Here’s the hard truth: far more people lose in the stock market than win. It’s not built in a way for the average Joe to strike it rich. People often find out that when it comes to the stock market and the 401(k), it’s not the best way to build life savings or retirement money. Yet, the vast majority of Americans are tied up in the marketing mystique of the 401(k). Why? Two reasons—people want to put their trust in someone else to help them save and most people spend more time planning a vacation than planning for retirement.
For the most part your 401 (k) is a collection of mutual funds—a basket of stocks managed by an administration. When you start to do the math and subtract the fees, it’s scary to realize that you may have better odds buying lottery tickets than investing to make big money. The odds on Wall Street are always stacked against the average investor—unless you’re lucky. You’re taking a massive risk with a no guarantees for the return you’re expecting.
If we’re telling you that the way most people advise you to make money is completely wrong, we need to tell you a better way to make money, right? Here it is: think and act differently than everyone else. Start by taking this advice from the Simple Economist:
- Know the odds. Few people invest the time in their own financial education. Even small amounts of effort to learn financial strategies can lead to exceptionally large dividends. Take time to learn how a few changes in how you build wealth can increase you odds of retiring rich.
- Don’t put all your eggs in one basket. Because of the inherent risk in the market, it’s extremely difficult to get true diversity in your market investments. The best way to go is to have some tangible investments; as in hard, real, personal property to offset stocks, bonds, and mutual funds.
- Create your own luck. You’ve heard over and over that it takes most people 20 years to become an overnight success. There’s something to be said for creating a plan, instead of depending on that lucky shot at the end to win the game. Consider generating stable, passive income beyond dividends through something like real estate. Even with the dip we experienced in the recession, real estate and rental properties are a safe and steady way to create passive income and equity over time.
- Be persistent. Persistence is often underrated. Once you have established the odds and identified challenges to your goal, simply sticking with it is incredibly important. Often, results take time and “life savings” does not happen overnight.
- Practice patience. Our time frame is often different from reality. Being patient is integral to success. While you watch your wealth grow, enjoy the inconsistencies and perfect timing you’ll experience. Try and embrace the unknown.
Knowing the odds and stacking the odds in your favor, coupled with persistence and patience, give you an almost unfair advantage in life.
We have so much more to share with you about building, growing, and sustaining wealth. In their very first podcast episode of Strange Money, Nick Jensen and Will Street discuss the stock market and how the average person has the odds stacked against them. They’ll also discuss why they have such a deep distrust for the stock market and the 401(k)! Listen Now!
We always recommend growing your retirement wealth outside of Wall Street in a time-tested method that has proven to yield similar or better results than the market. It’s called the Perpetual Wealth Strategy, and it’s the perfect way to build, access, maintain, and pass on your wealth throughout your life; a game where everyone wins.
We invite you to take 2 minutes to sign up for a FREE, extensive eCourse called Infinite 101®. You’ll receive access to video tutorials, articles, and podcasts. It literally costs you nothing to become educated on this ideal financial strategy and start building wealth.
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