The Wealth Ladder

The Wealth Ladder is a 2025 personal finance book from data blogger Nick Maggiulli. The core idea is good: that the best financial strategies will be different based on your current wealth level. Maggiulli divides people into 6 net worth levels based on orders of magnitude, from less than $10K to over $100M. The middle of the book has separate chapters with advice for people in each level, so a book that is already a fairly quick and easy read as a whole could be even quicker if you skipped the chapters about levels other than your own.

The beginning of the book tries to develop some simple rules phrased in a way that they can apply across every level, because they are based on a percentage of your net worth. I like the idea but don’t think it really worked. His “1% Rule” says you should only accept an opportunity to earn money if it will increase your net worth by at least 1%. But in practice, whether an earning opportunity is worth your time depends less on how many absolute dollars in generates as a % of your net worth, and more on how many $ per hour it generates. The “0.01% Rule” (don’t worry about spending money on anything that costs less than 0.01% of your net worth) is better. But whether it is a good rule for you will depend on your age and income.

In short, while tailoring his advice in 6 different ways for the 6 wealth levels of his ladder is an improvement on one-size-fits all personal finance books, even this much tailoring isn’t enough. Having a $1 million net worth is normal for a household in their 60s but would be exceptional for one in their 20’s; and vice-versa for a household with under $10k net worth. Chapter 10 explains the data on this well, but it kind of undermines the ideas of the previous chapters. Households with the same net worth should be making very different decisions in their 20s vs 60s.

The strongest part of the book is the use of data from the Survey of Consumer Finances and the Panel Study of Income Dynamics to show how people differ by wealth level and how people move from one level to another. For instance, he shows that the poor have most of their wealth in cash and vehicles; the middle class in homes; the wealthy in retirement accounts and stocks; the very rich in private businesses. Americans tend to climb the wealth ladder slowly but steadily; over 10 years they are twice as likely to move up the ladder as to move down; over 20 years, 3 times as likely. The median person who made it to one of the top 3 rings (i.e. the median millionaire) is in their 60s.

If you get ahold of a copy of the book it’s definitely worthwhile to flip through all the tables and figures, but I won’t be adding to to my short list of the best personal finance books. The core metaphor of the ladder carriers the implicit assumption that everyone should be trying to get to the top of the ladder. But if someone is satisfied with less than $10 million, why should they take on lots of time and effort and risk to start a business for a small chance to go over $100 million?

Maggiulli does address this in chapter 8, saying “Level 5 is also where you should seriously consider whether continuing to climb is truly worth it.” But conceding more than halfway through the book that you don’t necessarily need more than $100 million seems like too little, too late. Especially given that he argues that the main way to get out of level 4 ($1-$10M) is to start a business, and he explains in great detail how risky and unpleasant starting a business can be. Consider someone in the middle of Level 4 with a $5 million net worth. By the 4% rule, they could be living on $200k per year (putting them in the 84th percentile of US household income) even without working or drawing down the principal of their savings. Should someone in that great situation really put it all at risk and sacrifice their time possibly their mental wellbeing to start a business with the goal of pushing their wealth into the tens of millions? I think most people shouldn’t, and that Level 4 is the absolute latest that people should consider whether climbing higher is worth it. The 5th and 6th rungs of the ladder are greased; it may be better to chill at the 4th rung than to risk falling off. The book gives you all the tools to understand why, but its literal advice is still to try to climb to at least Level 5. Therefore like Rich Dad, Poor Dad, I can only recommend it to people capable of taking a book seriously, but not literally.