Oct. 28, 2025
130: What it takes to be in the top 10%, 5%, and 1% of Wealth (in 2025)
If you think hitting $1 million means you’re financially free, think again. That might’ve been true in 1980, but today? That barely puts you in the top 10% of net worth in America—and it’s not enough to stop working.
In todays episode, I break down the exact net worth thresholds for the top 10%, 5%, and 1% in the U.S.—both total net worth and investable net worth. I’ll also share where I personally stand, how wealth strategies evolve at each level, and what it really takes to break into the top 1%.
Using fresh data from the Federal Reserve’s 2022 Survey of Consumer Finances, we’ll walk through how wealth changes—not just in amount, but in structure.
You’ll see why the climb from median net worth to the top 10% is steep, but getting from 10% to 1% is an exponential leap.
And here’s the big insight: the difference between owning assets and owning capital.
Most people in the top 10% are “house-rich,” but not capital-rich. Nearly 60% of their wealth is tied up in a primary residence that doesn’t generate income. Meanwhile, in the top 1%, nearly half of net worth comes from private business equity—not real estate or stocks.
We’ll also unpack what I call The Great Decoupling—the moment the truly wealthy shift their wealth strategy entirely. It’s not about more assets—it’s about different kinds of assets, systems, and mindset.
If you’re a high earner or successful professional feeling stuck—even with a $2M+ portfolio—this is your wake-up call. You may already be in the top 10%, or even top 5%, but if you’re still using the wrong wealth management playbook, you’ll never break into the top 1%.
Whether you’re just starting to think about investable net worth, or already building legacy-level wealth, this video is your roadmap for moving from income dependence to true financial independence—and eventually, to becoming the CEO of your wealth.
Transcript
WEBVTT
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[SPEAKER_00]: The biggest myth about wealth in America is that once you hit $1 million dollars, you're financially free.
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[SPEAKER_00]: That might have been true in 1980, but today you're barely in the top 10 percent.
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[SPEAKER_00]: I'm Christopher Nelson, and in this video, I'm breaking down the exact net worth numbers for the top 10 percent, 5 percent and 1 percent all share where I stand personally and
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[SPEAKER_00]: Now, for this video, we'll measure wealth using two definitions, traditional net worth, which is your total assets minus liabilities, including your primary residence, and investable net worth, which excludes your primary residence.
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[SPEAKER_00]: Now, let's start where most high earners already are.
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[SPEAKER_00]: Before we dive into the numbers,
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[SPEAKER_00]: you need to understand something critical.
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[SPEAKER_00]: These aren't just bigger numbers.
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[SPEAKER_00]: They represent fundamentally different financial realities.
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[SPEAKER_00]: The median American household has a net worth about $193,000.
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[SPEAKER_00]: Getting from that median to the top 10 percent requires accumulating more than one million dollars additional.
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[SPEAKER_00]: That's a big jump right, but here's where it gets interesting.
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[SPEAKER_00]: to the top 1%, that requires more than 10xing your net worth.
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[SPEAKER_00]: This isn't a ladder.
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[SPEAKER_00]: It's an exponential curve.
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[SPEAKER_00]: Now, here's why the difference between total net worth and investible net worth matters so much.
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[SPEAKER_00]: Your primary residence, that's a lifestyle asset.
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[SPEAKER_00]: It provides shelter, maybe it appreciates, but it doesn't generate income.
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[SPEAKER_00]: and it's illiquid.
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[SPEAKER_00]: What actually matters for wealth building is your investable network.
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[SPEAKER_00]: That's capital that's actively working for you in markets, in businesses, in productive assets.
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[SPEAKER_00]: So in this video, I'll walk you through the exact thresholds for each tier.
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[SPEAKER_00]: Show you how each portfolio's change at each level and reveal the strategic mistake
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[SPEAKER_00]: that keeps people stuck and explain what I call the great decoupling that separates the top one percent from everyone else.
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[SPEAKER_00]: Let's start with the top 10 percent.
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[SPEAKER_00]: According to the federal reserves 2022 survey of consumer finances, which is the gold standard for wealth data, here's what it takes.
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[SPEAKER_00]: To be in the top 10 percent of total net worth,
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[SPEAKER_00]: you need $1.6 million.
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[SPEAKER_00]: But to be in the top 10% of an investable net worth, it drops to $842,000.
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[SPEAKER_00]: So why is there such a massive gap?
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[SPEAKER_00]: Well, for most people at this level, nearly half of your net worth.
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[SPEAKER_00]: over $700,000 is locked up in your primary residence.
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[SPEAKER_00]: This is successful professionals, senior tech workers, doctors, established small business owners.
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[SPEAKER_00]: You've maxed out your 401ks and IRAs.
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[SPEAKER_00]: You probably have some company stock, maybe even a rental property, you're comfortable, but you're definitely still working full-time.
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[SPEAKER_00]: and you're starting to feel the tension between your income and actual time freedom.
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[SPEAKER_00]: Now here's what the data shows about the breakdown of wealth at this level.
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[SPEAKER_00]: Real estate makes up 59% of total assets.
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[SPEAKER_00]: That's the dominant holding by far.
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[SPEAKER_00]: Stocks 31% of assets.
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[SPEAKER_00]: Business equity, just 9% of assets.
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[SPEAKER_00]: And here's the kicker, mortgages represent 13% of net worth.
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[SPEAKER_00]: You're leveraged to own that real estate.
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[SPEAKER_00]: So what does this portfolio tell us?
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[SPEAKER_00]: You're essentially making two big bets.
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[SPEAKER_00]: Number one is that your house appreciates.
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[SPEAKER_00]: And number two is that the stock market goes up.
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[SPEAKER_00]: Your house rich,
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[SPEAKER_00]: but not capital rich.
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[SPEAKER_00]: Nearly 60% of you wealth is in an illiquid asset that doesn't generate income and you're paying interest to own it.
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[SPEAKER_00]: The biggest mistake of this level is the stock concentration trap.
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[SPEAKER_00]: Let me tell you a personal story.
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[SPEAKER_00]: After my first IPO at Splunk, I watched my network swing $100,000 or more per day.
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[SPEAKER_00]: Everything was concentrated in one stock.
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[SPEAKER_00]: When the market smiled, I felt like a genius.
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[SPEAKER_00]: When it didn't, I panicked.
