The 3 Tiers of Wealth: Where Should YOU Be Investing?

Dear Investor,

With another election cycle approaching, it's vital to know how the results can impact your net worth and your family's future.

This is why many wealthy investors are now publicly endorsing presidential candidates.

They know that presidential policies can greatly affect their investments and businesses.

Understanding Investment Habits

To navigate the financial landscape, you must know the investment habits of different economic classes.

The poor typically focus on covering expenses and maybe setting aside some savings.

Their financial strategy often doesn't extend beyond immediate needs and occasional luxuries.

The middle class tend to invest in liabilities like cars and boats, which don't generate income.

They often rely on wealth managers or retirement accounts. They hand control of their financial future to others.

The rich, however, invest in assets that generate passive income, such as apartment buildings or office complexes.

They don't work for money in the traditional sense; instead, their investments work for them, creating a continuous stream of income.

The Power of Self-Education

While formal education is important, self-education is the key to building real wealth.

It's a continuous process of learning from both successes and failures.

During economic downturns, it's particularly important to focus on learning and self-improvement.

This is when the most valuable lessons often present themselves.

Applying knowledge is more valuable than just gathering facts.

Self-education lowers your financial risk. It helps you make better investment decisions.

I learned 10x more with my mistakes than by reading books about the sectors I invested in.

I invite you to think through your wins and losses and really understand the lessons learned.

The Three Tiers of Wealth

Knowing where the wealthy store their money can help your investments.

There are three main tiers of wealth.

Primary Wealth includes natural resources such as land, oil, gold, timber, coal, and water.

These are the fundamental sources of value in the economy and represent the raw materials that drive economic activity.

Secondary Wealth consists of businesses that extract, process, and utilize primary resources.

For example, an oil company that extracts and refines crude oil would fall into this category.

Secondary wealth involves enterprises that directly engage with and add value to primary resources.

Tertiary Wealth includes paper assets like stocks, bonds, ETFs, derivatives, and even cash.

While these can be valuable, they're the furthest removed from the actual sources of wealth creation.

Most people invest mainly in tertiary wealth, via retirement accounts or mutual funds.

However, the truly wealthy tend to focus more on primary and secondary wealth.

By investing closer to the source of wealth creation, they maintain more control and often see greater returns.

To do that, you need to get into the game and look for the deals yourself.

Don’t trust any third-party advice without doing your due diligence.

If you don’t have time or resources yet to source yourself, look for companies that invest and allow you to participate.

Strategic Investment Approaches

As you consider your investment strategy, keep these points in mind.

1) Understand Where You're Investing

Be cautious about blindly turning your money over to wealth managers or financial advisors.

Ensure you understand exactly where your money is being invested and why.

2) Diversify Across All 3 Tiers

Consider diversifying your investments across all three tiers of wealth.

While stocks and bonds have their place, don't neglect primary and secondary wealth.

3) Study & Join Communities With Like-Minded Individuals

Educate yourself about different investment options, join the Investpreneurs Community.

Hosted by my team and I, our group shares the common goal of investing like the wealthy do.

Read books, attend seminars, and seek out mentors who have achieved the kind of financial success you aspire to.

4) News: Stay Informed and Ignore the Noise

Stay informed about political and economic trends. But, avoid reacting to short-term events.

Then, it's just a matter of developing a long-term investment strategy that aligns with your goals and risk tolerance.

Conclusion

In uncertain times and with an election near, you must take control of your finances.

Use this time to educate yourself and reassess your investment strategy.

Consider how to thrive, no matter the political outcomes.

The best investors see beyond current events. They profit from lasting economic trends.

Focus on self-education and learn the tiers of wealth.

Last, take a strategic approach to investing. This can help you build lasting wealth for your family.