The S-tier examples given in the video are owning your own business, equity in high-growth companies, and scalable digital assets.
This video ranks common assets people invest in, from F-tier (worst) to S-tier (best), based on statistical returns and risk. The video uses a $100,000 investment scenario to illustrate potential outcomes for each asset tier. It emphasizes that this is not financial advice but rather a data-driven analysis.
B-tier assets (like index funds and dividend-paying stocks) Advantages: Reliable, consistent compounding; relatively low management effort (especially index funds); accessible to average investors. Disadvantages: Slower growth potential compared to higher-tier assets; dividend stocks may have slower growth than reinvestment-heavy companies.
A-tier assets (private equity, franchises, and commercial real estate) are categorized as such because they are proven wealth-building vehicles offering substantial returns. However, they demand significant capital, expertise, and/or time commitment. Entry Barriers: Private equity requires significant investment (often $250,000 or more) and a long lock-up period; franchises necessitate substantial upfront costs ($500,000 - $1 million+) and competitive selection processes; commercial real estate involves high initial investment costs ($1 million+) and lender requirements for significant equity.
The video provides the following elaboration and examples for S-tier assets:
Owning your own business: The video highlights that over 70% of millionaires are entrepreneurs. A profitable business provides income through cash flow and potential sale at a multiple of earnings. An example given is a small sauce company making $500,000 profit annually, potentially selling for 2-5 million.
Equity in high-growth companies: Investing early in companies that become highly successful, like Tesla, Amazon, or Nvidia, can yield substantial returns. The video cites a hypothetical $10,000 investment in Amazon's 1997 IPO being worth over $1.6 million today. This is presented as a rare opportunity, but one that creates generational wealth when successful.
Scalable digital assets: The creator economy is used as an example. Top creators can earn millions annually. The scalability of digital assets is what allows them to achieve comparable returns to owning a business or equity. Specific examples of digital assets are not explicitly provided within this category.
