Are You Rich? The 5 Levels Of Wealth & What You Need To Do To Reach Each One

0:00As a small business owner, you wear many hats. You're the owner, you're the marketer, you're the seller, you're the hirer. I remember in the early days, I was doing pretty much everything. I was writing, I was bookkeeping, I was selling, I was marketing, I was doing a lot. But lucky for you, you have LinkedIn. They have the tools to help you boost your visibility, find prospective customers, and find the best team for your small business, all in one place. So while LinkedIn can hang up all of your hats, it makes it easier to wear them all. Learn more at linkedin.com slash MBA show. For small business, a high-speed fiber connection is only one piece of the puzzle.

0:39You need the total solutions advantage from Comcast Business. It's a first-ever combination of the largest, fastest fiber-powered network, gig speeds with equipment and security included, plus a five-year price lock. Learn more. Get started for$60 a month for 12 months when you add an advanced solution to a qualifying internet package. Limited time offer restrictions apply. New customers only requires 300 Mbps internet, security edge, and additional qualifying service. One year agreement, paperless billing, and auto pay with bank account required, taxes and fees extra. Quick question. How many days do you think is in a million seconds?

1:17Go ahead. Take a guess. A million seconds is 11 days. Okay. Now, how long do you think is a billion seconds? Did you take a guess? Well, it's 31 years. A million seconds, 11 days. A billion seconds, 31 years. Most people have no concept of the difference between a million and a billion. And because of that, most people have no real concept of what wealth actually looks like at different levels. They hear, she's rich, and picture a billionaire. They hear, multimillionaire, and think it's basically the same thing. It's not the same thing. It's not even close. Today, I'm going to break down the five real levels of wealth, what they look like, what they feel like in real life, what it feels like to live like that, and how rare each one is, and what it actually takes to reach each level.

2:10Because when you understand how rare each level is, and even how achievable it is compared to what people think, everything changes. Today's episode topic comes from a question from a fan, Fred, and Fred asks, how do I know when I'm rich? Valid question. And by the way, if you want to ask a question, just go ahead to 100mba.net slash Q and we'll answer your question on the show.

2:36Welcome back to the$100 MBA show. I'm your host, Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business. I got a quick favor to ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff practical business advice that you're getting from this show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey.

3:13Today I'm going to answer Fred's question, when do you know when you're rich? But let me be clear, I'm only going to be covering what it means to be financially rich. because you get to be rich in other areas of life, of course, like relationships, health, spirituality, whatever that might be. But today, we're talking about money. When I was 22 years old, I had a realization that changed the entire direction of my life. If I was relying on someone else to pay me, I was not in control of my financial future. Full stop. It doesn't matter how hard you work. It doesn't matter how valuable you think you are.

3:44It doesn't matter how much you think you deserve. If the company decides they don't need you anymore, it's over. I know people personally, friends, family members who are high earners. They were living in five bedroom homes with three car garages with BMWs in the driveway. Then the economy shifted. They got let go from their jobs. And within a year or so, they were living in a two bedroom apartment paycheck to paycheck. This is not wealth. That is high income with no foundation under it. It could be shaken at any point. Real wealth requires you to have leverage. We're going to talk about that word a lot in today's episode.

4:19And there are two ways to get leverage, through a business or through an investment. Investment is leveraged through capital, money making money while you sleep, right? Money working for you. Business, on the other hand, uses all forms of leverage at the same time. Capital, labor, technology, media, distribution, multiple things working for you at once. This is really important because here are the facts. The facts are you only have 24 hours in the day. You have 24 hours. I have 24 hours. Everybody in the world has 24 hours in the day. The only way to produce wealth beyond what your own hours can generate is to use leverage.

4:57And this is the foundation of today's episode because you can't reach any of these levels of wealth without doing this. And this is backed by data. And by the way, we're going to be throwing a lot of statistics in today's episode to back up what I'm saying today. But just so you know that 90 % of people who have a net wealth of$10 million or more, have earned their wealth through business ownership, equity, and investing, not being an employee. Now, I mentioned this word net worth, and we're going to talk about what that means in today's episode because that's going to be the benchmark of each level of wealth.

5:31Let's get into it. So what is net worth? Well, add up everything you own, your cash, your investments, your real estate, your business equity, your cars, your assets, your stocks, and then subtract everything you owe, all your liabilities, all your debt, including what you owe on your mortgage. What's left is your net worth. And here's why this number matters more than your salary. If your net worth is high enough, you never have to work again. You have started to enter into what's called rich, wealthy. That obviously don't mean that you have enough money to last you the rest of your life by just spending that money.

6:10No, we're talking about using that money, leveraging that money through a pretty conservative investment that generates income for you. And until you reach that point, you're still exchanging time for money, where you have to put in time, effort, in order for you to be able to survive. And exchanging time for money is the definition of not being wealthy. So here are the five levels of wealth based on 2026 economic realities. And we're going to go through each one, how rare it is to get to each level. And then also, how do you get there? And what are some of the things you're going to expect along the way when you're at that level.