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[SPEAKER_00]: I had over a $3 million on paper, but 90% of it was in the Splunk stock during the six month lock-out period.
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[SPEAKER_00]: My wife was pregnant and we wanted to buy a house.
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[SPEAKER_00]: and I was just paralyzed by watching my net worth giant rate wildly, then the market corrects or your company stock crashes and well, just evaporates.
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[SPEAKER_00]: So what's the strategic focus if you're at this level?
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[SPEAKER_00]: Here's what I did.
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[SPEAKER_00]: First,
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[SPEAKER_00]: begin systematic divestiture.
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[SPEAKER_00]: Don't dump everything overnight.
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[SPEAKER_00]: That's a tax disaster, but start the transition.
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[SPEAKER_00]: Second, implement tax-aware diversification.
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[SPEAKER_00]: Use those RSU-vesting schedules, implement tax loss harvesting, think strategically.
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[SPEAKER_00]: In third, start thinking in systems.
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[SPEAKER_00]: Create your first investment thesis.
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[SPEAKER_00]: This isn't just buy index funds and hope, it's a documented strategy.
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[SPEAKER_00]: Fourth, track investible net worth separately, stop counting your house as part of your wealth.
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[SPEAKER_00]: It's a lifestyle asset, not productive capital.
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[SPEAKER_00]: Now, with some time and wise investments, you're well on your way to the top 5%.
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[SPEAKER_00]: Let's look at those numbers.
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[SPEAKER_00]: To be in the top 5% of total net worth, you need $3.8 million.
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[SPEAKER_00]: But to be in the top 5% of investible net worth, it drops roughly to 2 million.
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[SPEAKER_00]: You've more than doubled your investible net worth from the top 10% at significant.
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[SPEAKER_00]: And life isn't drastically different here.
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[SPEAKER_00]: But it has changed some.
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[SPEAKER_00]: You probably have multiple income streams now.
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[SPEAKER_00]: Your salary, RSUs, maybe some investment income trickling in, estate planning conversations are starting.
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[SPEAKER_00]: Tax complexity is increased and you're starting to think,
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[SPEAKER_00]: could I actually stop working?
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[SPEAKER_00]: I thought I'd be retired when I accumulated this much, but it doesn't seem near.
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[SPEAKER_00]: Here's why you feel like that.
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[SPEAKER_00]: When you look at the portfolio composition for the top 5% real estate is still 59%.
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[SPEAKER_00]: Stocks are still 31%.
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[SPEAKER_00]: Business equity is still
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[SPEAKER_00]: 9% mortgage leverage is still negative 13%.
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[SPEAKER_00]: The top 5% portfolio looks almost identical to the top 10% just with bigger numbers.
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[SPEAKER_00]: You've essentially scaled the same strategy.
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[SPEAKER_00]: More real estate, more stocks, more complexity.
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[SPEAKER_00]: but the same fundamental approach.
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[SPEAKER_00]: And that's the trap because what got you here won't get you to the top 1%.
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[SPEAKER_00]: The biggest mistake of this level is complexity without systems.
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[SPEAKER_00]: Here's the pattern that I see consistently, multiple investment accounts across different platforms.
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[SPEAKER_00]: working with two or three financial professionals who don't coordinate with each other, scattered spreadsheets, no unified view of your portfolio, really stayed over here, stocks over there, some private equity deal a friend recommended, making reactive decisions as opportunities arise with no overarching strategy.
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[SPEAKER_00]: You're spending 10 hours researching a new car purchase
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[SPEAKER_00]: up to $50,000 per year, you're taking on inappropriate risk because you don't know the true correlation between the assets in your portfolio and you're using cookie cutter strategies from the advisor, you're honestly outgrowing.
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[SPEAKER_00]: I've been in this exact situation myself.
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[SPEAKER_00]: I had over $4 million, and I was managing it like I was a weekend project.
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[SPEAKER_00]: You know, the one that you keep putting off over and over, I knew that had to change.
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[SPEAKER_00]: So, here's what strategic focus looks like at this level.
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[SPEAKER_00]: First, you need to build an operating system.
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[SPEAKER_00]: I'm talking a systematic approach, not just more assets.
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[SPEAKER_00]: Second,
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[SPEAKER_00]: formalized your advisory team, who need roles such as a tax strategist and a state attorney and an insurance specialist who all work together not in silos.
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[SPEAKER_00]: In third, create a tax strategy that goes way beyond April 15th.
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[SPEAKER_00]: We're talking donor advised funds, entity structuring, strategic charitable giving, and fourth, this is critical.
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[SPEAKER_00]: to architecture, stop just collecting assets.
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[SPEAKER_00]: And instead start designing a system that helps you accomplish specific goals.
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[SPEAKER_00]: Now, here's where things get really interesting.
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[SPEAKER_00]: Because when you master this and break through to the top 1%, the data reveals something absolutely fascinating.
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[SPEAKER_00]: Here are the exact numbers for the top 1%.
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[SPEAKER_00]: To be in the top 1% of total net worth,
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[SPEAKER_00]: you need 11.6 million dollars.
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[SPEAKER_00]: But to be in the top 1% of investible net worth, it drops to 9.3 million dollars.
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[SPEAKER_00]: Notice something?
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[SPEAKER_00]: Your investible net worth is now 80% of your total net worth.
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[SPEAKER_00]: Nearly everything is productive capital.
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[SPEAKER_00]: Compare that to the 47% in the top 5 in 10% buckets.
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[SPEAKER_00]: And life has fundamentally changed, traditional advice.
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[SPEAKER_00]: It completely breaks down at this level.
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[SPEAKER_00]: You've now ventured deep into what I call the financial services desert.
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[SPEAKER_00]: You're too small for a single family office.
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[SPEAKER_00]: Those require $100 million and cost over a million dollars a year to operate.
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[SPEAKER_00]: but you're too complex for retail financial advisors.
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[SPEAKER_00]: At this stage, your family should be able to live off the cash flow from your portfolio, unless you've had severe lifestyle creep along the way.
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[SPEAKER_00]: In the top 1% multi-generational wealth planning becomes the priority.
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[SPEAKER_00]: And the question shifts from can I retire,
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[SPEAKER_00]: to what's my legacy.
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[SPEAKER_00]: Now let me show you the portfolio composition because it's much different than the previous two.
