How the ultra-wealthy actually invest: four stages in order

Executive overview

Most people invest in stocks and real estate first. The top 0.1% treat financial assets as the last stage, not the first.

Wealth is built in sequence: physical foundation, then skills, then business reinvestment, then financial assets. Skipping stages produces poor returns.

Financial assets don't make you rich — they keep you rich. The business is the wealth engine.

Stage 1: invest in your foundation

• Physical and mental health is the baseline — without it, every other investment underperforms
• Pay for an expensive gym: it forces prioritisation and puts you around high-net-worth peers
• Sleep, nutrition, and fitness directly affect cognitive output

Stage 2: invest in your skills and knowledge

• Highest ROI investment: pay for compressed expertise — courses, coaches, books
• Just-in-time learning: read and study for problems you need to solve now, not "just in case"
• Build a Centurion Council — 100 mentors list: 25 authors, 25 operators, 25 coaches, 25 peers one to two years ahead
• To connect with a mentor, use the PAC script: Proof (show you applied their work), Ask (one tight question), Close (respect their time, wrap up)
• Email authors whose books impacted you — most write back; relationships follow
• Top two investment categories: coaches and books

Stage 3: invest in your business

• The top 0.1% don't guess — they buy speed and reinvest in the machine that multiplies cash
• Upgrade gear first: slow tools destroy leverage (nail gun vs. hand-nailing analogy)
• Pay for playbooks and shortcuts instead of trial and error
• Hire coaches and consultants not just for the CEO — push specialised expertise down to department leaders
• Build masterminds for your leaders: proximity equals acceleration
• Apply the buyback principle: hire people to buy back your time, not just to grow headcount
• Quarterly reinvestment framework: set aside 20–30% of profit, redeploy into the binding constraint — marketing, sales, or delivery
• Use the theory of constraints (TOC) to identify where to reinvest
• Move idle cash to a holding company; invest from there; liquidate back when needed
• Most entrepreneurs get a 50%+ return reinvesting in their own business versus index funds

Stage 4: invest in financial assets

• Only reached after completing stages 1–3
• Financial assets compound quietly so you can focus on growing the business
• Safe long-term vehicles: S&P 500 index funds, REITs
• Keep it simple — this is a safety net, not a wealth engine
• Stick to your domain: don't invest in asset classes you don't understand
• Buy, borrow, die strategy: buy stocks and never sell; borrow against the portfolio tax-free; life insurance repays the loan at death — stock transfers to heirs without triggering capital gains

Allocation framework

• 10% into long-term index funds (builds collateral base for loans and leverage)
• 10% to charity (tithing)
• Remaining surplus: reinvest in yourself first, then your team, then the people around you
• If you have capital and haven't invested in coaching or courses, do that before anything else