Welcome Avatar! Looks like the trolls are out again saying that $10,000,000 is not enough to retire. It is most certainly enough to retire. We’re guessing this is just a way to make people give up and not try at all. Realistically you need less than that. In fact, the number you need to feel rich will force you into the $10M+ bracket due to sheer boredom (yep, if you get to financial freedom you still work. All those FIRE guys end up working).
The tricky part is how non-linear everything is. Most want some sort of guaranteed path that goes up in a perfect straight line where X = Y on some smooth slope. Doesn’t work like that.
You cross thresholds. Some step ups change your life forever. Others? Just buy nicer seats when you fly.
Here we’re going to outline the financial thresholds (in rough 2025 dollars). Luckily we journal regularly (3 sentences a day for life) and can see the psychological changes looking back.
In Short: $1.5-2.0M gets you comfort; $5-6M gets you freedom.
The standard “$3-4M and a paid off house” implies roughly this range ($5-6M net worth).
In the first range you know you’re going to make it. This is why you feel comfortable. In the second range? You stop asking if you should buy something and start asking “how do i want to spend my time”. At this point your time becomes infinitely more valuable than money, which means you never give it away for free (unsurprisingly you don’t see deca millionaires waiting in line for the next gadget or free ice cream)
Moving Up The Socio Economic Ladder is Non-Linear
You don’t wake up one day with “I’m rich now” plastered on the screen. It’s a non-linear process. A staircase with about five landing spots. The quality of life is drastically different. We can argue all day about the exact dollar cut off but this is more than good enough.
Instead of theory this is from a homeless person.
Tier 1 — SURVIVAL: $0 → $150,000
This is the majority. It’s brutal.
You’re reacting. Can’t plan ahead. Can only tackle things right in front of you. We call that feeling/sensation survival.
Your brain is hostage to money problems. Every small expense feels dramatic
You plan around problems (rent, car, medical, car repair etc.) instead of long-term decision making
Everything feels risky since you’re on edge about making a single mistake. Losing a job means you can’t pay rent
Your lifestyle is generally on edge, delaying medical items to save money, choosing jobs for pay vs. talent/fit, working extra hours in positions where you are clearly overqualified.
In this situation you’re trying to stabilize the boat.
Build a Cash Buffer ASAP around 3–6 months of living expenses
Avoid all debt especially on depreciating assets like cars
Drastically cut all expenses, if you’re in survival mode this is the only time where frugal penny pinching matters
Explains Ramsey and Others: The mainstream financial advice largely fits here. This is how you know that it doesn’t work for anyone with talent. If someone has gone mainstream like Dave Ramsey it means their message resonates with the majority the majority are scraping by.
Essentially, there is nothing of value here since the entire goal is to spend as little as possible.
Tier 2 — STABILITY: $150K → $1.5M
This is where the youngest audience sits. They are in this wide range of stability. While it seems like your life would change dramatically from $150K to $1M, it doesn’t change nearly as much as you think. You likely live in a high cost area. This is a muddy zone since $1M is perfectly fine in a small town + wifi money income. The assumption here is you are living in larger areas in the USA (SF, LA, MIA, NYC, BOS etc.). In these areas, a million doesn’t even buy a house.
Also. The people at the higher end of this wide range? Probably have family/life events as well. Life doesn’t get cheaper until you hit retirement age (around mid 50s).
Onto the Good News. Here are the Benefits:
You don’t need to check prices when you’re buying dinner
Vacations are no longer a splurge, its a standard part of the year
You can visibly see that you’re no longer in survival mode since your brain changes from “how do i survive” to “how do i get to the next socioeconomic rung”
The problem here? This zone feels safe. It isn’t. They overly rely on their W-2. They follow the same strategies from the survival zone. As they say *the plan that got you here won’t get you there*
Playbook Gets Adjusted:
You Double the Emergency Money: Since you will be taking more risk, you likely hold about 12 months of living expenses in savings/bonds/t-bills that are easily liquidated.
Building for the Long-term: You no longer care much about that 5% raise. You know that you can create it yourself with a basic business. More importantly, you need the diversification. Better to make $200K in a W-2 + $100K from Wifi money vs. $350K from W-2. Why? Well if you lose your job your income goes to zero
Cost Focus Dies: You stop worrying about pinching pennies since a $5 coffee won’t move a $1M net worth. However, you do keep an eye on big expenses and the desire for lifestyle inflation. Only big items get questioned (car, vacation, house, etc). These are real costs. The idea of getting mexican food or sushi isn’t going to matter
Quick math: If you can live on $75k/yr, a $1.5M nest with a safe 4% withdrawal yields $60k/yr. You don’t feel rich, you don’t feel poor, you feel this intense burning desire to make it to the Comfort Zone (4% of 2,000,000 = $80,000 *above* this baseline $75K spend)
Stability is a mirage if your expenses increase with every raise. Heat rises!
Notice. We’re purposely skipping $1.5-2.0M since this is basically a dead zone. If you live in a cheap area the dead zone is likely $1.0M to $1.5M. If you live in one of the richest areas in the world, the dead zone could be north of $2M.
Tier 3 — COMFORT: $2M → $6M
This is the first real taste of freedom. The stress-drop is dramatic.
You will notice you are no longer worried about the following:
Emergencies are annoying but not life altering/future changing. They suck but they are not deal breakers
Housing isn’t really relevant. You can buy a house without a mortgage (assumes you’re in the middle of this range). Even then, you could always pack up buy a cheaper place in a small town and live off the $1.6M
You’re no longer worried about getting richer over the long-term. You’re slowly shifting to “stabilizing the growth” instead of “desperately escaping this rung”
You can buy practically anything you want. Instead of asking if it fits the budget the real question is if it is worth the value or not. After years of intelligent spending you’re not going to wake up one day and burn through money for no reason. Another massive positive? Your performance actually goes up. All that money stress is gone. When you’re working, you’re in a state of flow. Previously, you would be caught in analysis paralysis since every major project could be a make or break situation
Protecting and Building. More of a Combo.