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[SPEAKER_00]: Remember, in the top 10% and 5% they look like this.
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[SPEAKER_00]: 59% real estate, 31% stocks, 9% business equity,
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[SPEAKER_00]: and mortgage debt was roughly negative 13% of net worth.
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[SPEAKER_00]: But when we look at the top 1% everything shifts, real estate allocation drops from 60% down to 23% of the portfolio.
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[SPEAKER_00]: Stocks say the stain at 31% but business equity was the largest driver.
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[SPEAKER_00]: from just 9% to 41% of their net worth.
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[SPEAKER_00]: And at this level, mortgage debt is just negative 3% of their portfolio.
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[SPEAKER_00]: This is what I call the great decoupling.
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[SPEAKER_00]: Let me break down what's happening here because these are the most important wealth insights in this entire video.
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[SPEAKER_00]: The first insight is that real estate collapses from 59% to 23%.
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[SPEAKER_00]: The top 1% have essentially decoupled
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[SPEAKER_00]: Their primary residence is no longer a big piece of their wealth.
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[SPEAKER_00]: They own property, sure.
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[SPEAKER_00]: But it shifted to investment grade real estate, such as commercial and industrial.
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[SPEAKER_00]: The second insight, and this is the big one, business equity explodes from 9% to 41%.
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[SPEAKER_00]: Business equity increases by a factor of 4.5 times as a percentage of the portfolio.
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[SPEAKER_00]: This is the single biggest differentiator between the top 5 percent and the top 1 percent.
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[SPEAKER_00]: The third insight, which I think is interesting, stock allocation stays the same.
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[SPEAKER_00]: This is shocking when you think about it, both the top 5 percent and the top 1 percent have identical stock market exposure, 31 percent.
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[SPEAKER_00]: If superior stock picking or market timing,
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[SPEAKER_00]: was what separated the groups, we'd see a much different allocation here, but we don't.
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[SPEAKER_00]: The real wealth is built through business ownership and not stock selection.
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[SPEAKER_00]: The fourth insight is that leverage disappears at the personal level.
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[SPEAKER_00]: Mortgage debt goes down from 13% to just 3%.
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[SPEAKER_00]: The top 1% own their assets outright.
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[SPEAKER_00]: They've built a financial fortress that can weather any market conditions.
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[SPEAKER_00]: This doesn't mean that they don't use leverage.
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[SPEAKER_00]: it means they've shifted from the personal balance sheet to the business balance sheet.
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[SPEAKER_00]: So what does this all mean?
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[SPEAKER_00]: The journey to the top 1% isn't about being a better investor.
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[SPEAKER_00]: It's about becoming the CEO of your wealth.
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[SPEAKER_00]: The top 10% and 5% they primarily invest in assets other people own.
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[SPEAKER_00]: Public stocks, real estate, mutual funds, the top 1% they primarily own
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[SPEAKER_00]: operating companies direct business interests.
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[SPEAKER_00]: This is the transformation from capital allocator to capital owner.
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[SPEAKER_00]: And there's historical data to back this up.
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[SPEAKER_00]: Since 1989, the top 1% share of the national wealth has grown from 23% to 27%.
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[SPEAKER_00]: More recent data shows it's now over 30%.
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[SPEAKER_00]: Why is this?
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[SPEAKER_00]: because business equity in private company valuations grew faster than real estate.
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[SPEAKER_00]: The owners of that equity captured those gains.
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[SPEAKER_00]: And over 30 plus years, that compounds into massive wealth divergence.
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[SPEAKER_00]: So what's the biggest mistake at the top 1% level?
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[SPEAKER_00]: What I call the one more million trap.
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[SPEAKER_00]: You hit 8 million, 10 million, even 12 million investible.
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[SPEAKER_00]: But you're still managing it like you're building wealth.
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[SPEAKER_00]: You're still concentrated in high-risk positions.
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[SPEAKER_00]: You're still treating your portfolio like a growth engine instead of an income engine.
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[SPEAKER_00]: No systems, no transition plan from accumulation to sustainable income generation.
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[SPEAKER_00]: And this is where the microfamily office becomes essential.
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[SPEAKER_00]: Remember that financial services desert I mentioned, here's the breakdown, a single family office requires $100 million in assets and costs over $1 million per year overhead.
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[SPEAKER_00]: As a full-time staff dedicated office, the works.
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[SPEAKER_00]: A multi-family office requires $30 million.
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[SPEAKER_00]: cost $300,000 to $1 million per year has shared resources, but still expensive and often uses generic cookie cutter strategies.
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[SPEAKER_00]: But a micro family office, it's the sweet spot if you have $1 million to $30 million net worth.
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[SPEAKER_00]: Institutional grade strategy without institutional overhead.
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[SPEAKER_00]: With a micro family office approach, you become the CEO of your wealth.
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[SPEAKER_00]: You build a fractional expert team, tax strategist, estate attorney, private equity advisors, you implement systematic processes, and you focus on income generation, not just accumulation, and you create clear architecture for generation wealth.
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[SPEAKER_00]: So what's the strategic focus at this level?
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[SPEAKER_00]: First, implement the architect build run framework, architect, create your investment thesis in legacy statement, define why your wealth exists.
15:24.511 --> 15:35.601
[SPEAKER_00]: build set of entity structures, build your teams, implement systems, run, establish quarterly reviews, systematic optimization, and ongoing management.
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[SPEAKER_00]: This is an absolute must for somebody in the top one percent.
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[SPEAKER_00]: It works for anyone with more than one million dollars of investible net worth.
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[SPEAKER_00]: Second, transition from growth to income, build diversified income streams, target six to 10 percent,
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[SPEAKER_00]: annual cash on cash return on your income generating assets, make your money work for you.
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[SPEAKER_00]: Right now, I'm managing a portfolio that generates $200,000 in annual income.
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[SPEAKER_00]: That covers all of my family's essential expenses.
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[SPEAKER_00]: We live off the portfolio now and not my salary.
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[SPEAKER_00]: And to me,
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[SPEAKER_00]: This should be the goal, not just a big network statement on a balance sheet, but actual freedom.
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[SPEAKER_00]: Third, implement more sophisticated tax architecture.
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[SPEAKER_00]: I'm talking things like donor-advised funds, strategic entity structuring,
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[SPEAKER_00]: balance sheet versus income statement giving a good certified tax planner or CTP is worth their weight in gold.
