• Carve out a reduced socialization schedule, if you’re really far behind you only go out one day a week until the online income can cover some expenses

• Take your contact list and make the energy focus on building/money. This sounds simple but it is powerful. If you spend more time thinking about it and being surrounded by people who talk about it, the results come faster. No different than how you learned your own job via osmosis by being in the industry for years

  • Take it a step further all your social media, general media, reading, etc. Should be focused on people who are money focused. What grabs your attention is what the world will slowly give back to you (staring at Lambos would be the exact opposite as that’s envy vs. action)

• At this point you’ve created a lot of free time and acknowledge that priorities were messed up. The time was always there, you just weren’t taking it seriously

Don’t Bother With Chasing Billions: The billionaires you see today didn’t go out there with a goal of becoming a billionaire. Instead, they started their company and focused on growing that. One thing leads to another it expands and expands and expands again. Next thing you know they have 9 different businesses but the name of the Company is still singular.

Chase Demand and Your Talents: You don’t have the luxury of renting out your time for $40/hour anymore. At this point you’re going straight into something scalable. This can be E-com (our recommendation), affiliate marketing, software, etc. Anything that can get sales while you are asleep.

If you are only earning money when the clock is running that is a job. If you are only earning money due to performance that is a career. If you are earning money while fully asleep, that is a business.

Before getting overly married to this concept, we do realize that many businesses run hybrid models. You might do some time for money exchange that leads to your main business of selling a SaaS. Who knows. The big picture is the same. Over 2, 4, 6, 8 and 10 years, you want your income derived from the sales unrelated to your presence.

The line in the sand? You need to have a clear product that does not require you to be on the clock. Otherwise you have fake entrepreneurship where you’ve just created another job for yourself. If you can’t sell it, you are simply trading time for money.

Click Fast Forward

There is a reason why we say around late 30s/early 40s a cliff appears. By this general age band, you know who is going to take the leap and who isn’t. The results start pouring in and you basically know who is going to be in corporate forever and who isn’t. There are always exceptions but this is a good guideline. We’re aware of all the cope people throw out.

“Tons of business success starts at 40”.

Not really. The success stories at 40 were planted about 5 years ago. While their first successful business was started past 40, we’d bet practically everything we have they were already tinkering before that (running some sort of Ebay business, affiliate marketing, trying to flip a house, etc). Chances are slim that someone is making $400,000 in a corporate gig, quits and spins up some random website that knocks it out the park. That person has a history of tinkering in the dark before that happened.

Part 3: Another Decision Tree - Changing Gears

If you’ve made it this far you’re not a 50 year old making $350,000 with 2 mortgages and two kids. It’s unlikely. The more likely case is that you’ve got something going and need to start making serious life decisions.

For that you come to a black cartoon bull.

Jokes aside, you end up in a weird vortex. You’re making good money, you have real assets (already worth a few million) and have to start making life tradeoffs. Do you want to give up another 5 years to grind and build? Knowing that your quality of life will not be the same at 50 vs 45?

Do you want to give up 3 years? How about your personal life (kids, family, friends) so on and so forth.

We’re not here to tell you what to do, just to think long and hard about how to actually move the needle.

First congrats: You’re one of the main characters. You’ve reached the fabled paid off home and ~$4,000,000 liquid. You’re only missing out on private jets, super cars and yachts. Everything else is within reach.

Decision time.

Option 1: call it good enough, run business at baseline and hang out with family/friends

Option 2: shoot for ~$8-10M. Wealth studies have shown this is the next step up in utility/happiness

Source

Option 3: Try to go for video game money which is around $25M or the classic $1M per year of spending

Option 4: go full on money worshiper and shoot to become a billionaire

Option 1: Self explanatory. You don’t sell anything, run it as best as you can with a focus on freeing up your time. No reason to sell because if you do you’ll end up with immense depression. Look up the history of Victoria Secret

Option 2: Trying to get the cool double? The classic “anyone doing 2x me is rich” loop? Fair enough. Your likely risk adjusted solution is two fold: 1) taxes and 2) bolt on acquisitions. You can solve for a more optimal tax structure which gets you a better payout or higher net income. The second option is also doable assuming you are willing to work long hours again. Due diligence tons of terribly run companies on Empire Flippers, add them into the pile you have and run them like a PE firm.

