EP285: Investments Rich People Make That The Poor Know Nothing About

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Ever wonder how the rich seem to keep getting richer while most people are stuck spinning their wheels?

Spoiler alert: it’s not magic, and it’s not luck—it’s strategy.

But here’s the kicker: most of us don’t even know these strategies exist.

Today, we’re pulling back the curtain on what the ultra-wealthy are doing with their money and how you can adopt some of their moves to build lasting wealth.

Stick with us, and we’ll not only share their secrets but also show you how to apply them to create generational wealth—without falling into the traps that can drain your bank account.

The Spectrum of Wealth (Or, Why Net Worth Matters)

Let’s start with a little clarity: when we say “rich,” we’re not just talking about someone with a nice car and a vacation home.

Think of wealth like sushi 🍣 —it ranges from gas station rolls (technically sushi but…eh) to Michelin-star masterpieces (worth every penny).

The EY Global Wealth Research Report breaks it down into four categories:

• Mass Affluent: Less than $1 million in net worth
• High-Net-Worth: Over $1 million
• High-Net-Worth Plus: Over $5 million
• Ultra-High-Net-Worth: Over $10 million

Now, why does this matter?

Because the jump from Mass Affluent to High-Net-Worth is game-changing. Once you hit that $1 million mark, you gain the coveted title of Accredited Investor, unlocking a whole new world of investment opportunities.

Accredited Investor: The VIP Pass to Wealth Building

Think of it as graduating from the kids’ table to the adult table at Thanksgiving.

Accredited Investors get access to exclusive opportunities like private equity, hedge funds, venture capital, and private real estate deals—investments that are off-limits to the general public.

Here’s how you qualify:

• A net worth of $1 million+ (excluding your primary home), or
• Annual income of $200,000+ ($300,000 with a spouse) for the past two years.

These opportunities are designed to grow wealth exponentially while offering a level of protection and stability that most retail investments can’t match.

The Wealth Ladder: How Investing Evolves with Net Worth

The journey to lasting wealth isn’t a one-size-fits-all approach—it evolves as your financial situation grows. Let’s break it down:

➡️ The First Rung: Stocks, Bonds, and Single-Family Rentals

Most people start here because it’s accessible. You can buy stocks with a free trading app or invest in a rental property. But here’s the problem:

• Stock Market Volatility: Retail investors are more likely to panic-sell during downturns, locking in losses.
• Single-Family Risk: One missed rent check, and you’re scrambling to cover the mortgage. Add in lawsuits or costly repairs, and your “investment” can turn into a liability.

If you want to scale your wealth, you need to move beyond these entry-level strategies.

➡️ The Second Rung: Private Market Real Estate

Congratulations—you’ve reached the High-Net-Worth or High-Net-Worth Plus category. Now it’s time to play with the big players. Private real estate markets offer unparalleled stability, scalability, and returns.

Why multifamily real estate?

• Income Stability: Consistent cash flow from rental income.
• Tax Benefits: Significant savings through depreciation and other deductions.
• Risk Mitigation: Lower volatility compared to public markets.
• Inflation Hedge: Real estate values and rents tend to rise with inflation.

At this level, you’re building wealth on a foundation of stability while scaling your portfolio to maximize returns.

➡️ The Third Rung: Private Equity, Venture Capital, and Hedge Funds

Welcome to the Ultra-High-Net-Worth club! With $10 million+ in net worth, you’re now eligible for investments reserved for the financial elite. Think of this as Disney’s Club 33—exclusive, secret, and next-level.

These opportunities offer:

• Massive Growth Potential: Investments in high-growth startups or leveraged buyouts.
• Steady Passive Income: From private credit or infrastructure assets.
• Tax Advantages: Tailored for significant savings.

Not Ultra-Wealthy? Don’t Worry—There’s Still a Way In 😵😵

If you’re not yet Ultra-High-Net-Worth, don’t fret. Through partnerships like ours, you can still access private market investments like multifamily syndications. These opportunities allow you to invest like the ultra-wealthy—without needing their bank account size.

For instance, under Regulation D 506(b), we can include up to 35 Sophisticated Investors in each deal. This means you don’t need to be an Accredited Investor; you just need financial knowledge or guidance from an advisor.

Why It Matters

The ultra-wealthy aren’t just investing—they’re playing a different game entirely. They leverage tax strategies, access exclusive opportunities, and focus on long-term, scalable investments.

But here’s the thing: you don’t have to wait until you’re ultra-wealthy to start. By learning and adopting these strategies now, you can set yourself on the path to true financial freedom and a legacy that lasts generations.

Ready to start climbing the wealth ladder?

Let’s make it happen—together. ✨