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[SPEAKER_00]: They can easily keep $100,000 a year in your pocket that would otherwise be going to taxes.
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[SPEAKER_00]: And fourth, establish family governance.
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[SPEAKER_00]: Define your legacy and values.
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[SPEAKER_00]: Create an education plan for the next generation.
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[SPEAKER_00]: Build systems that outlast you.
16:53.617 --> 16:57.564
[SPEAKER_00]: This is the transformation from the top 10% to the top 1%.
16:57.884 --> 16:59.067
[SPEAKER_00]: It's not just more money.
16:59.307 --> 17:00.970
[SPEAKER_00]: It's a completely different game.
17:01.170 --> 17:03.495
[SPEAKER_00]: And here's exactly why so many people miss it.
17:03.635 --> 17:05.458
[SPEAKER_00]: It's the bonus insight I promised.
17:05.759 --> 17:08.143
[SPEAKER_00]: It's called the wealth percentile trap.
17:08.404 --> 17:10.287
[SPEAKER_00]: You can hit these numbers.
17:10.267 --> 17:11.709
[SPEAKER_00]: and still be stuck.
17:12.010 --> 17:15.715
[SPEAKER_00]: The data shows what matters isn't just the threshold.
17:16.015 --> 17:20.682
[SPEAKER_00]: It's the transformation in how you manage your wealth, think about it.
17:21.143 --> 17:34.122
[SPEAKER_00]: Somebody with $2 million all looked up in real estate and concentrated in company stock versus somebody with $2 million in diversified income-producing assets, both are top 5% on paper.
17:34.362 --> 17:39.970
[SPEAKER_00]: But only one has actual financial freedom.
17:39.950 --> 17:45.429
[SPEAKER_00]: 500,000 new millionaires, but most of them won't reach the top 1% Why?
17:45.469 --> 17:49.082
[SPEAKER_00]: Because they're going to follow the top 10% playbook.
17:49.113 --> 17:55.082
[SPEAKER_00]: load up on real estate in public stocks instead of adopting a CEO mindset.
17:55.222 --> 18:02.894
[SPEAKER_00]: The solution isn't complicated, but it requires understanding that at each tier, you need a different strategy.
18:03.054 --> 18:08.923
[SPEAKER_00]: Trying to reach the top 1% using top 10% tactics could happen, but it's highly unlikely.
18:09.243 --> 18:11.627
[SPEAKER_00]: Making money and managing wealth.
18:11.607 --> 18:13.531
[SPEAKER_00]: are completely different skill sets.
18:13.891 --> 18:17.578
[SPEAKER_00]: And most of us are brilliant at one, but amateur at the other.
18:17.919 --> 18:21.906
[SPEAKER_00]: So if you're still watching this, chances are you fit into one of these buckets.
18:22.207 --> 18:31.103
[SPEAKER_00]: And if you're ready to stop managing your wealth like a side hustle and start running it like a business, then I'd love to have you at my next free live workshop.
18:31.304 --> 18:32.586
[SPEAKER_00]: It's happening in a few days.
18:32.566 --> 18:36.852
[SPEAKER_00]: and I'll be walking you through the architect phase of the wealth ops framework.
18:36.872 --> 18:46.607
[SPEAKER_00]: The exact same process I used to go from a portfolio of concentrated equity to a portfolio generating over $200,000 in annual cash flow.
18:46.627 --> 18:54.618
[SPEAKER_00]: In this workshop we'll cover the legacy statement framework defining your why so you wealth actually serves your life goals.
18:54.959 --> 18:57.122
[SPEAKER_00]: How to create your investment thesis.
18:57.102 --> 19:01.467
[SPEAKER_00]: so that every financial decision you make has a clear strategic filter.
19:01.728 --> 19:07.595
[SPEAKER_00]: How to assess your current portfolio and identify the exact gaps that are keeping you stuck.
19:07.615 --> 19:13.021
[SPEAKER_00]: And the critical first step to building your own micro family office without million dollar overhead.
19:13.061 --> 19:18.908
[SPEAKER_00]: This is completely free, but spots are limited to 20 people and you must qualify.
19:18.888 --> 19:25.270
[SPEAKER_00]: Click the link below or head to wealthops.io forward slash go and save your seat.
19:25.611 --> 19:31.210
[SPEAKER_00]: In the meantime, you can learn more about micro family offices by checking out this video.
00:00.031 --> 00:06.516
[SPEAKER_00]: The biggest myth about wealth in America is that once you hit $1 million dollars, you're financially free.
00:06.697 --> 00:11.821
[SPEAKER_00]: That might have been true in 1980, but today you're barely in the top 10 percent.
00:12.041 --> 00:29.616
[SPEAKER_00]: I'm Christopher Nelson, and in this video, I'm breaking down the exact net worth numbers for the top 10 percent, 5 percent and 1 percent all share where I stand personally and
00:29.596 --> 00:46.719
[SPEAKER_00]: Now, for this video, we'll measure wealth using two definitions, traditional net worth, which is your total assets minus liabilities, including your primary residence, and investable net worth, which excludes your primary residence.
00:46.739 --> 00:50.023
[SPEAKER_00]: Now, let's start where most high earners already are.
00:50.344 --> 00:52.667
[SPEAKER_00]: Before we dive into the numbers,
00:52.647 --> 00:55.610
[SPEAKER_00]: you need to understand something critical.
00:55.850 --> 00:57.572
[SPEAKER_00]: These aren't just bigger numbers.
00:57.813 --> 01:01.577
[SPEAKER_00]: They represent fundamentally different financial realities.
01:01.997 --> 01:06.642
[SPEAKER_00]: The median American household has a net worth about $193,000.
01:07.663 --> 01:16.172
[SPEAKER_00]: Getting from that median to the top 10 percent requires accumulating more than one million dollars additional.
01:16.232 --> 01:21.658
[SPEAKER_00]: That's a big jump right, but here's where it gets interesting.
01:21.638 --> 01:26.606
[SPEAKER_00]: to the top 1%, that requires more than 10xing your net worth.
01:26.846 --> 01:27.687
[SPEAKER_00]: This isn't a ladder.
01:28.248 --> 01:29.791
[SPEAKER_00]: It's an exponential curve.
