Bottom line up front: I really want to like this book, but I can’t recommend it. 2 out of 5.
So why? For some context, the author of “The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life” Nick Maggiulli, wrote one of my favorite books on investing, “Just Keep Buying,” back in 2022. That book did a great job not only of laying out basic guidelines for a lot of “how to save and invest” principles but also did a good job of dispelling a lot of myths that lead to self-destructive behavior, such as market timing, failing to increase savings more than proportionally as income increases, and problems with hot stocks and investing fads. It was a particularly good balance of readably simple for a layperson’s audience, with just enough data and simplified math to intrigue a reader looking for a bit more substance to the book.
The Wealth Ladder tries to blend that approach with a more pop-storytelling approach that authors like Malcolm Gladwell and Morgan Housel have taken. The result? A confusing mishmash of information that would really have benefited from a stronger outline and more cohesive thesis to begin with.
The Issues in Part 1
The basic narrative arc of The Wealth Ladder is that there are six logarithmically defined stages of wealth measured by Net Worth:
- Level 1: Those with <$10,000
- Level 2: Those with $10,000 – $100,000
- Level 3: Those with $100,000 – $1 Million
- Level 4: Those with $1 Million – $10 Million
- Level 5: Those with $10 Million – $100 Million
- Level 6: $100 Million+
The entire book revolves around this basic framework, with Part 2 being built around seven chapters, one for each level plus a chapter on level mobility, and every chapter thoroughly returning to the level framework.
The 1st chapter posits a “0.01%” rule, highlighting that expenses equating to 0.01% of your wealth are essentially spendable without thought or consideration. So, for someone at the bottom of Level 2, an expense of $1 can be spent without much thought, and if you reach the top of the level, an expense of $10 can be spent without much thought. This is framed by the example of “not worrying about what groceries cost,” and if that prompts you to think about the inflation in grocery costs recently, worry not, it’s later explained that the levels described above should be adjusted for inflation and are not fixed dollar values.
This rule perhaps makes more practical sense at higher tiers, where for someone in level 4, a description of this degree of wealth is “travel freedom,” or the ability to travel at a given quality without much thought for the cost (i.e., flying first class, staying at an expensive resort, etc.) The chapter doesn’t lend much thought to the practical realities of “cost of living” in this chapter, but hints that this may be a bigger issue later on.
The 2nd chapter posits a “1% rule,” or that any opportunity that can increase your net worth by 1% or more is worth pursuing. So, if your net worth is $10,000, anything that could increase your wealth by $100 is worth doing. But if your net worth is $1 million, then it’s probably not worth pursuing something that could increase your wealth by less than $10,000. While I follow the rule of thumb point being made here, much like the 0.01% makes more sense at greater levels of wealth, the 1% rule is somewhat undermined by its obvious exceptions. The chapter also borrows half of its content from Naval Ravikant*, lending detail to Naval’s framework of leverage (labor, capital, content, and code) as means to expand wealth; in other words, pay people to do work for you, invest capital to get a return on it, generate content that can be distributed (at a profit if possible) and increase the value of your personal brand, or literally code something like a videogame or piece of software that can be sold at infinite scale.
*It’s a point of amusement to me that Naval Ravikant is given so much time in chapter 2 because Ravikant is the progenitor of the “successful financial guy turns pseudo philosopher” trend. For those unfamiliar with the phenomenon, there’s a life cycle to finance professionals who reach the epitome of financial success that typically ends with them getting into writing “thought leadership” blogs or opening up a meditation and Ayahuasca retreat in a desert somewhere.
In both chapters 1 and 2, issues of exceptions are largely ignored or otherwise referred to later in the book. So chapter 3 ends on a basic review of the Survey of Consumer Finances (2022) data that you often see in something like a stacked area chart displaying that poor people often have most of their money in cash or a vehicle, and as wealth increases, tangible assets make up a smaller percentage of wealth and assets like investments or business assets make up a larger and larger portion of wealth. To give two examples of this, a middle-class person is likely to have a large portion of their wealth in their home and retirement accounts, while an upper-class person is likely to have a large portion of their wealth in a company or the companies that they own. All of this is fair data to share in contextualizing changes in wealth by steps on the wealth ladder, but it’s a chapter that has been a chart that you’ve seen a hundred times before on social media.
