From investing in yourself to preserving millions, Breaking down the stages of wealth

16 Dec 2024 · 1 min

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In this segment of a two‑speaker discussion, the hosts recap the first two investing stages—self‑investment and business growth for individuals with under $100K liquid assets—and then shift focus to the third phase that follows a successful exit, typically yielding $5‑$15 million. They emphasize the paramount rule of never losing money and warn against the "Midas touch syndrome," where recent success leads to overconfidence and scattered investments. The conversation advises that at this wealth level, individuals can delegate capital management to professional wealth managers or private bankers, and can leverage their holdings to borrow against for real‑estate purchases, allowing a lifestyle without active day‑to‑day investment management.

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So we've talked about so far, like the first two stages of investing, right? If you're under like $100K liquid, be investing in yourself. If you haven't started a business, invest into that. Once you have your business, invest into your business. Now, once you get there, maybe you've sold, maybe you've exited, maybe you got that $5, $10, $15 mil in the bank. Yeah. What now? What's that next, like third phase of wealth preservation? Going along your train of thought.
Yeah, don't forget rule number one, which is don't lose money. And the biggest thing that happens is that people who exit, and, and I'm— I include myself here, is Midas touch syndrome, meaning I, I was really good at one thing and I made a lot of money doing it, that means I must be good at everything. So now I'm shotgunning this capital out into all these different deals and a lot of these distractions that we talked about. The fact is, if you have $10 or $15 million, you don't need to do a whole lot. You can hand that off to a professional wealth manager and a private banker. You can borrow against that to buy real estate if you want to. That doesn't even have to be actively managed to pay for your lifestyle.