Example Small Business Tax Rule

Source

You have another option. You can also try to invest significant excess money into venture/early growth items. Crypto people and tech people lump into this camp. You better be a good investor though.

Option 3: Need the video game money? That $1M a year for life sounds perfect? Welcome to lady luck. In this group you need luck. Unless you were born into a family with wealth (millionaires already), you will need luck on your side + a clean strategy. Here we go from “simple taxes” like moving states and getting deductions to real tax strategies: Tax Havens.

You’ll need a combination of building out your company + selling it + investing in high growth assets at the same time. You will likely need at least two (maybe all three) to pan out to hit the elusive $25M. Why? You will be on tilt for several years. Being on tilt typically means the will power to spend like a monk declines and your decision making gets a bit blurry as those digits go up and to the right.

Option 4: Option 3 actually has a wide range of $25M to $200M. We’re just making that range up but the idea is the same.

Option 4 is much darker. If you read the actual bios of Option 4 types, they give up a significant part of life for more money. Felix Dennis admits to chasing money at expense of never having a child (says it was a mistake would have stopped at $30M or so). There are countless billionaires who talk about missing their kids birthdays, baseball games etc. Countless billionaires with all kinds of messed up health issues and perverse mental health issues.

We’re sure there are a handful of well adjusted ones, the stats suggest the outcome is severe though.

Part 4: Conclusion and Maths Test

You now have the blueprint on what it takes to make it to each general level. At a high level you can see luck increases at higher wealth levels and statistically you’re reliant first on business income/success then investment success. Ideally you’re both and you’ll be at the Video Game money level of $25M or $1M for life in spending power.

For those that are still fighting this, we suggest putting everything into excel. Take all your career expectations without a W-2. Assume you’ll be that rare exception making $1M by 35 in (insert insanely competitive industry).

Now put that through the following problems: 1) 50% tax rate since likely in NYC/California and 2) layer in inflation.

If you use home prices as the proxy for inflation, they have gone up about 2x over the past 20 years (median not even luxury/high-end/low supply spots).

This means that $1M in 20 years isn’t buying $1M of items in today’s dollars. It is buying $500K! Making $1M in 2046 would be equivalent to making $500K today in purchasing power terms. Wild to think about conceptually.

Go back to the math ain’t mathing section.

Who do you think ends up being set for life by middle age? 1) “choice is obvious get to building” or 2) “self pity”.

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

• Old Books: Are available by clicking here for paid subs. Don’t support scammers selling our old stuff

• How ETH is Staked: Covered (here)

• Crypto: The DeFi Team built a full course on crypto that will get you up to speed (Click Here)

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Spoiler alert: genetics = king in our opinion. Which means a lot of life is luck. No one knows what the most valuable skill is going to be 20-30 years from today and that’s why it is so important to find our your talents and the talents of your children. Once you know that you just plug it into the highest earning/returning outcome

On that note we’ll start with RE, move to crypto and other updates.

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We’ll make an argument for a long-term squeeze vs. a sudden deflation/blow up.

Structural Squeeze?

In short, prices go up, people lower their standard of living but remain employed.

If this sounds crazy, Europe would represent a good example. Out there it is much more common for young people to live at home and the wages are worse than the USA (relative to cost of living). Housing is a great example of this.

Source

From the above you can see that it is possible for prices to go up even more (housing). This is because 10x median family income is much more severe than the USA (sitting at around 5-6x). Said differently, US median affordability is equivalent to the cheapest set up in Europe!

Outside of the money printing in 2021, 1-2% growth isn’t doing much for anyone

How This All Happens

If you were around for the 2008 financial crisis, you remember how bad it got in Europe. The bond market was blowing up and they even came up with a nickname for the next country to potentially go full Zimbabwe. They called it the “PIGS” which was an acronym for Portugal, Italy, Greece and Spain.

Since GDP stalls out and the government continues to print money, it leads to consistent asset inflation and wages that don’t keep pace. This is also known as stagflation (assuming unemployment creeps up due to AI or other macro factors like Oil prices).

Source

The IMF is already suggesting that pressure is mounting.

• Debt issues are not solved, war won’t pay for itself

• Add in oil price shock and prices go up

• Middle class/upper middle class see a savings rate decline ← extremely important

• Asset owners win as people are barely surviving and saving less. They still need to spend to survive and those profits go to the same people

For those that are new here, wealth is always relative. If everyone in the USA is gifted $1,000,000 it means that the median American would have ~$1,200,000. This would also mean that the quality of life for the median American is unchanged.

