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Category: Episodes

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#629: Nick Maggiulli: The Wealth Ladder Has Six Rungs (and Most People Never Climb Past Four)

Here’s the thing about personal finance advice: what works when you have $10,000 won’t work when you have $1 million.

Yet most financial guidance treats everyone the same, whether you’re scraping together a $1,000 emergency fund or deciding whether to upgrade to business class.

Nick Maggiulli, author of “The Wealth Ladder,” joins us to break down how money strategies must evolve as your net worth grows. He’s mapped out 6 distinct wealth levels, each requiring different approaches to spending, saving and investing.

The levels start simple.

Level 1 covers anyone with less than $10,000 in net worth — that’s 20 percent of American households. Here, bad luck gets amplified. A flat tire that costs $200 could spiral into job loss and debt if you can’t afford the repair.

Level 2 spans $10,000 to $100,000 in net worth. Maggiulli calls this “grocery freedom” — you can splurge on the nicer eggs without checking your bank balance.

Level 3, from $100,000 to $1 million, brings “restaurant freedom.”

Level 4, the $1 million to $10 million range, unlocks “travel freedom.”

Getting beyond Level 4 — into the $10 million-plus territory — requires business ownership or extreme patience. Maggiulli calculates that even saving $100,000 annually after hitting $1 million takes 23 years to reach $10 million, assuming 5 percent annual returns.

The data shows income matters more than frugality, especially in the early levels. The median household income in Level 1 is $32,000, but in Level 4 it’s $197,000, and in Level 6 it reaches $4.3 million.

We discuss why homeownership dominates wealth in Levels 2 and 3, how investment assets become crucial in higher levels, and why many people in Level 4 choose “Coast FIRE” over the grinding path to Level 5.

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#628: Why Nice People Struggle with Money, with Dr. Sandra Matz, Professor at Columbia Business School

You follow all the right personal finance advice. You know you should save more, invest regularly, and build an emergency fund. 

So why does it feel so much harder for some people than others?

The answer lies in your personality.

Dr. Sandra Matz, a professor at Columbia Business School, studies the intersection of psychology and money management. She joins us to explain why one-size-fits-all financial advice often fails.

Her research found that agreeable people — those who are caring, empathetic, and put others first — have a harder time saving money. 

The solution isn’t better budgeting apps or stricter rules. It’s reframing financial goals to match your personality type. 

For example, agreeable people save more effectively when they view their emergency fund as protection for loved ones or a way to help others during tough times. 

By contrast, competitive personalities respond better to framing savings as getting ahead in life.

This personalized approach extends beyond personality assessments. Algorithms can now predict your financial behavior using digital footprints — social media activity, spending patterns, even smartphone usage. With just 300 Facebook likes, artificial intelligence understands your money habits better than your spouse does.

The conversation also covers the darker implications. Companies exploit these same psychological insights to manipulate spending decisions. Dr. Matz discusses data cooperatives as a solution — member-owned entities where people collectively benefit from their shared information.

We dive into negotiation strategies for salary increases, breaking out of financial echo chambers, and using AI to optimize your money management without losing your decision-making autonomy.

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#627: Q&A: When Being Good With Money … Isn’t Good Enough

Jlyn and her husband are 20 years from retirement, but they’ve got their eye on a second home they’ll live in when the time comes. Should they make the purchase now, or keep saving?

Reese was recently laid off, and she’s struggling to choose between two financially responsible paths. Should she continue her long-term disability insurance? Or is it wiser to save money?

Kip’s youngest has finally graduated from college, and he’s looking forward to an early retirement. But, with the eyewatering costs of long-term healthcare, is this still a viable path? 

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

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#626: The Hidden Psychology Behind Failed Dreams, with Yale’s Dr. Zorana Ivcevic Pringle

A software programmer and an accountant walk into retirement planning. Are they being creative? Dr. Zorana Ivcevic Pringle, a senior research scientist at Yale University’s Center for Emotional Intelligence, says absolutely.

Pringle defines creativity as something that’s both original and effective, whether you’re solving an accounting problem or planning an unconventional retirement.

We explore the gap between having ideas and actually implementing them. You have this brilliant vision for starting a business, changing careers, or retiring early, but somehow you never take the first step. Pringle calls this the implementation gap, and she explains why it happens.

The conversation centers on a hypothetical couple: both 55 years old, one a programmer, the other in middle management. They want to retire at 57 and travel the world. Pringle uses this example to illustrate how creative problem-solving works in real life.

She explains that creativity requires comfort with uncertainty. When you’re doing something new, you don’t have a blueprint or checklist. There’s always the risk that your early retirement plan could fail spectacularly — imagine having to return to work at 59 after the market tanks and your portfolio gets crushed.

Here’s the key insight: you don’t need full confidence to start. Pringle compares creative confidence to fuel in a car. You don’t need a full tank — you can start with just a quarter tank and refuel along the way. Each small success builds more confidence for the next step.

The bottom line? Innovation happens through constant iteration. Your final destination might change throughout your career and retirement, and that’s completely normal.

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#625: JL Collins Part 2: What Happens When You Don’t Need to Work Anymore?

What do you do when you’ve reached financial independence? JL Collins says it depends entirely on your spending rate, not just your net worth.

Collins joins us for part two of our conversation about what happens after you reach financial independence. He tackles the question of whether you should invest differently once you’ve “won the game.”