6:46Let's go. Level number one,$2 million to$4 million in net worth. And this is the entry point to real freedom. I believe once you get to this point where your net worth is between two and four million, you are now starting to taste what financial freedom is like. First of how rare is it to reach this level of wealth of two to four million in net worth? Well, according to USB Global Wealth Report, approximately 80 million people worldwide have a net worth of 1 million or more. So this is right before the 2 million mark. Now that sounds like a lot, but it's only 1.6 % of all adults on the planet.

7:23At 2 million to 4 million range specifically, you're roughly at the top 1 % of all human beings alive today. 1%. So if you are at that mark where you have calculated your net worth and you sold all your assets, hypothetically, and you subtracted your debts and you're in this range, you're in rare territory. 1 % out of 8 billion people. So what does it feel like to be at this level? Well, this, in my opinion, like I said, is where wealth begins. And here's the math. If you take$2 million and you make it liquid and you put into a basic index fund earning you a conservative 8 % return every year, that's$160 ,000 a year.

8:06Your base investment stays completely intact. Your money doesn't go anywhere, but you're living off the returns. At$4 million, you're generating about$320 ,000 a year, still having to touch your original capital. Can you live a good life on$160 ,000? It's not bad, but it's also not allowing you to indulge in all the luxuries you want. At$320 ,000 a year, you're getting pretty comfortable now. Now you can pretty much indulge. Your mortgage, your rent's going to be covered. A couple of solid cars, holidays every year. You're going to be comfortable. Generally a good life financially, okay? And here is the most important thing you want to hear about level one.

8:48If you reach it, you are rich. You are financially free. You don't have to work anymore because your money is making you money and making you enough to live. You never have to work another day in your life if you choose not to. Most people on earth will never reach this level. So if you ever reach this level, even once, it's pretty rare. It's absolutely extraordinary by any benchmark. Now, if you build a high margin service-based business, a digital product, a software, and you target around$200 ,000 to$400 ,000 in annual profits, not revenue, we're talking about profit, and let's say you live on 60 % to 70 % of what you earn, and you invest the rest in index funds every single month, but you don't miss a month, and you run this discipline for five or eight years, that's the most reliable path actually getting to$2 to$4 million for someone who's just starting out with nothing.

9:36So as you can see, it's not so far of reach. If you have a business that's making$300 to$400 to$500 in annual net profit, it's pretty reasonable for you to become rich, become a millionaire very quickly in less than a decade. And it's not easy, but it's also not impossible to have a business that generates that kind of profit. For small business, a high-speed fiber connection is only one piece of the puzzle. You need the total solutions advantage from Comcast Business. It's a first-ever combination of the largest, fastest fiber-powered network, gig speeds with equipment and security included, plus a five-year price lock.

10:12Learn more, get started for$60 a month for 12 months when you add an advanced solution to a qualifying internet package. Limited time offer restrictions apply, new customers only, requires 300 Mbps internet, security edge, and additional qualifying service. One-year agreement, paperless billing, and auto pay with bank account required, taxes and fees extra. This episode of The$100 MBA Show is brought to you by Booking.com. If you're looking to grow your vacation rental business, this is the place to be. Booking.com is one of the most downloaded travel apps in the world, and for good reason. Since 2010, they've helped over 1.8 billion vacation rental guests find places to stay.

10:54But here's the thing. Most vacation rental hosts don't even realize they can list their properties on Booking.com. And if you're not on the platform, your rental is basically invisible to millions of Booking.com travelers worldwide. After all, they can't book what they can't see, right? I book all my travel, personal and business, through Booking.com. And it's for good reason. I love their Genius program. So because I'm loyal and I use booking.com, I'm a genius level three. Yeah, I say it with pride because it gets me the best prices. I also love the fact that they give you all the details about all the hotels or the apartments that you're booking.

11:31So I know exactly what I'm getting before I check in. Does the place have a gym? Does it have a hairdryer? Does it have a fridge? What about a washing machine? I know because the listing is always accurate and their app is easy to use. So when I'm dead tired after a long flight and I'm trying to check into my accommodation, it's super simple. Just pull up my booking and show it to the host. So if your vacation rental isn't listed on booking.com, it could be invisible to millions of travelers searching the platform. Don't miss out on consistent bookings and global reach. Head over to booking.com and start your listing today.

12:06Get seen, get booked on booking.com. let's move on to level two that's five million to ten million in net worth this is where your life really has a meaningful shift this level is pretty crazy and it's pretty rare approximately 1.7 million people worldwide have made it to this level and out of 8 billion people on earth only 0.04 percent of the adult population have hit this level so we're talking about less than half of a percent. What it feels like. Well, in my opinion, this is the most interesting level of a list because I don't really believe your life is going to feel significantly different from this level and beyond.

