6 Levels Of The Money Ladder And How They Effect Your Business | Ep 832
episodePreviously titled “6 Levels Of The Money Ladder And How They Effect Your Business | Ep 856” — renamed by the publisher on Aug 2, 2026
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What are the six levels of the money ladder?
The wealth or money ladder. There's six levels to this and I'm going to break it down. This fundamentally changed how I saw, how I priced my payment terms and fundamentally how I saw money flowing through a business. Welcome back to the game. I have an old concept that has reemerged. This is something that I thought a lot about in the year that Layla and I were selling Gym Launch.
How does money flow within the economy?
And it's basically just how the flow of money is prioritized. And so I think if there were like a wealth principle or like a woo-woo idea that I have ever subscribed to, this would be it. I don't really know what would make it woo-woo, but wealth principle certainly has that ring. But it's actually that there's some mechanics behind how money flows within the economy. And the privileges that certain types of businesses or agreements set in motion cause a disproportionate amount of money to stick to those entities that follow this structure. And so I see this more as a continuum than I do a specific rule. And I'll break it down. But it's basically the relationship between payment and work. There are kind of six varying degrees along this continuum that I've kind of identified. I have noticed that as I have become wealthier, I've moved up kind of the continuum here towards the ultimate extreme. Let me take this out of the theoretical and put it into the actual or real life.
So at the lowest end of this continuum, you would have somebody who works now, takes on tremendous personal risk and gets paid later. All right. Now, normally you'd think, oh, wait, isn't that, you know, the results of like, isn't that, you know, delayed gratification? Well, not when it comes to the flow of money within an economy. And so I'll kind of explain.
What is the role of employees in the money ladder?
And so what's the word for somebody who falls into this category of rules? Well, the answer is an employee, right? They will front, you know, two weeks of work, sometimes a month of work. They'll work up front and then they'll get paid later. Right. And that's a pretty standard agreement that's existed for a very long time.
How do independent contractors differ from employees?
As I walk up this ladder, think about both of those variables, the payment and the work, and you'll see how they shift. And obviously the goal or the ideal is to go as high up the ladder as you can. And so the level above that would be an independent contractor. So this is somebody who functions like an employee. They do work and they get paid. But sometimes the nature of the payment and the timing of that payment can be altered. And so, you know, a common setup might be half now, half later. Right. And so you can see how how this works. So they get paid half now. They work and then they complete work and they get paid the other half. And so it's a little bit more smoothed out. compared to the employee situation.
What advantages do in-demand professionals have?
Now, that would be the second lowest on our rung of wealth. Ah, the plot thickens. And so what are these remaining tiles above this? So above that, I would consider the in-demand professional. And so what happens in this situation? So this would be a specialist of some sort, or you go to a heart surgeon, or you just go to a doctor in general, whatever. You pay first. And then they do services. And sometimes, depending on the leverage, you pay now and get services later. You know, if you have a surgery, just to use that to keep that example going, you might pay today and your surgery might be for three months, you know, from now. And so from a cash perspective, that business's advantage compared to one where they have to, you know, work first and get paid after.
How do banks operate in the money ladder?
So we're plotting along here. Now, hopefully the goal isn't to really think, oh, I need to jump to this next rung. It's more like, how can I alter how I ask for money within the business that I exist or the services that I sell so that I can... make my money flow more advantageous and ideally have more of that money stick to me within the economy. So now we go what I call above the line. So those are kind of like the three levels as I see it for an individual. Right. But as you go up the ladder, you have the leverage of organizations. Right. And so I would say the the level above that is banks. So let me let's play it out. So a bank gets paid immediately, and they always get paid first. Meaning, there's something called a capital stack.
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Chapters
8 chapters
1
What are the six levels of the money ladder?
0:00–0:29
2
How does money flow within the economy?
0:29–2:02
3
What is the role of employees in the money ladder?
2:02–2:22
4
How do independent contractors differ from employees?
2:22–3:02
5
What advantages do in-demand professionals have?
3:02–3:52
6
How do banks operate in the money ladder?
3:52–4:46
7
What unique benefits do insurance companies provide?
4:46–5:27
8
Why do old businesses like banks and insurance thrive?
5:27–13:26