Someone with $5 million spending $100,000 per year sits in a completely different position than someone with the same amount spending $200,000 per year. The first person can afford to stay aggressive with stocks. The second person needs bonds to smooth the ride.

Collins walks through his withdrawal strategy using his daughter as an example. She stepped away from corporate life in her early thirties and now follows an 80-20 stock/bond allocation. 

She pulls dividends from both funds into her checking account, covering about 2.5 percent of her target 4 percent withdrawal rate. Vanguard automatically sells shares to cover the remaining 1.5 percent.

We cover Collins’ thoughts on the 4 percent rule, which he calls extraordinarily conservative. He references Bill Bengen’s research showing that 5 percent withdrawals succeed 86 percent of the time. 

Collins would take those odds to escape a soul-crushing job, especially since most financially independent people end up accidentally making money anyway.

We discuss the tension between frugal habits that build wealth – and learning to spend money once you have it. Collins flies first class, but he drives a basic car.

Collins explains why financially independent people often stay engaged with work — the problem was never work itself, but working without agency.

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#624: JL Collins Part 1: The Simple Path vs. The “Optimal” Path

JL Collins doesn’t know what the efficient frontier is. The author of “The Simple Path to Wealth” — the guy synonymous with VTSAX and chill — admits this right off the bat when we challenge him with advanced investing concepts.

Collins joins us for Part 1 of a two-part series where we skip the basics and dive straight into the complex stuff. We grill him on whether his simple approach actually beats more sophisticated strategies, and his answer might surprise you.

He concedes that Paul Merriman’s four-fund portfolio probably outperforms his one-fund approach mathematically. But Collins argues that execution trumps optimization every time. Most people can’t stick with complex strategies for 20 years, especially when those strategies require selling winners to buy losers – something that goes against human nature.

Collins prioritizes what works in real life over what looks good on paper. He calls index funds “self-cleansing” because they automatically rotate out failing companies and sectors while rotating in the new winners. You don’t need to predict which companies will dominate next – you’ll own whatever rises to the top.

The episode covers his thoughts on VTSAX versus VTI, international diversification, and why he’d rather put Tabasco than Cholula on his eggs — his quirky way of explaining personal preferences in nearly identical investment options.

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#623: Q&A: “Help! My Mom’s Financial Crisis Is Becoming Mine!”

An anonymous caller feels trapped in a no-win situation with her financially reckless mother. She has the means to bail her out, but it doesn’t feel right. What should she do?

Shannon is excited about investing in several companies overseas. But she can only access them using American Depository Receipts. What are they, and how do they work?

Jennifer calls back with an update on putting a vacation on a credit card and playing the rewards game.

Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.

Enjoy!

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#622: First Friday: Why Americans Are More Pessimistic Than Ever

The headlines said America added 147,000 jobs in June. The reality? Private companies actually cut 33,000 positions.

Grad students just lost access to unlimited borrowing. Parent PLUS loans now cap at $65,000. And tariffs are about to jump as high as 70 percent.

Everything is changing at once — taxes, tariffs, student loans, and immigration policy. And data from the University of Michigan says that consumers feel more pessimistic than they did six months ago.

Welcome to the 4th of July First Friday episode. On America’s 249th birthday, we unpack these economic stories.

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#621: Q&A: Which Investments Should Go Into Which Accounts?

DOWNLOAD the FREE Cheat Sheet: ASSET LOCATION MADE SIMPLE at affordanything.com/assetlocation

Jared is attracted to the favorable terms of the annuity plan that his employer offers, but he’s hesitant to pay the opportunity cost of locking up his money now. What should he do?

An anonymous caller is struggling to find the efficient frontier with only three funds to choose from in his Thrift Savings Plan. Is there any hope for him?

Jack feels great about the funds in his portfolio, but he’s losing sleep over how to apportion them between his taxable, pre-tax and Roth accounts. What’s the best tax strategy for him?

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

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#620: The Hidden Cost of Replacing You at Work, with “Money with Katie” host Katie Gatti Tassin

You probably think your value to your employer equals your paycheck. Katie Gatti Tassin has news for you — you’re worth way more than that.

The host of “Money with Katie” recently joined us to break down a framework that could change how you negotiate forever. Her formula is simple: Your worth equals your market rate plus what it costs to replace you, raised to the power of your unique skills.

Most people focus only on market rate — what similar jobs pay in your area. You can find this through salary transparency laws, LinkedIn data, or job postings. But that’s just the starting point.

The real eye-opener? Replacement costs. When you leave, companies face recruiting fees, interview time, onboarding expenses, and lost productivity. For mid-level roles, recruiters charge 15 to 25 percent of your first-year salary. Senior positions cost even more — headhunters for executive roles charge 25 to 35 percent of total compensation.

A company replacing an $80,000 employee might pay $20,000 just in recruiter fees. For a $200,000 executive, that jumps to $70,000. Add training time and the productivity gap while they search, and replacement costs can hit 50 to 200 percent of annual salary.

Then there’s your “special sauce” — the unique value you bring. Maybe you have deep client relationships, specialized skills, or institutional knowledge that would take months for a replacement to develop.

Katie learned this framework through her own career pivots. She started as an ad copywriter but shifted into user experience writing after working closely with a UX designer who told her the pay was much better. That internal pivot positioned her for an external move that doubled her compensation from $70,000 to $140,000.

Katie had to catch a flight — she visited our New York studios during her book launch tour — but the conversation covers practical tactics for earning more and building wealth.

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