Source

Put That All Together: If the typical upper middle class person was saving say $20,000 a year which was 10% of their income. If prices go up across the board and they are saving $10,000, it means their savings rate is now 5% which represents a 50% reduction. If that same person had a net worth of $200,000, it means their net worth only increased by 5% instead of 10% (saving $10K instead of $20K).

On paper they have “more savings” but with inflation at 3-4% they have realistically stagnated (pun intended). Working a full year only to be in the same spot on a relative basis.

What Happens Next

At this point debt becomes the decision maker. Rates are too high to push off payments (where they don’t hurt spending) and the interest impacts purchasing decisions.

Where it Shows Up: At a company level, you’d see this at the profit margin line for any non-essential company. Coca-cola and Costco are not going to see much of a change. People need to eat and drink.

However, if you see profit margins slimming out for automotive, apparel and non-essential services slimming out? It means that we’re officially in a period of prolonged stagflation.

As of April, this isn’t really showing up. Oil prices have only shot up recently and much like any commodity price increase, it’ll show up after a full quarter or more of pricing pain (majority of major companies have hedges in place)

From the chart above, you can see how quickly a big price rise can impact the broader economy (especially the levered companies/individuals)

How to Prepare

If you think this is a viable “slow grind” headwind, then you’d want to focus a lot more on creating a variable expense structure + unlevered portfolio. The way to do that is to keep a much higher percentage of your spending tied to things you can control. Not the time for a large mortgage, car note or fixed expense line.

While that one is easy to see, the opportunities will also be missed by 99% of people.

Opportunities Pop Up: You’ve seen all the headlines. People aren’t drinking as much. Looksmaxxing is a new mega trend. Big dispersion in have and have nots. The signal amongst the noise? Will show up in the middle to second half of this year. You are already seeing the search results trend and it’s up to you to capitalize. Examples in this post:

As usual, none of this is a guarantee. Although we do think a period of stagflation is more likely than a period where prices suddenly drop 50%. We had that chance (of a deleveraging) during COVID and learned that the government prefers to just print money.

Investor Psychology + Repeated Thinking

One of the interesting things we noticed over the past few years is the concept of “history repeating”. After we got out of the lock-down (COVID) people were fear mongering for another pandemic in 2023 and 2024. This makes no sense statistically as a pandemic typically occurs once every 100 years or so. Repeating it again within 24 months makes no logical sense but it was a common belief.

This is similar to real estate prices crashing after a major natural disaster (earthquake, huge storm etc.). The chances are massively lowered once the event has passed since it is a one in 20, 30, 40 years event.

What People Think Now

Right now the vast majority are in two camps: 1) some sort of massive deleveraging issue where real estate goes down 50% again like in 2008 - unlikely due to locked in low interest debt + completely different guard rails against bad loans and 2) some extreme money printing environment where everything goes up in some massive Zimbabwe/Argentina up only 50% move. In this case you want to own risky junk like the scooter company craze in 2021.

Masses Are Typically Wrong

While there is always a chance they are right, the vast majority of the time they are incorrect. You can see this as they underperform basic index funds and consistently get emotional (in the wrong way).

If you read between the lines? Then it would create a scenario where both parties are wrong. The group that says we’re going back to the stone ages with a -50%? Not happening. The people who think alt season is coming (despite no ETH ATH in sight) are also wrong.

Leaves you with a in-between solution. Prices go up slightly but not enough money gets sent into the middle class to spend money. It gets consolidated into the winners. Good assets that are needed go up in value. Middle gets squeezed. Deleveraging only seen in low quality over levered industries.

In that scenario the masses get cooked, asset owners win, people who take advantage of the spending shift make millions and you’ve got a deeper K-shape spread in 1-2 years.

Good comparison chart to decide what environment you think we’re in.

Source

Summary

A slow squeeze is looking more likely if people can hold onto their low interest rate debt (people locked into <4% mortgage notes). It also becomes more likely if inflation remains in the 3-4% range.

Fortunately, you live in the best time in history to be alive. All you’re going to do is follow all the social search trends and figure out what products people are shifting to. If they are trading product A for product B, you’ll know at least 3-6 months in advance.

