BiggerPockets Money Podcast

Episode: How The Top 1% Actually Invest (Not What You Think)
Date: October 28, 2025
Hosts: Mindy Jensen, Scott Trench
Guest: Tad Fallows, co-founder of Long Angle

Overview

This episode delves into the real investment strategies and wealth-building paths of America's top 1%, challenging many myths about ultra-high net worth individuals. Mindy, Scott, and guest Tad Fallows (Long Angle) explore how the top 1% actually accumulate and manage their wealth, revealing what the affluent really do—contrasting with commonly regurgitated FIRE and mainstream personal finance advice.

Guest Introduction & Background

• Tad Fallows – Co-founder of Long Angle, entrepreneur, and investor.
  • Built and sold a medical research software business, growing it from scratch to 75 employees before selling.
  • Experienced abrupt wealth after the exit (95% of net worth concentrated in the company).
  • Founded Long Angle, a private digital community for high-achieving wealth creators, to share unbiased wealth advice among peers (01:11-05:41).

“I felt like all the good advice for that was kind of coming from Goldman Sachs or Credit Suisse… but I had a lot less confidence in whether that was truly unbiased advice.”
— Tad Fallows, (04:47)

Key Discussion Points & Insights

1. Paths to Wealth in the Top 1% (07:39-13:32)

• Entrepreneurship is the largest single driver but not the majority (∼40%).
• Members come from a wide array of industries, not just tech: e.g., t-shirt printing, fertility clinics, veterinary roll-ups.
• Other major paths:
  • Executive roles in finance/tech.
  • High-conviction, large investing bets in public equities or unique niche markets (ex: bitcoin arbitrage).
  • Some have backgrounds in “ordinary” jobs but had the courage and research to make outsized investment bets.
• Not all members come from prestigious backgrounds—many from state schools or the military.

“I had one nurse … did deep research on Tesla … took out a second mortgage … to buy deep out-of-the-money call options.”
— Tad Fallows, (10:18)

“People have had very good success by really focusing on a niche that gets less attention.”
— Tad Fallows, (08:23)

2. Education & Professional Pedigree: Does It Matter? (15:07-18:40)

• While overrepresented compared to the general population, Ivy League/elite college graduates are not the overwhelming majority.
• Only ∼5-10% of Long Angle community members went to Ivies.
• Elite jobs (consulting, tech, finance) matter for certain career tracks, but entrepreneurship and niche investing don’t care about formal pedigree after early career.
• Real-world performance and skill trump resumes after about 10 years into a career.

“I try and tell them... that is much less important than I thought it was at the time.”
— Tad Fallows, (15:53)

3. Sources and Structures of Wealth: Carried Interest & Equity (19:37-22:01)

• True “carried interest” (private equity/VC fees) is a small share (5-10%); most substantial wealth is from equity exposure—whether entrepreneurial, investment, or employee stock options.
• Salaries above $1M/year are rare outside professional sports or medicine. Most wealth comes from equity value creation.

“To get a really significant outcome there, it’s almost impossible to get that on a salary basis ... it is some form of equity.” — Tad Fallows, (20:49)

4. Investment Behaviors—How the 1% Invest

a. Portfolio Construction (29:24-32:27)

• High exposure to equities—especially index funds (S&P 500, total market), which comprise 50-60% of portfolios.
• Private market assets (private equity, venture, crypto) are common; real estate (often primary residence) features, but mostly without outsized leverage.
• Bonds are rare—often less than 5% of portfolios, as the 1% seek long-term compounding, not “de-worsification.”
• Self-management is the rule—even at >$10M net worth, most handle their own investments, avoiding 1% advisory fees.

“Most people with more than $10M at least in our community are managing their own portfolio.” — Tad Fallows, (30:55)

b. Portfolio Philosophy & Risk Appetite

• The ultra-wealthy accept volatility for higher long-term returns; they diversify among assets with high expected returns—not just “safe” ones.
• They keep little cash and very little debt (typically 10% debt-to-net worth, mostly mortgages).

“For every $100 of net worth they have, they only have about $10 of debt, and that’s typically just a 30-year fixed on their primary residence.” — Tad Fallows, (39:58)

c. Concentration and Big Bets (33:18-36:15)

• Wealth is typically made with concentrated conviction—whether owning a business, a standout investment, or niche trade.
• Once wealthy, there’s a shift to diversification but not the ultraconservative “half bonds” model.
• DIY/active “sweat equity” in due diligence and investment selection leads to higher returns outside mega-cap stocks/funds.

“If you look at the richest people in the world, [they are] super concentrated…”
— Tad Fallows, (33:39)

“Something like real estate kind of forces you to make a more concentrated bet and it forces you therefore to think about more deeply.”
— Tad Fallows, (34:38)

Notable Quotes & Memorable Moments

• On bias in professional advice:
  “Should you ask Barbara if you need a haircut? … Same thing, you know, should you ask a life insurance salesman if there’s really a place for whole life in that world?”
  — Tad Fallows, (04:57)

• On risk and reward:
  “The top 1% have seen firsthand that risk equals reward. So they’re willing, because they have the experience with risk working out, they’re willing to take calculated risks.”
  — Mindy Jensen, (44:08)

• On DIY wealth management:
  “It’s probably just who we associate with... but I just rarely come across people who have their money actively managed with like a traditional financial advisor.”
  — Scott Trench, (46:35)

• On stock picking vs. index funds:
  “Overwhelmingly people are believers in index funds. … that’s probably going to represent 50 to 60% of the typical portfolio.”
  — Tad Fallows, (29:43)

Segment Timestamps

| Segment | Timestamp | |------------------------------------------------------|------------| | Introduction/Guest Background | 00:00-05:51| | Long Angle & Need for Unbiased Advice | 05:51-06:41| | How the 1% Actually Get Wealthy | 07:39-13:32| | Investing Backgrounds (Degrees, Jobs) | 15:07-18:40| | Carried Interest & Equity Compensation | 19:37-22:01| | How the 1% Allocates Capital (Stocks, Private Equity)| 25:24-32:27| | Mental Models: Risk, Concentration, and Return | 32:27-36:15| | Diversification vs. Defensive Portfolios | 36:49-39:53| | Cash and Leverage Habits | 39:53-41:18| | Closing Insights & Takeaways | 41:18-47:17|

Takeaways for Listeners

• The top 1% often built their wealth by taking concentrated, knowledgeable risks—either in business, niche investments, or public equities.
• Ivy League degrees and elite jobs help, but aren’t required. Execution and conviction matter far more long-term.
• Once wealthy, most still DIY their investment management, with high index fund usage, low bond allocations, and minimal debt or cash.
• They prioritize assets with high expected returns and accept portfolio volatility—eschewing Wall Street's “de-worsification” gospel.
• “Staying rich” often means thoughtful, risk-acknowledging diversification among high-return asset classes—not shifting to “safe” ultra-conservative allocations.
• Access to unique deals and private investments increases with wealth, but the willingness to self-manage and accept risk persists.

For More

Check out Tad Fallows and Long Angle at longangle.com or connect with Tad on LinkedIn.

Summary compiled to reflect the candid insights and language of the hosts and guest, providing an actionable look at what separates the financial elite’s approach from conventional wisdom.