You Begin to Diversify a Bit: As we’ve said many times. Wealth is built from concentration not diversification. Once you have around $5M, you don’t need to concentrate much anymore. Why? You already know how to build a basic business. Therefore that’s going to be your main form of concentration. The mantra here is “don’t trade what you need for what you want”
Trusts, Inheritance, Tax Planning: All of this is learned pretty quickly. We don’t talk much about it since it’s extremely easy to learn. The lifetime gift number is already in the 8-figures so it takes minimal intelligence to do it the right way. If you get beyond the gift numbers, you’re not asking us. You already have a team of planners for the GST and international trusts anyway
Lifestyle Design: You’re moving towards “what do i want my life to look like”. At this point you have enough to think this way. As long as you do some work to pay the bills, that $5M is going to $10M in less than 7 years anyway. Want to live on the beach? The mountains? In Alaska? Really up to you
Math Time Again: At $5M, a 4% rule gives $200,000/year of sustainable withdrawals. This is *over* $15,000 a month. Without a mortgage or a McMansion, tough to see anyone burning this type of money for standard living expenses.
$2M life is comfortable. $6M you own your time.
Tier 4 — FREEDOM: $6M → $20M
You stop running life through a spreadsheet. Money is a given since you’re working on things you enjoy and are good at it (by this point we’re sure you’re talented at it!).
This is where our public mantra comes in “$3-4M and a paid off home”.
That would get you somewhere around $6M. Again. You can move this around a bit (low cost cities is lower, if you’re trying to live in NYC it is higher). We use this as the range since you can *always* move to a cheaper area if you have this much wealth. You’re free. Just because you won’t be living on beach front property in Santa Barbara California does not change this fact. You are free.
How Your Views Change
Work is optional: You only do things you enjoy and only meet people if you have a deep interest in their life. You don’t need to go to networking events since you already have a good rolodex and guard your time like Fort Knox
Extreme Mobility and Access: At this point you can pretty much go wherever you like and have access to the highest quality items of importance (food, healthcare etc.). All decided by you without any stress
You have a system for Investing: You already have a world view. This creates a system of cash flows. You invest in what you know and focus more on how to spend your time. For us, we love tech, investing, e-com and athletics. We could do this forever and it would never get boring. New tech is always exciting and staying healthy is fun since you’re competing against yourself (the days of blacking out and lifting the next day are gone though - tears)
Risks are related to emotional catastrophes. Complacency - do nothing for a year and you’re turning your brain into the next blockbuster, bad personal life and you’re spending on drugs/alcohol to offset it and ego based gambles (taking a mortgage/leverage for a “sure thing” investment). Also. Another common one is trying to use money to skip the steps of building a new income stream. ALWAYS assume you just started. This prevents you from trying to use money as a crutch (hint: it doesn’t even work)
Retain the Castle
Percentage Risks: You limit your downside to a percentage. You don’t take 50% of your net worth and dump it into anything. Doesn’t make sense. You limit it to around 1 year of income at most. If it fails, you lose a year, not the house
Guard personal life & health: This is the new currency. Who gets access to you and how does it impact your health. You can’t get your time or health back easily. Not even money can solve those problems
Constantly Research Tech: If you’re not using new tech, you are behind. Period. Simple as that. Even if you’re feeling lazy, think about the future generation. Don’t want to doll out advice that doesn’t even work now (sorry Wall St. not a prestigious industry anymore - everyone smart left for greener pastures)
$10M is Enough to Retire: 4% of $10M = $400,000/year. That level buys full optionality. Anyone saying otherwise is a troll. You don’t even want the super car. Just attracts the wrong type of people
You are in full control of your time. The only part you’re missing is full abundance (pico top of society)
Purposely skipped $20-25M due to math of 4% rule.
Tier 5 — ABUNDANCE: $25M+
Now you’re at the peak of the triangle. Most common items?
Builders: keep scaling, starting companies, making new worlds
Investors: become focused on start ups, venture capital etc.
Passion People: slow down dramatically to do a hobby they love (as mentioned many times, this is typically only valid after age 50 or so, otherwise you get bored and go back to part 1 - building)
Disaster Only: At this point even a 50% kick one year in a 2008 type disaster doesn’t matter. You would still make $500,000+ in dividends, rental checks etc. While the portfolio value is down, you just survive. Not hard to survive on $40,000+ a month
Real risk is primarily health.
Decide On Your Interests: Legacy, impact, etc. What do you actually want to change in the world. At this point you’ve earned the right to an opinion on how the world should work. You’ve created an incredible one for yourself after all
Lost of Legal Stuff: Generational trusts, vesting cliffs etc.
Teach the next generation: Okay this is basically our own thing but you can just do this with your own family/friends
Past $25M and you’re earning $1M+ without doing anything. Can live anywhere and not have a care in the world.
When are *you* Going to be set for Life?
Our Guess: somewhere between Tier 3 and Tier 4.
~$2M: comfortable (good life, but fragile to catastrophic events if mismanaged).
~$6M: freedom (you can stop working and live a high-quality life indefinitely). With some parameters
Before getting worked up and saying “But I gotta get to $25M+”. Remember the golden rule. Lady Luck doesn’t like beggars.
Landy luck prefers the people who get into $6M+ and say “ah whatever i’ll try this random idea because why not”. She does not like the smell of desperation and greed.
Flow state only!
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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