Hello, Human Guide

Today, we will talk about these stories:

“If I hear bad news about the stock market one more time, I’m gonna be sick.”

We get it. Investors are rattled, costs keep rising, and the world keeps getting weirder.

So, who’s better at handling their money than the uber-rich?

Have 3 long-term investing tips UBS (Swiss bank) shared for shaky times:

The catch? Most alternatives aren’t open to everyday investors

That’s why Masterworks exists: 70,000+ members invest in shares of something that’s appreciated more overall than the S&P 500 over 30 years without moving in lockstep with it.*

Contemporary and post war art by legends like Banksy, Basquiat, and more.

Sounds crazy, but it’s real. One way to help reclaim control this week:

Skip waitlist.

_{*Past performance is not indicative of future returns. Investing involves risk. Reg A disclosures: masterworks.com/cd}

The dream is dead. A six-figure salary used to be the gold standard for financial success. Today, it barely keeps you in the game.

A new Harris Poll survey found that one in three six-figure earners describe themselves as financially distressed. Two in three say that earning over $100,000 is no longer a sign of wealth. For many high earners, it is simply a marker of survival.

The data reveals a troubling trend. Three-quarters of high earners have recently used credit cards because they ran out of cash. More than half say they would need to double their income to feel financially secure. Some have sold personal items, cut back on medical care, and even skipped meals to make ends meet.

The culprit is a potent cocktail of inflation and lifestyle creep. Prices are up at least 24% since the start of 2020. A $100,000 salary in 2005 would require an income of $170,000 today just to have the same purchasing power.

As Libby Rodney, Chief Strategy Officer at The Harris Poll, puts it: "People used to feel when you got to six figures or above that it was a sign of financial stability. And now we just see that as a sign of surviving, and being in survival mode."

This feeling is especially acute in major cities. In 25 of the 100 largest U.S. metro areas, the average monthly spending on basic necessities for a family of three now exceeds a $100,000 annual income. The dream of a comfortable life on a high salary is fading. For most, a salary alone is a treadmill, not a path to wealth.

The gap between earning a high income and building real wealth has never been wider. While many high earners are living paycheck to paycheck, the ultra-wealthy are pulling away at an unprecedented rate.

According to the Federal Reserve, the top 1% of U.S. households now hold over 30% of the country's wealth. That is a staggering $49.2 trillion. Since 1989, the richest 1% of U.S. households have gained nearly 1,000 times more wealth than the bottom 20% combined.

It is a stark reminder that income and wealth are two very different things. Income is what you earn. Wealth is what you own. And the wealthy own assets that grow faster than salaries.

This disparity is driven by how different groups invest. While the average person's wealth is tied up in their home and retirement accounts, the rich have a different playbook. They put their money to work in assets that are often inaccessible to the general public, creating a cycle of growth that salaries simply cannot match.

So what is the secret? The answer lies in alternative investments.

While the average investor has almost no exposure to alternatives, the ultra-wealthy allocate around 20% of their portfolios to them. For high-net-worth family offices, that number jumps to a remarkable 42%. These are not your typical stocks and bonds. We are talking about private equity, venture capital, real estate, and even fine art.

According to a survey from global investing firm KKR, high-net-worth investors allocated 28% of their assets to alternative investments in 2022, representing a 2% increase from 2020. Family offices now hold more in alternatives than they do in equities.

These assets offer something crucial: the potential for returns that are not correlated with the volatile stock market. By diversifying into assets that move independently, the wealthy protect their downside and capture growth wherever it occurs. In fact, 69% of ultra-high-net-worth investors are satisfied with the performance of their alternative investments.

This strategy is a key reason why the rich get richer. While the S&P 500 is a powerful engine for growth, it is also prone to unpredictable swings. The wealthy have learned to build portfolios that weather any storm.

The message is clear. In today's economy, a high salary is not a guarantee of financial freedom.

Building real, lasting wealth requires a shift in mindset. It is not just about earning more. It is about owning assets that grow. The ultra-wealthy understand this. They allocate significant portions of their portfolios to alternative investments that the average person never considers.

The good news is that access to these opportunities is expanding. Platforms are emerging that allow everyday investors to participate in asset classes that were once reserved for the elite.

The companies that understand this shift will attract the best talent. The individuals who understand it will build the most wealth. The ones still relying solely on their salary will watch both pass them by.