01:30.011 --> 01:35.980
[SPEAKER_00]: Now, here's why the difference between total net worth and investible net worth matters so much.
01:36.280 --> 01:39.145
[SPEAKER_00]: Your primary residence, that's a lifestyle asset.
01:39.265 --> 01:43.832
[SPEAKER_00]: It provides shelter, maybe it appreciates, but it doesn't generate income.
01:43.812 --> 01:44.874
[SPEAKER_00]: and it's illiquid.
01:45.074 --> 01:49.382
[SPEAKER_00]: What actually matters for wealth building is your investable network.
01:49.723 --> 01:57.056
[SPEAKER_00]: That's capital that's actively working for you in markets, in businesses, in productive assets.
01:57.437 --> 02:01.825
[SPEAKER_00]: So in this video, I'll walk you through the exact thresholds for each tier.
02:02.105 --> 02:07.575
[SPEAKER_00]: Show you how each portfolio's change at each level and reveal the strategic mistake
02:07.555 --> 02:15.526
[SPEAKER_00]: that keeps people stuck and explain what I call the great decoupling that separates the top one percent from everyone else.
02:15.967 --> 02:18.069
[SPEAKER_00]: Let's start with the top 10 percent.
02:18.290 --> 02:27.462
[SPEAKER_00]: According to the federal reserves 2022 survey of consumer finances, which is the gold standard for wealth data, here's what it takes.
02:27.723 --> 02:30.947
[SPEAKER_00]: To be in the top 10 percent of total net worth,
02:30.927 --> 02:33.532
[SPEAKER_00]: you need $1.6 million.
02:34.254 --> 02:39.545
[SPEAKER_00]: But to be in the top 10% of an investable net worth, it drops to $842,000.
02:40.286 --> 02:43.533
[SPEAKER_00]: So why is there such a massive gap?
02:43.734 --> 02:48.784
[SPEAKER_00]: Well, for most people at this level, nearly half of your net worth.
02:48.764 --> 02:53.611
[SPEAKER_00]: over $700,000 is locked up in your primary residence.
02:53.952 --> 03:00.321
[SPEAKER_00]: This is successful professionals, senior tech workers, doctors, established small business owners.
03:00.642 --> 03:03.005
[SPEAKER_00]: You've maxed out your 401ks and IRAs.
03:03.566 --> 03:10.857
[SPEAKER_00]: You probably have some company stock, maybe even a rental property, you're comfortable, but you're definitely still working full-time.
03:10.837 --> 03:16.083
[SPEAKER_00]: and you're starting to feel the tension between your income and actual time freedom.
03:16.323 --> 03:20.968
[SPEAKER_00]: Now here's what the data shows about the breakdown of wealth at this level.
03:21.268 --> 03:24.892
[SPEAKER_00]: Real estate makes up 59% of total assets.
03:25.593 --> 03:28.015
[SPEAKER_00]: That's the dominant holding by far.
03:28.396 --> 03:30.638
[SPEAKER_00]: Stocks 31% of assets.
03:30.958 --> 03:34.482
[SPEAKER_00]: Business equity, just 9% of assets.
03:34.462 --> 03:39.272
[SPEAKER_00]: And here's the kicker, mortgages represent 13% of net worth.
03:39.513 --> 03:42.139
[SPEAKER_00]: You're leveraged to own that real estate.
03:42.319 --> 03:44.023
[SPEAKER_00]: So what does this portfolio tell us?
03:44.263 --> 03:46.207
[SPEAKER_00]: You're essentially making two big bets.
03:46.568 --> 03:48.833
[SPEAKER_00]: Number one is that your house appreciates.
03:49.434 --> 03:52.060
[SPEAKER_00]: And number two is that the stock market goes up.
03:52.240 --> 03:53.483
[SPEAKER_00]: Your house rich,
03:53.463 --> 03:54.626
[SPEAKER_00]: but not capital rich.
03:54.967 --> 04:01.305
[SPEAKER_00]: Nearly 60% of you wealth is in an illiquid asset that doesn't generate income and you're paying interest to own it.
04:01.506 --> 04:06.299
[SPEAKER_00]: The biggest mistake of this level is the stock concentration trap.
04:06.540 --> 04:08.485
[SPEAKER_00]: Let me tell you a personal story.
04:08.465 --> 04:15.273
[SPEAKER_00]: After my first IPO at Splunk, I watched my network swing $100,000 or more per day.
04:15.634 --> 04:17.816
[SPEAKER_00]: Everything was concentrated in one stock.
04:18.097 --> 04:20.860
[SPEAKER_00]: When the market smiled, I felt like a genius.
04:21.461 --> 04:23.383
[SPEAKER_00]: When it didn't, I panicked.
04:23.403 --> 04:30.352
[SPEAKER_00]: I had over a $3 million on paper, but 90% of it was in the Splunk stock during the six month lock-out period.
04:30.652 --> 04:33.696
[SPEAKER_00]: My wife was pregnant and we wanted to buy a house.
04:33.676 --> 04:43.536
[SPEAKER_00]: and I was just paralyzed by watching my net worth giant rate wildly, then the market corrects or your company stock crashes and well, just evaporates.
04:43.917 --> 04:46.984
[SPEAKER_00]: So what's the strategic focus if you're at this level?
04:47.585 --> 04:48.407
[SPEAKER_00]: Here's what I did.
04:48.687 --> 04:49.609
[SPEAKER_00]: First,
04:49.589 --> 04:52.215
[SPEAKER_00]: begin systematic divestiture.
04:52.515 --> 04:53.818
[SPEAKER_00]: Don't dump everything overnight.
04:54.139 --> 04:57.626
[SPEAKER_00]: That's a tax disaster, but start the transition.
04:58.047 --> 05:01.314
[SPEAKER_00]: Second, implement tax-aware diversification.
05:01.695 --> 05:07.547
[SPEAKER_00]: Use those RSU-vesting schedules, implement tax loss harvesting, think strategically.
05:07.527 --> 05:09.772
[SPEAKER_00]: In third, start thinking in systems.
05:10.173 --> 05:11.896
[SPEAKER_00]: Create your first investment thesis.
05:12.237 --> 05:16.346
[SPEAKER_00]: This isn't just buy index funds and hope, it's a documented strategy.
05:16.466 --> 05:22.359
[SPEAKER_00]: Fourth, track investible net worth separately, stop counting your house as part of your wealth.