The Issues in Part 2 – For the Poor & Uneducated
This section is broken into seven chapters: one for each level of the wealth ladder and then a summary chapter about mobility between the wealth levels. To summarize the problems with each chapter, a basic visual metaphor might help: Every chapter reads like the verbal advice or discussion you’d get about that level of wealth from someone like me after I’ve spent two hours at Wibby Brewing. That is to say, nothing in any of the chapters is necessarily wrong or inaccurate, but it’s simultaneously very prescriptive and yet incredibly vague about what to do or think about in the context of each wealth level.
For example, the advice for those in Level 1 (those with <$10,000 in net worth) is to work really hard, increase your income, and stay out of debt. It essentially posits that there is nothing else you could or should be doing at this stage, and it spends a great deal of time emphasizing the problems that taking on debt at this stage can cause you. But this framing presupposes the example of someone who generally lacks an education or any substantial skills; less charitably, it presupposes a poor person with little to no access to resources or support. And fair enough, that person certainly exists in the United States, and the book even takes pains to highlight that level 1 is, depressingly, the “default” for many folks in the United States. That is to say, it’s not unsympathetic to the plight of those with negative net worth or little in the way of income or wealth, but it hand-waves or otherwise ignores an entire class of people who also belong in this category: students.
Here is where chapters 4 (lv 1) and 5 (lv 2) blend together. Chapter 5 heavily emphasizes investing in your education; essentially, increasing your human capital so that you have greater earning potential and then can go on to have a higher income, which will fuel your wealth accumulation toward the middle class as described in levels 3 and 4. That advice is fair enough. But the book goes out of its way to essentially say that anyone at level 1 shouldn’t go to school or take on student debt while simultaneously telling people in level 1 to increase their income. It does this because it’s very cautious about the idea of incurring debt for school, but then not graduating or otherwise obtaining the income necessary to not only pay for the debt but also improve the circumstances relative to the opportunity costs of the student. The book also points out that all of this is untrue or otherwise not the case if family can lend their support (e.g., parents paying for college), in which case none of this caution applies or matters.
It’s a strange position to take, because as the book later explains in an autobiographical chapter, Maggiulli got into Stanford and didn’t have to pay for tuition because his family was below an income threshold where the school just provided substantial financial aid to poor students. While that doesn’t necessarily fail to align with the advice against taking on student debt at level 1 offered in chapters 4 & 5, it’s unmistakable that Maggiulli’s life has been enormously improved by going straight to a top college out of high school, and even if there hadn’t been such generous financial aid available, he’d have been foolish not to attend a top college even if it incurred student debt at the time. This is the same premise that children of lower, middle, and even upper-class families engage in when they take on student debt to attend law or medical school; the human capital promise of a quality education that unlocks the doors to lucrative professions is a promise worth incurring debt for!
Another oddity of chapter 5 is that a large portion of it is framed around a misattributed “Ikigai” concept. The chapter attributes this idea in a condensed form to a similar-but-different quote from Paul Graham, then zigs back to a more Ikigai-like framework without ever referencing or crediting it. For reference, in the chapter Maggiulli emphasizes the importance of: “doing something you’re good at, something you enjoy, and something people will pay you for.” The framework of Japanese Ikigai is “a reason for being,” highlighting the importance of overlap in: What you love, what you are good at, what you can be paid for, and then the missing element of “what the world needs.” You see my consternation at the idle laziness of attributing an ancient idea to a recent influencer and then “editing it” back to the almost plagiarized Ikigai concept.
It’s also noteworthy that these chapters commit anecdote sins worse than anywhere else in the chapter. As a popular style of writing, many books on finance or psychology these days are essentially collections of anecdotes that ostensibly support the takeaway or message of the chapter. Chapter 5, while supposedly endorsing getting an education and increasing your income, uses the example of MrBeast (who started a YouTube channel at 14) and Sam Altman, the founder of OpenAI, who dropped out of college. In the interest of name-dropping, the examples in many of the anecdotes in these chapters literally run contrary to the message of the chapters. Unless, of course, you want to argue that the message of chapter 5 is to become the most successful youtuber of all time or the founder of the first and most successful AI company.
The Issues in Part 2 – For the Middle and Upper Class
The second part of the book changes its tune and looks a lot more like Maggiulli’s prior writing in the later chapters, but that isn’t really the saving grace that I wish it were.