Meanwhile? 99% of society won’t even try to spin up an LLC. Not once.

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Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

• Old Books: Are available by clicking here for paid subs. Don’t support scammers selling our old stuff

• How ETH is Staked: Covered (here)

• Crypto: The DeFi Team built a full course on crypto that will get you up to speed (Click Here)

• Crypto Taxes: We have a suggested Tax Partner and 25% discount code, for information see this post.

• Security: Our official views on how to store Crypto correctly (Click Here)

• Social Media: Check out our Instagram in case we get banned for lifestyle type stuff. Twitter will be for money

Before people panic, this isn’t the end of DeFi. Far from it. The negative event will be forgotten about and too many heavy hands will keep things running. Just another ugly day in crypto.

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If two high-income W-2 earners can’t get the white picket fence house? It means the old model to get rich is broken. Not just broken. Structurally changed.

Part 1: What Your Parents Said to Do

If you’re in generation X or younger, you already know the drill. Get a good paying job, save money, get max house you can afford and slowly climb up the corporate ladder. The standard advice was doctor, lawyer, banker and later on engineer/top FAANG company.

Post COVID a major changed occurred. Still people don’t seem to get it. They quite literally printed $10 trillion dollars. This means that ownership/equity/assets went up in astronomical fashion. The new normal is set and the Fed has explicitly stated they want to see 2% inflation not deflation (where we go back to 2020 pricing).

Before people get upset. Yes. The 2 standard deviations above average still exists. Some small portion of society will be the unicorn employees. They climb the ranks to millions. This is called statistics. The vast majority of the people who make it will be business owners/asset holders.

Part 2: $300,000 a Year is the New $100,000 a Year

Back in the 1990s it was impressive to “make six figures”. You’re free to calculate the exact value based on “CPI” however, we can hopefully agree that the vast majority have a primary financial dream of being a homeowner. This is why we can make a clean argument that $300,000 today is the new $100,000 from the 1990s.

Back in 1995 a home was $132K. If you triple that, you get around $400,000 (just below). That lands you practically on top of the median priced home $405,000.

Think about it. If you understand that the money printing will never stop, you should not measure your net worth based on dollars in a checking account. Your net worth should be measured based on what you can purchase. If you were worth $1.3M in 1995, you could buy 10 houses. In 2026 you could buy 3 and have 5-figures in a checking account. That’s it. A ~70% difference.

The craziest part? Housing went up the least relative to the other things you need to survive. Can’t eat your television unfortunately.

Source

Part 3: Supply Side Broken Down

With the inflation topic out of the way, not only did they hand out actual dollars (stimulus), they also allowed people to get 3% mortgages.

The main problem with the 3% mortgages isn’t the rate. It is the fact that it isn’t portable and real estate people always obsess over buying “the max you can afford”.

So the spiral started. If you have a mortgage note in the 3% range and the next one would come in at 6.5%, that would be a ~40% increase in monthly payments for the exact same loan amount. Add on a second problem. Prices went up around 20-40% depending on where you are located. Realistically, you would need to increase your mortgage payment by at least 70% to move into a better home.

Simplistically 53% of the market unlikely moves

The government can change the laws (make mortgages portable, incentive shift to primary residence only etc.). Problem? Banking on someone else isn’t a great strategy!

Part 4: Prices Won’t Crash 50%

This gets a lot of headlines. Not because it is true but because people want it to be true. Even if we saw a large drop in home prices, there are too many wealthy people who would swoop in and buy it all up. A simple search of cash positions by major players like Berkshire would make this clear as day. If you’ve got hundreds of billions sitting in cash and the chance to buy homes at -25% (let alone -50%) comes along… the buyers are going to be the billionaires not the middle class person. Why? The middle class person would likely be laid off if the entire housing market declined by 50% in the first place. Also. People will take cash offers over debt due to faster closing and no loan origination risk.

Source

Part 4: New Age Feudalism

Summary so far: 1) People who own assets are much further ahead, 2) first time buyers are less likely, 3) upper middle and above is dominated by business owners and 4) socio-economic mobility declines and becomes more dramatic [you make it or don’t’].

This general trend is starting to mirror nepotism, gated communities and an emphasis on ending where you started. If born into the right family. You’re set. If not? Going to take a metric ton of effort/luck/skill to make it.