05:22.619 --> 05:25.806
[SPEAKER_00]: It's a lifestyle asset, not productive capital.
05:25.786 --> 05:30.351
[SPEAKER_00]: Now, with some time and wise investments, you're well on your way to the top 5%.
05:30.931 --> 05:31.912
[SPEAKER_00]: Let's look at those numbers.
05:32.193 --> 05:37.238
[SPEAKER_00]: To be in the top 5% of total net worth, you need $3.8 million.
05:37.558 --> 05:43.164
[SPEAKER_00]: But to be in the top 5% of investible net worth, it drops roughly to 2 million.
05:43.424 --> 05:48.629
[SPEAKER_00]: You've more than doubled your investible net worth from the top 10% at significant.
05:48.930 --> 05:51.372
[SPEAKER_00]: And life isn't drastically different here.
05:51.352 --> 05:52.655
[SPEAKER_00]: But it has changed some.
05:52.935 --> 05:55.601
[SPEAKER_00]: You probably have multiple income streams now.
05:56.102 --> 06:03.098
[SPEAKER_00]: Your salary, RSUs, maybe some investment income trickling in, estate planning conversations are starting.
06:03.679 --> 06:06.846
[SPEAKER_00]: Tax complexity is increased and you're starting to think,
06:07.197 --> 06:08.600
[SPEAKER_00]: could I actually stop working?
06:09.001 --> 06:12.868
[SPEAKER_00]: I thought I'd be retired when I accumulated this much, but it doesn't seem near.
06:13.109 --> 06:14.291
[SPEAKER_00]: Here's why you feel like that.
06:14.592 --> 06:20.884
[SPEAKER_00]: When you look at the portfolio composition for the top 5% real estate is still 59%.
06:21.906 --> 06:23.589
[SPEAKER_00]: Stocks are still 31%.
06:24.551 --> 06:26.455
[SPEAKER_00]: Business equity is still
06:26.435 --> 06:30.604
[SPEAKER_00]: 9% mortgage leverage is still negative 13%.
06:30.985 --> 06:36.998
[SPEAKER_00]: The top 5% portfolio looks almost identical to the top 10% just with bigger numbers.
06:37.158 --> 06:39.383
[SPEAKER_00]: You've essentially scaled the same strategy.
06:39.904 --> 06:43.532
[SPEAKER_00]: More real estate, more stocks, more complexity.
06:43.512 --> 06:45.997
[SPEAKER_00]: but the same fundamental approach.
06:46.017 --> 06:50.646
[SPEAKER_00]: And that's the trap because what got you here won't get you to the top 1%.
06:50.866 --> 06:55.294
[SPEAKER_00]: The biggest mistake of this level is complexity without systems.
06:55.575 --> 07:01.386
[SPEAKER_00]: Here's the pattern that I see consistently, multiple investment accounts across different platforms.
07:01.366 --> 07:22.385
[SPEAKER_00]: working with two or three financial professionals who don't coordinate with each other, scattered spreadsheets, no unified view of your portfolio, really stayed over here, stocks over there, some private equity deal a friend recommended, making reactive decisions as opportunities arise with no overarching strategy.
07:22.565 --> 07:31.373
[SPEAKER_00]: You're spending 10 hours researching a new car purchase
07:31.353 --> 07:45.922
[SPEAKER_00]: up to $50,000 per year, you're taking on inappropriate risk because you don't know the true correlation between the assets in your portfolio and you're using cookie cutter strategies from the advisor, you're honestly outgrowing.
07:45.942 --> 07:48.467
[SPEAKER_00]: I've been in this exact situation myself.
07:48.447 --> 07:53.315
[SPEAKER_00]: I had over $4 million, and I was managing it like I was a weekend project.
07:53.615 --> 07:57.782
[SPEAKER_00]: You know, the one that you keep putting off over and over, I knew that had to change.
07:58.202 --> 08:01.888
[SPEAKER_00]: So, here's what strategic focus looks like at this level.
08:01.968 --> 08:04.733
[SPEAKER_00]: First, you need to build an operating system.
08:04.993 --> 08:08.839
[SPEAKER_00]: I'm talking a systematic approach, not just more assets.
08:09.240 --> 08:10.101
[SPEAKER_00]: Second,
08:10.081 --> 08:20.671
[SPEAKER_00]: formalized your advisory team, who need roles such as a tax strategist and a state attorney and an insurance specialist who all work together not in silos.
08:21.072 --> 08:25.957
[SPEAKER_00]: In third, create a tax strategy that goes way beyond April 15th.
08:26.097 --> 08:37.708
[SPEAKER_00]: We're talking donor advised funds, entity structuring, strategic charitable giving, and fourth, this is critical.
08:37.688 --> 08:40.572
[SPEAKER_00]: to architecture, stop just collecting assets.
08:41.172 --> 08:46.639
[SPEAKER_00]: And instead start designing a system that helps you accomplish specific goals.
08:47.020 --> 08:49.063
[SPEAKER_00]: Now, here's where things get really interesting.
08:49.203 --> 08:56.933
[SPEAKER_00]: Because when you master this and break through to the top 1%, the data reveals something absolutely fascinating.
08:57.213 --> 09:00.277
[SPEAKER_00]: Here are the exact numbers for the top 1%.
09:01.078 --> 09:05.063
[SPEAKER_00]: To be in the top 1% of total net worth,
09:05.043 --> 09:08.186
[SPEAKER_00]: you need 11.6 million dollars.
09:08.427 --> 09:14.914
[SPEAKER_00]: But to be in the top 1% of investible net worth, it drops to 9.3 million dollars.
09:15.234 --> 09:15.815
[SPEAKER_00]: Notice something?
09:16.736 --> 09:21.181
[SPEAKER_00]: Your investible net worth is now 80% of your total net worth.
09:21.421 --> 09:23.283
[SPEAKER_00]: Nearly everything is productive capital.
09:23.523 --> 09:27.928
[SPEAKER_00]: Compare that to the 47% in the top 5 in 10% buckets.
09:27.908 --> 09:31.655
[SPEAKER_00]: And life has fundamentally changed, traditional advice.
09:32.076 --> 09:34.301
[SPEAKER_00]: It completely breaks down at this level.
