The 7 Levels of Investors, Which Are You?

“Reaching the end of a job interview, the Human Resources Officer asks a young engineer fresh out of MIT, "And what starting salary are you looking for?" The engineer replies, "In the region of $125,000 a year, depending on the benefits package." The interviewer inquires, "Well, what would you say to a package of five weeks vacation, 14 paid holidays, full medical and dental, company matching retirement fund to 50% of salary, and a company car leased every two years, say, a red Corvette?" The engineer sits up straight and says, "Wow! Are you kidding?" The interviewer replies, "Yeah, but you started it.”

There are 7 levels of investors. And a secret to wealth few people know: Your income has ZERO to do with your financial freedom. But more what you do with your money. Your net worth will be directly related to your Investor Level.

Read further to learn how to quickly climb the investor ladder, and see where you stack up vs. everyone else.

Level 0

These people have zero knowledge of investing. Don’t know or care about it. Say the word “invest” to them and you’ll be met with a slack jawed pause.

Level 1

They are typically known as the best borrowers and loved by Visa and MasterCard. All they do is borrow money and pay massive interest on it.

Level 2

Your savers. They know how to put a little aside every paycheck, then buy something with it months or years later. Sadly my own parents only rank here. There’s a pretty good chance yours do too, as they grew up with the scarcity mentality.

Level 3

The passive investor, they buy RSP’s and GIC’s. They make up 2/3 of the middle class. They’ll hire a financial planner and follow the stock market like sheep. Then squeal like pigs during the slaughter. (I know because I was one over a decade ago, and boy did I squeal in 2008). Tell them about making 25% return and they’re adamant it’s impossible. They whine about missed investment opportunities, and lose money 90% of the time speculating. They’re typically risk averse.

Level 4

This should be your minimum goal, the Automatic Investor. They have written goals, they don’t get fancy or buy complex vehicles. They invest a % of their income every month, and they don’t sell, ever. They can retire comfortably, but not spectacularly.

Level 5

The Active Investor (where I am myself) is characterized by investing principles and rules of investing they follow. They like to buy real estate, private companies, and own private shares in various ventures. They actively participate in the management of their investments, OPTIMIZE performance and MINIMIZE risk. Their return expectation is 20%-100% annually, and believe in spending money only from investment profits. Their mantra is, “My asset pays for my luxuries, not my income.”

Level 6

The final tier is the Capitalist. Very few human beings reach this level, these are your Rockefellers, your Carnegies, Gates’, and Buffets. Their ideal is to “be a good manager,” and their core belief is to “leave a legacy.”

Where do you rank in the seven levels? Do you need help graduating to the next level? Start by downloading my Free Book on How To Profit From Condo Investing.