Chapter 6, about the 3rd level of wealth, is all over the place. As this marks the beginning of a financial phase where people’s financial resources start to benefit from compounding and leverage (i.e., investing, buying a home with a mortgage, etc.), it aims to cover a lot in a very small page count. The chapter generally recommends investing, but also investing in assets or activities that can increase your income; from this, it dovetails into a recommendation to consider side hustles. It also repeats warnings from the earlier chapters about overspending, but then takes care to emphasize that home ownership for those in the $100,000 – $1 million wealth category is ubiquitous.
The 4th level of wealth in chapter 7 is oddly overlaid with the 3rd in that while the 3rd level recommends investing and starting to build wealth through means other than income, it forgoes a lot of fundamentals; for example, while chapter 6 recommends investing, it’s not until chapter 7 that basic things like diversification are covered. The premise that someone is going to build up to over a million dollars in wealth without diversifying is certainly possible, but also bound to give every financial planner the cringes and shivers. No financial planner worth their salt would ever recommend investing without a basic understanding of diversification and taxes, but those subjects are more or less disregarded in both chapters 6 and 7 in favor of encouraging increases in income and then quickly moving onto the other half of chapter 7, which is the notion that you may need to engage in entrepreneurship to advance to the upper tranches of wealth.
The 4th level of wealth’s emphasis on speculative investing or business ownership is also odd because while the chapter essentially argues that it’s nigh impossible to get to the 5th level of wealth without engaging in entrepreneurship or high-risk investing, it also spends a decent chunk of time highlighting just how risky it is. This is then a snuck premise as we move onto chapter 8 and the 5th level of wealth, which emphasizes “compounding” your entrepreneurial activities through iterations of building, scaling, selling, and repeating at an even greater scale.
Yes, the 5th level of wealth is essentially characterized by the archetype of an entrepreneur who might manage to attain the lower rungs of the 5th level of wealth ($10 million – $100 million) by starting a business and selling it, but then goes on to emphasize that to reach the top of this category or the lofty goal of the 6th level of wealth, you will likely need to repeat this process in steadily larger business enterprises. The chapter presents some interesting data on how most people in the 6th level of wealth achieved their status by having multiple businesses prior to the one that truly “made them rich.”
It also (finally) makes mention of actual risk management in the financial product sense, but also in lifestyle terms; to this point, risk has only really been discussed in the context of “high risk high return” activities like investing or starting a business. This chapter finally makes mention of things like Umbrella insurance, training an aggressive dog, or otherwise hedging your high liability lifestyle activities. Somehow, until you have at least $10 million, the idea of getting disability insurance, life insurance, or even just adequately insuring your teenage driver against liability never seems to have come up.
The last level of wealth, the 6th, is covered insofar as you have really climbed to a lofty peak and now it’s probably time to focus entirely on risk management, or at least on protecting the wealth you’ve accumulated. It makes passing reference to catastrophic events such as business liability or divorce, but really doesn’t have much to say about what else you could or should do with wealth at this point; and to that extent, I’ll actually say “fair enough.” The book does a decent job of pointing out that once you have 9-figure wealth, there really isn’t much more that money could do for your quality of life. That’s a point I can’t really disagree with.
The Banal End of Part 2 and Part 3
Once you get past the 6th level of wealth and into the last chapter of part 2 and the entirety of part 3, it becomes somewhat obvious that Maggiulli ran out of steam, or at least, out of ideas, and realized he was a few thousand words short of his publishing goal.
The last chapter of part 2 covers the mobility between the levels of wealth, showing changes over shorter and longer periods of time. If there’s any material takeaway, it’s that, generally speaking, people trend toward being wealthier than losing their wealth. However, there’s a small cautionary point made that people in the 5th level are more likely to fall down the spectrum rather than move up. This is explained by the notion that the aforementioned risks of overconcentration or liability highlighted in the earlier chapter on the 5th level come to call, and that people get their wealth wiped out. For a book that spends a lot of time in the Survey of Consumer Finances (mentioned earlier) and the Panel Study of Income Dynamics, this hypothesis misses a glaring issue, which is that most people in the 5th and 6th levels of wealth are well into the retirement timeframe, and those that might live ten or twenty more years are not unlikely to have begun the “dissaving” phase of retirement in which they’re letting their wealth go to funding their retirement, paying for grandkid’s college, or otherwise engaging in end-of-life philanthropy and gifting.