09:34.601 --> 09:39.712
[SPEAKER_00]: You've now ventured deep into what I call the financial services desert.
09:39.892 --> 09:42.136
[SPEAKER_00]: You're too small for a single family office.
09:42.677 --> 09:47.487
[SPEAKER_00]: Those require $100 million and cost over a million dollars a year to operate.
09:47.467 --> 09:50.754
[SPEAKER_00]: but you're too complex for retail financial advisors.
09:51.095 --> 09:58.231
[SPEAKER_00]: At this stage, your family should be able to live off the cash flow from your portfolio, unless you've had severe lifestyle creep along the way.
09:58.492 --> 10:03.603
[SPEAKER_00]: In the top 1% multi-generational wealth planning becomes the priority.
10:03.743 --> 10:06.690
[SPEAKER_00]: And the question shifts from can I retire,
10:06.670 --> 10:08.693
[SPEAKER_00]: to what's my legacy.
10:08.993 --> 10:14.481
[SPEAKER_00]: Now let me show you the portfolio composition because it's much different than the previous two.
10:14.861 --> 10:19.127
[SPEAKER_00]: Remember, in the top 10% and 5% they look like this.
10:19.147 --> 10:24.915
[SPEAKER_00]: 59% real estate, 31% stocks, 9% business equity,
10:24.895 --> 10:29.081
[SPEAKER_00]: and mortgage debt was roughly negative 13% of net worth.
10:29.442 --> 10:37.994
[SPEAKER_00]: But when we look at the top 1% everything shifts, real estate allocation drops from 60% down to 23% of the portfolio.
10:38.234 --> 10:43.782
[SPEAKER_00]: Stocks say the stain at 31% but business equity was the largest driver.
10:43.762 --> 10:47.507
[SPEAKER_00]: from just 9% to 41% of their net worth.
10:47.708 --> 10:52.735
[SPEAKER_00]: And at this level, mortgage debt is just negative 3% of their portfolio.
10:52.815 --> 10:55.659
[SPEAKER_00]: This is what I call the great decoupling.
10:55.940 --> 11:03.070
[SPEAKER_00]: Let me break down what's happening here because these are the most important wealth insights in this entire video.
11:03.290 --> 11:08.237
[SPEAKER_00]: The first insight is that real estate collapses from 59% to 23%.
11:08.298 --> 11:13.465
[SPEAKER_00]: The top 1% have essentially decoupled
11:13.445 --> 11:17.150
[SPEAKER_00]: Their primary residence is no longer a big piece of their wealth.
11:17.330 --> 11:18.812
[SPEAKER_00]: They own property, sure.
11:19.073 --> 11:24.420
[SPEAKER_00]: But it shifted to investment grade real estate, such as commercial and industrial.
11:24.680 --> 11:31.009
[SPEAKER_00]: The second insight, and this is the big one, business equity explodes from 9% to 41%.
11:31.950 --> 11:38.980
[SPEAKER_00]: Business equity increases by a factor of 4.5 times as a percentage of the portfolio.
11:38.960 --> 11:44.769
[SPEAKER_00]: This is the single biggest differentiator between the top 5 percent and the top 1 percent.
11:44.909 --> 11:49.817
[SPEAKER_00]: The third insight, which I think is interesting, stock allocation stays the same.
11:50.118 --> 11:58.671
[SPEAKER_00]: This is shocking when you think about it, both the top 5 percent and the top 1 percent have identical stock market exposure, 31 percent.
11:58.951 --> 12:01.896
[SPEAKER_00]: If superior stock picking or market timing,
12:01.876 --> 12:07.763
[SPEAKER_00]: was what separated the groups, we'd see a much different allocation here, but we don't.
12:08.084 --> 12:12.890
[SPEAKER_00]: The real wealth is built through business ownership and not stock selection.
12:13.070 --> 12:17.896
[SPEAKER_00]: The fourth insight is that leverage disappears at the personal level.
12:18.156 --> 12:21.741
[SPEAKER_00]: Mortgage debt goes down from 13% to just 3%.
12:22.161 --> 12:24.845
[SPEAKER_00]: The top 1% own their assets outright.
12:24.985 --> 12:28.850
[SPEAKER_00]: They've built a financial fortress that can weather any market conditions.
12:29.190 --> 12:31.393
[SPEAKER_00]: This doesn't mean that they don't use leverage.
12:31.373 --> 12:37.138
[SPEAKER_00]: it means they've shifted from the personal balance sheet to the business balance sheet.
12:37.519 --> 12:38.579
[SPEAKER_00]: So what does this all mean?
12:38.940 --> 12:43.404
[SPEAKER_00]: The journey to the top 1% isn't about being a better investor.
12:43.684 --> 12:47.107
[SPEAKER_00]: It's about becoming the CEO of your wealth.
12:47.127 --> 12:52.092
[SPEAKER_00]: The top 10% and 5% they primarily invest in assets other people own.
12:52.432 --> 13:01.380
[SPEAKER_00]: Public stocks, real estate, mutual funds, the top 1% they primarily own
13:01.360 --> 13:04.404
[SPEAKER_00]: operating companies direct business interests.
13:04.424 --> 13:09.410
[SPEAKER_00]: This is the transformation from capital allocator to capital owner.
13:09.710 --> 13:11.512
[SPEAKER_00]: And there's historical data to back this up.
13:11.833 --> 13:18.121
[SPEAKER_00]: Since 1989, the top 1% share of the national wealth has grown from 23% to 27%.
13:18.521 --> 13:22.266
[SPEAKER_00]: More recent data shows it's now over 30%.
13:22.907 --> 13:24.128
[SPEAKER_00]: Why is this?
13:24.108 --> 13:29.954
[SPEAKER_00]: because business equity in private company valuations grew faster than real estate.
13:29.974 --> 13:32.356
[SPEAKER_00]: The owners of that equity captured those gains.
13:32.596 --> 13:38.683
[SPEAKER_00]: And over 30 plus years, that compounds into massive wealth divergence.
13:38.703 --> 13:41.505
[SPEAKER_00]: So what's the biggest mistake at the top 1% level?
13:41.746 --> 13:44.308
[SPEAKER_00]: What I call the one more million trap.
13:44.608 --> 13:49.153
[SPEAKER_00]: You hit 8 million, 10 million, even 12 million investible.