12:50So this is kind of like this like breakthrough level where you become pretty, pretty comfortable in life. But let's run the numbers. Let's say you have$10 million earning you 8 % returns. You're making about$800 ,000 to a million dollars a year without working. A lot of people don't realize a million dollars is a lot of money, especially if you're trying to spend it in a year. Some people never actually sit down and do the math and calculate their dream life. I really highly recommend you do this exercise where you just sit down and you write down everything you want, whether it's like two homes and all the cars and the investments and the vacations, and you write everything down.

13:29And it's actually quite hard to do because you never actually had to dream like that in one sitting. But do it, right? It's going to take you about an hour or so and then run the numbers, calculate roughly how much is this going to cost you. And a lot of people are surprised it's not even close to a million dollars. A lot of people, it's like closer to like$300 ,000,$400 ,000. At level two, you stop looking at price tags. That's how I feel about it. You no longer look at how much something costs at the grocery store or when you're shopping for clothes. You fly business to first class by default because the difference doesn't really make much of a difference for you.

14:02You upgrade your home. You upgrade your experiences. you can afford to invest in a startup that needs a seed round of$20 ,000,$30 ,000. Just for fun, because you believe in the idea, right? But here's the most important thing about level two. The gap between level two and every other level above, like I mentioned, in terms of actual daily life experience is surprisingly small. I mean, the things that you can do beyond this point with the more money you're going to have beyond$10 million is not really that much. like what own a private jet? Personally, I think the experience of flying commercial on business class, especially internationally, it's a better experience on the plane.

14:43What else own an island? It's probably less headaches just to go visit an island, right? The point I'm making here is that you want to get to level two because level two's where a lot of funds being had. So how do you go from level one to level two? Number one, you need to know how to scale and grow your business. And And you want to do this as fast as possible because you want to take the profits from this scaling business and start earning with a second income stream, whether it's real estate or angel investing or the stock market, like I mentioned, an index fund. Now, again, I'm not a financial advisor.

15:15I'm not a financial expert. This is not financial advice. This is just for educational purposes. I have to say this, even though it's obvious. but the point here I'm trying to make here is that when you have a business, a lot of people can hustle their way to a million dollars, to two million dollars in revenue. They could be scrappy. They could be micromanaging, but in order for you to get to this level, up to$10 million in net worth, you're going to really need to start growing a team, start hiring some talent, start delegating and doing less and less. I believe that level one is the hardest level to achieve.

15:46It's the hardest level to get to. It takes time. It takes effort. It's a lot of grinding. But once you get to level one and you're making$2 million or your net worth is$2 million, I should say, getting to level two is actually not as hard. The jump from 4 million to 10 million is often faster than the jump to zero to one or 2 million. Why? Because of leverage. We talked about this because your capital is compounding alongside your active income, meaning your business is making money. Every year you have a profit, you take some of that profit, you allow that money to work for you in investments.

16:20It's working for you while you work on your business and make more money. See how it goes. And the reason why business is so wonderful is that you have the ability to have infinite amount of profit so that you can then take that profit and allow it to work for you. You're not just building, you're accelerating. It's like flooring the car rather than just tapping the accelerator. If this episode is changing how you think about money, wealth, achievement, success, then you should subscribe to the show. Why? because I'm working on an episode right now that I think you're going to absolutely love.

16:49It's called the five AI tools to replace a$60 ,000 employee and how a team of three becomes a team of one with AI. I'm really going into the research. I'm actually using these tools to figure out what type of team members can you actually leverage with AI? So if you have one team member, maybe you can turn them into the value of three team members, getting you more done, giving more value to your business allowing to make more money. Hit subscribe so you don't miss that episode when it comes out. All right, let's go to level three, 11 million to 30 million in net worth. Welcome to the ultra high net worth club.

17:27Okay, this is super, super rare. About 0.03 % of the world's adult population have reached this level. You're in rare territory. By the way, when you get into these levels, and I say how rare it is, it's not only like, wow, wow, you're special. No, it's also like it's a lonely place, right? There's not a lot of people like you. For context, there are more professional athletes in the world than there are people with this level of wealth. So what does it feel like? Obviously, all your needs are covered. Almost every single thing that you can think of, you can buy. But something unexpected really happens at this level.

18:03Something that nobody really talks about. And that's money needs to be managed. You're going to start to inherit some headaches you did not expect. You cannot let$20 million just sit in the bank account. You just can't do that. Inflation is eating at that money every single day. And just as fast as money compounds when you invest, so does it lose its value when you just don't do anything with it because inflation is a beast. $20 million is not worth$20 million tomorrow or the next day or the next year or the next decade. You need to deploy this capital intelligently. And you just have no room for error now.