As the book moves into Part 3, the filler problem kicks in in full. Chapter 11 asks: “Can people buy happiness?” And then goes on to performs a book report on the Kahneman Deaton and Killingsworth papers that argued happiness didn’t increase above $75,000 and then argued that it did, and then the consolidated joint paper by Kahneman and Killingsworth that resolved issues in the original Kahneman Deaton paper and concluded that happiness does increase with wealth, but only insofar as the change in wealth is material to the amount of wealth already present. Essentially, give a poor man money and he’ll be happy, but it will take a lot more money to make a wealthy person happy. It otherwise has literally nothing original to say except for an anecdote about a property manager at Maggiulli’s first job.
Chapter 12 is just another book report, but this time on Sahil Bloom’s “The 5 Types of Wealth,” with the explicit omission of financial (since the rest of the book already talked about money.) Once again, there are no original ideas or contributions. Just the summary explaining of other types of wealth than financial, that Bloom kindly explained in his book already. If there is any novel contribution, it’s the analogy that money is like salt, something that enhances the experience of the other types of wealth, insofar as money makes it easier to afford healthcare (physical and mental), reduces stress (generally but not always), and gives you the resources to buy back time (house cleaners, an assistant, etc.)
Then the book wraps up on chapter 13, Maggiulli’s concise autobiography, and an epilogue. Maggiulli’s autobiography is a reasonably interesting read (insofar as learning about any finance author’s history is to anyone inclined to care about it), but there are two standout things in it. One, he commits the classic top ten college alumni sin of saying: “I came from nothing, then I got into a top school, and then after that…” in about that many words, excepting that there were about 100x the words before and after the commas in telling that story.* Secondly, he attributes his career path’s success to a remarkably downplayed anecdote about a referral to an internship while at Stanford given by none other than Jay Bhattacharya, the head of the National Institute of Health in the current administration and notorious vaccine skeptic during the COVID pandemic.**
*Why is it that top ten school folks can never fail to mention their pedigree in any context, but also never acknowledge how insanely improbable and difficult it is to get into such a school? Do what everyone who didn’t go to a top school does: Never bring up your alma mater unless someone asks; spoilers, no one will, because no one cares.
**This isn’t really relevant in any other point, but just sort of a remarkably minor name drop of a controversial figure that apparently set Maggiulli on his life path.
The epilogue spends half of its length explaining the history behind how the Greeks estimated the area of a circle before discovering Pi, and tries to shoehorn it into being a metaphor for the imprecise nature of guideline principles on the subject of personal finance. Perhaps it was intended to be an apology for being too general in the actual substance of the book, but for a book whose subtitle is “proven strategies for every step of your financial life,” I find myself hard-pressed to be sympathetic about a last-pages plea for mercy on the overly generalized “proven strategies” the book covers.
Summarizing The Wealth Ladder
I said it in the bottom line up front: I really want to like this book, but I can’t recommend it.
The book feels like a promise made to a publisher on a deadline, or a blog post that got out of hand. It has data, but the data is incredibly cursory. It follows the pop-culture trend of starting every chapter with an anecdote and trying to sprinkle anecdotes into the content of the chapter, but many anecdotes don’t fit or outright contradict the message conveyed in the relevant passages.
There’s also the ongoing issue that multiple subjects and sections of the book are flatly just not Maggiulli’s work, just elbow plagiarism of their ideas. Half of some chapters, frankly, belong to other people and cultures: Naval Ravikant, the Japanese philosophy of Ikigai, Kahneman and Killingsworth’s research, and Sahil Bloom’s book take up not insignificant portions of the otherwise thoughtful “original” content of the book, and that’s a cause for concern. Notably, it’s not that they’re not given credit (except Ikigai), but summarizing someone else’s work as a substantial portion of your best seller is problematic in all contexts save biographies or edited consolidation texts.
On that note, if I’m inclined to be charitable, this book feels better if I think about it as an “edited book,” or rather as a collection of other people’s ideas. Maggiulli has contributed his original thesis (the wealth ladder concept) in this book, but it seems to exist around a chart I feel like I’ve seen a hundred times over the past decade (and perhaps it was Maggiulli’s work from 2017 circulating around the internet for the past 8 years that I’m thinking of), and too much of the book relies on the ideas of others simply being re-explained. Not every book needs to be 100% original ideas, and Maggiulli gives credit where credit is due; I just wish he could claim more of it for himself. As it is, the book is simply too thin for me to respect it as an original work of authorship.
2 of 5.