13:49.133 --> 13:52.239
[SPEAKER_00]: But you're still managing it like you're building wealth.
13:52.259 --> 13:54.964
[SPEAKER_00]: You're still concentrated in high-risk positions.
13:55.245 --> 14:00.354
[SPEAKER_00]: You're still treating your portfolio like a growth engine instead of an income engine.
14:00.675 --> 14:07.308
[SPEAKER_00]: No systems, no transition plan from accumulation to sustainable income generation.
14:07.328 --> 14:11.175
[SPEAKER_00]: And this is where the microfamily office becomes essential.
14:11.155 --> 14:22.241
[SPEAKER_00]: Remember that financial services desert I mentioned, here's the breakdown, a single family office requires $100 million in assets and costs over $1 million per year overhead.
14:22.462 --> 14:25.689
[SPEAKER_00]: As a full-time staff dedicated office, the works.
14:26.130 --> 14:29.839
[SPEAKER_00]: A multi-family office requires $30 million.
14:29.819 --> 14:39.596
[SPEAKER_00]: cost $300,000 to $1 million per year has shared resources, but still expensive and often uses generic cookie cutter strategies.
14:39.896 --> 14:45.666
[SPEAKER_00]: But a micro family office, it's the sweet spot if you have $1 million to $30 million net worth.
14:46.007 --> 14:49.973
[SPEAKER_00]: Institutional grade strategy without institutional overhead.
14:50.134 --> 14:54.561
[SPEAKER_00]: With a micro family office approach, you become the CEO of your wealth.
14:54.541 --> 15:11.918
[SPEAKER_00]: You build a fractional expert team, tax strategist, estate attorney, private equity advisors, you implement systematic processes, and you focus on income generation, not just accumulation, and you create clear architecture for generation wealth.
15:12.299 --> 15:14.441
[SPEAKER_00]: So what's the strategic focus at this level?
15:14.701 --> 15:24.531
[SPEAKER_00]: First, implement the architect build run framework, architect, create your investment thesis in legacy statement, define why your wealth exists.
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[SPEAKER_00]: build set of entity structures, build your teams, implement systems, run, establish quarterly reviews, systematic optimization, and ongoing management.
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[SPEAKER_00]: This is an absolute must for somebody in the top one percent.
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[SPEAKER_00]: It works for anyone with more than one million dollars of investible net worth.
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[SPEAKER_00]: Second, transition from growth to income, build diversified income streams, target six to 10 percent,
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[SPEAKER_00]: annual cash on cash return on your income generating assets, make your money work for you.
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[SPEAKER_00]: Right now, I'm managing a portfolio that generates $200,000 in annual income.
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[SPEAKER_00]: That covers all of my family's essential expenses.
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[SPEAKER_00]: We live off the portfolio now and not my salary.
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[SPEAKER_00]: And to me,
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[SPEAKER_00]: This should be the goal, not just a big network statement on a balance sheet, but actual freedom.
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[SPEAKER_00]: Third, implement more sophisticated tax architecture.
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[SPEAKER_00]: I'm talking things like donor-advised funds, strategic entity structuring,
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[SPEAKER_00]: balance sheet versus income statement giving a good certified tax planner or CTP is worth their weight in gold.
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[SPEAKER_00]: They can easily keep $100,000 a year in your pocket that would otherwise be going to taxes.
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[SPEAKER_00]: And fourth, establish family governance.
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[SPEAKER_00]: Define your legacy and values.
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[SPEAKER_00]: Create an education plan for the next generation.
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[SPEAKER_00]: Build systems that outlast you.
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[SPEAKER_00]: This is the transformation from the top 10% to the top 1%.
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[SPEAKER_00]: It's not just more money.
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[SPEAKER_00]: It's a completely different game.
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[SPEAKER_00]: And here's exactly why so many people miss it.
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[SPEAKER_00]: It's the bonus insight I promised.
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[SPEAKER_00]: It's called the wealth percentile trap.
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[SPEAKER_00]: You can hit these numbers.
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[SPEAKER_00]: and still be stuck.
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[SPEAKER_00]: The data shows what matters isn't just the threshold.
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[SPEAKER_00]: It's the transformation in how you manage your wealth, think about it.
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[SPEAKER_00]: Somebody with $2 million all looked up in real estate and concentrated in company stock versus somebody with $2 million in diversified income-producing assets, both are top 5% on paper.
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[SPEAKER_00]: But only one has actual financial freedom.
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[SPEAKER_00]: 500,000 new millionaires, but most of them won't reach the top 1% Why?
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[SPEAKER_00]: Because they're going to follow the top 10% playbook.
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[SPEAKER_00]: load up on real estate in public stocks instead of adopting a CEO mindset.
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[SPEAKER_00]: The solution isn't complicated, but it requires understanding that at each tier, you need a different strategy.
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[SPEAKER_00]: Trying to reach the top 1% using top 10% tactics could happen, but it's highly unlikely.
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[SPEAKER_00]: Making money and managing wealth.
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[SPEAKER_00]: are completely different skill sets.
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[SPEAKER_00]: And most of us are brilliant at one, but amateur at the other.
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[SPEAKER_00]: So if you're still watching this, chances are you fit into one of these buckets.
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[SPEAKER_00]: And if you're ready to stop managing your wealth like a side hustle and start running it like a business, then I'd love to have you at my next free live workshop.
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[SPEAKER_00]: It's happening in a few days.
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[SPEAKER_00]: and I'll be walking you through the architect phase of the wealth ops framework.
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[SPEAKER_00]: The exact same process I used to go from a portfolio of concentrated equity to a portfolio generating over $200,000 in annual cash flow.
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[SPEAKER_00]: In this workshop we'll cover the legacy statement framework defining your why so you wealth actually serves your life goals.
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[SPEAKER_00]: How to create your investment thesis.
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[SPEAKER_00]: so that every financial decision you make has a clear strategic filter.
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[SPEAKER_00]: How to assess your current portfolio and identify the exact gaps that are keeping you stuck.
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[SPEAKER_00]: And the critical first step to building your own micro family office without million dollar overhead.
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[SPEAKER_00]: This is completely free, but spots are limited to 20 people and you must qualify.
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[SPEAKER_00]: Click the link below or head to wealthops.io forward slash go and save your seat.
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[SPEAKER_00]: In the meantime, you can learn more about micro family offices by checking out this video.