18:42You need to make sure that you're investing in something not only that will get you a return, but something that is not going to sink all your money down the drain. The stakes are high, so you've got to be smart. And this is where a lot of people, especially people like me who didn't grow up with money, experience something nobody really prepares for, and that is analysis paralysis. You work incredibly hard to get to this point. The last thing you want to do is make a bad decision and lose a bunch of money after you spent years building it. And here's my advice. Get qualified financial help. Get a good team around you before you need them.

19:18I started to get this help at level one because I wanted to focus on my business and grow my business and do my thing and let my team of advisors help me. I have a team of people that are specialized in real estate, in stocks, in bonds, in commodities. Any investment that I think is worth me looking into, they can advise me on what are the best paths and how to go around it and what are the risks. This is money well spent. Qualified accountants, fiduciary financial advisors, people who have no financial incentive to push you one way or the other. They're getting paid regardless of the return and they don't get paid any more or less on the products that they offer you.

19:58They're not like affiliated with some sort of product and they are pushing you into something that you don't really need. So how do you get from level two to level three? By level three, your business should be largely systemized, meaning you can just leave your business, go on holiday for two, three, four months, and the business not only is going to sustain itself, but it's going to grow, right? It doesn't really need you anymore. You're really an investor in your own business. You have teams running your operations. You have leadership leading the team. And your role shifts from operator to strategist, really, and capital allocator.

20:31You're somebody who is thinking about how to allocate or deploy capital in your business that's in a smart way. Again, like an investor in your own business. Why? Because you want to know what to do with your profits. You have a lot of choices when you are profitable, meaning you can invest in your own business again and grow the business. You could take that money, take it off the books, right? Take a dividend and invest in something else. You could invest within the business in something else. You could buy assets. You can generate cash flow through those assets. There's so many things that you can do.

21:05And that becomes your new job. And a lot of entrepreneurs, creatives, they get to this level, then they don't like this life, okay? And this is kind of where they stop. They stop at level three. They're like, okay, I'm good. I'm cashing out. They sell their business. They move out of this game and they're like, I'm going to just now focus on my hobbies and go golfing. Because this is a different type of entrepreneur, a different type of business person. You're not creating things anymore. You're not team building. You're not doing any of that kind of stuff anymore. You're trying to make sure that you don't screw up being rich.

21:37Level number four, 31 million to 100 million in net worth. This is super rare. How rare is it? Well, less than 0.007%. percent. Okay. Just so you understand, that's less than one tenth of a percent. Only about half a million people in the world out of eight billion people on earth have reached this level. And just to put it in another way, for every 14 ,000 adults, imagine you're at a stadium watching a concert and there's 14 ,000 people in the stadium. For every 14 ,000 adults, there's only one person that reached this level. There's only one person in that stadium that has this kind of wealth.

22:15Now you're in super rarefied territory. And honestly, it's a lonely place. And the honest truth is that your life improvement from level three to level four is very marginal. And I genuinely mean that. Some people at this level own private jets. They own yachts. And let me tell you the reality about people. I know these people that have these jets, that have a yacht. I've been on these yachts with my friends that own them. And it's a lot of headaches. There's insurance, there's fuel, there's maintenance, there's hanger fees. What do we do when it's not in the water if it's a yacht? What if the plane, I need a pilot that is going to be able to take me around and do everything for me.

22:50I need crew. I need people to wash it. I need people to take care of it. I need security around it. Owning one of these things like a yacht or a plane is a business in itself. Flying business class again or first class on a commercial airline in a lot of ways is a lot better. You get on with no headache. When somebody spills champagne on the floor, you're not getting upset. The primary difference of a level four is not really the quality of your life, but it's really the impact you can make. And this is why a lot of people are attracted to this level, getting to level four and beyond, because they can make some real change in the world, like massive change, whether through philanthropy, whether it's building institutions, whether it's funding causes that matter to like curing certain diseases, helping people that are going through starvation, planting trees, doing things for the environment.

23:41And frankly, this level is quite complicated because more people are wanting something from you, more legal exposure, more to manage, and it's hard to hide. You can't be quietly rich at this level because you're going to have to deploy your capital somehow. And even in your local community, people are going to realize who you are, Not by the car you drive, but just the fact that you are now spending this money to invest in your local community or to help other people or do something with this money, even if it's an investment, you become now the talk of the town. This also means you have more legal exposure.

24:14You have more to manage. And some of this is good problems, but there's still problems. So how do you reach level four? Well, by this stage, you're primarily an investor. Your business may have been sold. You sold your business or you run it independently or it's gone public and so that you don't have full control anymore. Wealth grows through disciplined capital allocation and the investments that you make. A lot of people, they get to this level through private equity. This is a business you genuinely understand. This is how you get to this level. A lot of people have many and long term real estate investments.