Making money feels unfair.
People from different levels of the money game shout money advice at each other. It rarely works because someone on level one getting advice from someone on level one thousand can’t relate.
A better approach is to understand the levels of the money game. Then figure out how to progress from one level to the next level until you’ve gone far enough in the game to pause or exit.
Everything in life is a video game, most of all, money. This mental model makes it easier to win, because we can all play and win video games.
Here are the levels of the money video game.
Level 1 — A single-income job
We all start here. There’s no shame so ignore the gurus.
You get a job. They offer health benefits, a fixed amount of money each month, and possible career paths that may slightly increase your income over time.
This is a good option. You learn a lot working for someone else. You build your network. You may even gain some basic leadership skills.
Use the job for your benefit, just don’t let it use you.
The key to this money game is not letting your job take up all your time. Otherwise, you’ll have no time to progress up to higher levels in the money game (where true freedom is found).
Level 2 — A job + a side hustle
Quitting your job to climb the money ladder faster is a bad idea.
You don’t know what you don’t know. You don’t have data or an understanding of your ideal customer.
Smart people create a side hustle and work on it part-time after hours. They use this experiment to gather evidence and figure out another way to earn a full-time income. The side hustle is done mostly for free at the start.
The point is to learn not earn.
Level 3 — Investing in financial assets
Before getting to this level you want to use the income from a job to build an emergency fund. This helps you sleep at night.
If I had to put a number on it, I’d say $50,000.
Once you have this foundational pillar, it’s time to use any leftover money to invest. Notice how I didn’t say save? Saving money is a bad idea because inflation and currency devaluation destroy the value you’ve earned.
To progress to level three of the money game, I suggest you get a basic financial education. Nothing fancy. Read the most popular finance books and perhaps learn on a platform like Real Vision.
Once you know the basics then figure out your asset allocation. This is a fancy way of saying the percentage of money you invest into stocks, bonds, real estate, gold, and crypto.
Then all you do is invest into these assets on auto-pilot, and do everything you can not to interrupt the power of compounding.
Financial assets are how you can accumulate enormous wealth in 5 years.
Level 4 — Contracting/Freelancing
Working a job is fine but you typically own nothing.
Yes, you may get stock options, but many times these can be worthless or cleverly stolen or devalued in an IPO. Use your 9–5 skills to start contracting and freelancing, instead.
It gives you a taste of what it’s like to be an owner and the basic skills you’ll need to progress up to the higher levels of the money video game later. This option is typically done alone. There are no employees.
Ultimately the point is to start part-time, then do it full-time. The downside is you lose the security of benefits, the upside is you get to charge more money and be paid for outcomes instead of how many hours you work.
Outcomes = Huge Paydays
Level 5 — Multiple streams of income
It’s fine to start with one income.
But all the recent layoffs have shown us yet again that a salary can be cut off at a moment’s notice. Company loyalty doesn’t exist and you can’t trust any company to “take care of you” like they are “your family.”
Multiple streams of income are an insurance policy.
Figure out 3–4 ways to get an income and stack them so you can stress less. If one income dies then it’s fine because you have multiple to fall back on.
Level 6 — A sneaky online business
An online business sounds similar to contracting/freelancing.
Not quite. An online business is more serious. You typically use automation to run it. You likely have digital products that run on auto-pilot.
It’s more sophisticated and built on a foundation of social media content and your own email list, whereas a freelancer or contractor can just get 1–2 monthly customers from their existing network with zero social media.
Over time this money game can make you extremely wealthy. It has the power of network effects, leverage, and compound growth all baked in.
Level 7 — Turn active income into passive income
At some point you want to do less donkey work (aka admin), and start focusing more on what matters.
Active income requires your time to keep generating it. Passive income is where past work continues to earn you money without investing more time. It sounds sexy and cool, and it is. But it’s harder than it looks.
This is where automation, email marketing, and virtual assistants help. Once you have proven formulas for making money, it’s about documenting and scaling them.
The internet is excellent at generating passive income. It’s why I say start an “online business” not “a business.”
Once you earn money while you sleep life gets a whole lot easier. When and how much you work becomes optional.
Level 8 — Hire employees with empty stomachs
Employees don’t survive unless you survive.
Hiring people is one of the most basic forms of leverage. Employees are fine but they need to be led. And humans can be a pain in the ass, which is why this option comes much later in the money game.
If you can’t manage yourself and make 6-figures a year, you definitely can’t manage employees and make more. One step at a time.
Employees have families to feed. It’s a big responsibility. It’s one reason why solopreneurship is so powerful. But the downside is it can become a full-time job and turn into 12-hour work days if you set it up wrong.
Level 9 — Save on taxes
By now you’re likely making decent money. Either 6 figures a year or possibly even 7 figures.
This is the point where you figure out a large portion of your wealth goes to taxes. We all have to pay our taxes … but most of us don’t optimize our taxes. We pay more than we legally need to.
Wealthy people optimize taxes so they can invest more of their money into financial assets and pay taxes later. One way to think of it is you pay less taxes in the short term, then use the savings to invest in assets.
Later on, you still pay the same amount of tax, but you’ve effectively used someone else’s money to bankroll your investing habit. This option requires a kickass accountant, so do your research and find one.
Level 10 — Protect assets with a trust
You can make millions of dollars but you can also lose the lot.
Just ask- dumb-dumb Tim Denning who had $1.2M stolen from him in a day. Yep. True wealth needs to be protected from thieves, leeches, and random lawsuits that find their way into your Gmail inbox.
This level of the game is where you set up protection.
You operate using businesses (LLCs) and place assets into trusts where they can’t be touched by strangers. Again, it requires professional help but has a 3–10X return on your investment.
Level 11 — Fame and influence
As money piles up it gives you the opportunity to grow your reputation online. And if you’ve made some decent money people will want to know how. You may even be considered a leader or person to learn from.
Many wealthy people even use their money to hire personal brand consultants or ghostwriters to post content for them on social media.
Or if you have an online business, by this point, you’ll likely have lots of followers. With this influence comes new responsibility.
But it also comes with enormous power and boosts your ego. It has a lot of personal fulfillment too.
Level 12 — Exit the attention economy and choose privacy
Wait, what?
Yep. Fame is a nightmare. True wealth is when nobody knows who you are and you have enough money to do whatever you want without being told what to do by anyone or any organization.
Many people learn this lesson too late. They get trapped by fame and attention and it ruins their life. Once you become known, it’s hard to become unknown again.
Being recognized feels good for about 30 seconds until it becomes an inhibitor of happiness. Eventually, too much attention makes you a magnet for “can I have free advice?” and “just one question sir” while on holidays with your family in Hawaii.
Privacy = Wealth
Level 13 — Give most of your money to charity
Wait, what, what, what?!!!
“I did all this work and now I’m gonna give it all away?”
Hell yes. This is the last level of the financial game. It’s a level many of us never get to, but knowing it exists helps us not make errors earlier in the money game.
Many billionaires like Warren Buffet are part of a charitable campaign called “The Giving Pledge.” It’s where billionaires give most of their money away to good causes.
What billionaires know is, after a certain point, too much money isn’t useful. If someone tells you money is evil, they clearly have never given money away to a good cause.
One of the best things I ever did was send money to Africa to help build schools. It feels better than any stupid Lambo or mansion ever will.
Master the money video game so you can get wealthy and help causes you care about, that amplify the meaning of your life. That’s what the money video game can bizarrely teach you.
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.