Source

Part 5: The Next 3–5 Years

We picked out the prior image on purpose. There is a huge gap today. What prevents you from becoming a corporation? That’s right. You, Inc.

Absolutely nothing. In fact, that would land you somewhere in the Nobles part of the pyramid. Honestly good enough. From what we’ve seen the pico top ends up having more problems than benefits. Hard core depraved people with massive mental health issues.

First On Housing for You Inc: Since we used that as the starting point, guess what? There are solutions. In fact there are three of them. 1) you build your own house which we’re doing a walk through of in real time with real numbers - source, 2) you can go through and flip your first house to reduce risk + help the asset accumulation games - source and 3) you can go full WiFi money - our recommended path with numerous public success stories (example) and simply jump to the front of the line buying luxury.

Second - Only Asset/Equity/Ownership: Stop thinking about net worth in dollars. We’re guilty of this as well. We’ve stated that as of 2026 you really want around $3-4M and a paid off home to feel set for life. This is achievable. The main problem with using this? In 30 years $3-4M is not going to cut it. From 1995 to 2025 the cost of a home did a 3x. This means ins 2056 (assuming the same inflation we’ve seen), you’re looking at $1.2M for a median home (wild!)

You should create a spread sheet. You will track units instead. How many shares of stocks, crypto, homes, business ventures and any other asset that goes up with inflation (generally). This way when you update it once a year, you can see if your income is actually keeping pace with inflation/assets or not. If you were buying 100 shares of VOO last year and buy 90 this year… That means you’re losing to assets. Makes the game a lot harder and forces you to think long-term (planning 3-5 years ahead).

Third - Run Your Own Race: If you understand the game of building assets you know that it is extremely lumpy. One year you might make more than you made the last 15 years. The next couple years may be a struggle where you make less than you did 2-3 years ago. Name of the game.

The only reason that people are fine with this? They stuck out the 3 years. It takes about 3 years of truly going 100% all out. After this the majority have their first big win and are addicted to building. They are fine with having a down year because they’ve already seen the story before. No need to worry. Just the standard lull followed by an eventual spike. IF they never take their foot off the gas.

This is a big IF. From what we’ve seen 90% of people don’t even try. Of the ones that do, another 90% give up or lose focus. Once momentum is lost, you gave up an entire year or more. Any time you give up, start a new idea or stop giving it your all? Think of it as a big reset button. Like in a video game you’re sent right back to the start.

In a funny way, the gambling addicts would likely be well equipped to start businesses if they channeled that energy into the right venture. Going out on your own is an outrageous roller coaster of emotions. No different than the ups and downs if you put $20 on a random game or horse for the entertainment. Only difference is the outcome is in your favor (if you actually try - see point 3 most don’t)

Source

Part 6: Everyone Else Getting Left Behind

One of the issues? You better choose your friend group wisely. If you find yourself hearing the same old stuff that worked 30-years ago and is no longer applicable? It’s time to change your contacts. If you meet 100 people running the old playbook from top universities? Maybe three of them make it out (statistical norm)

Most don’t adapt. For some reason humans are wired to follow the herd despite the typical person having no success in life. Unless you want to be in the same camp, best to find a different location.

The New American Dream: The new one? Its basically anything you like. Unlike the past, if you succeed with the new blue print it creates an entirely different world you never knew existed. Going to the beach at 11am on a weekday. Having no alarm clock. Choosing when you grind out the hours. Complete freedom to hang out with your family, kids, friends etc.

White picket fence + 2.5 kids + dog? Still achievable.

The map changed. The treasure at the end got bigger. Less people pick up the map in the first place!

Not as bad as the doomers make it out to be!

On that note we’re going to consistently follow new trends and look for ways to gain assets in bull, bear and neutral markets. Everyone else? Well they can look forward to their 3% merit increase when inflation registers at 3.3%. “They got it all figured out”

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

• Old Books: Are available by clicking here for paid subs. Don’t support scammers selling our old stuff

• How ETH is Staked: Covered (here)

• Crypto: The DeFi Team built a full course on crypto that will get you up to speed (Click Here)

• Crypto Taxes: We have a suggested Tax Partner and 25% discount code, for information see this post.

• Security: Our official views on how to store Crypto correctly (Click Here)

• Social Media: Check out our Instagram in case we get banned for lifestyle type stuff. Twitter will be for money