On this episode of The Impatient Investor, Andrew explains that the key to building wealth is an age-old formula requiring equal parts income, appreciation, and tangibility. It is best to team up with your peers and true experts who understand these vital components.
“Putting your money in an S &P 500 index fund and forgetting about it will almost guarantee you higher returns than relying on a finance professional. The S & P 500 beats financial professionals, including advisors and mutual funds 92.2% of the time.”
FULL TRANSCRIPTION:
If you ask a barber if you need a haircut or a golf pro if there’s anything wrong with your golf swing, you’re likely not going to get an objective answer. Of course, a barber’s going to tell you that you need a haircut, and a golf pro will pick apart your golf swing. That’s how they make money. You can’t blame them for wanting to make a living, but they’re not always going to have your best interests in mind.
The same goes for financial planners, so-called financial experts. Have you noticed that many experts are simply fee-based salespeople, most financial planners, advisors, wealth managers, professional managers, brokers, etc., are paid fees, regardless of whether you make money. Even those who cater to the ultra-wealthy or manage family offices receive asset management fees based on the total funds under management. Like the barber and the golf pro, financial planners, don’t always have your best interest in mind. The only financial planning they’re going to do is their own. And unlike the barber and golf pro, financial advisors aren’t very good at what they do. They’re not even experts at what they’re putting themselves out to be.
And here’s something shocking. Most financial planners are lousy at building wealth. Here’s proof. Putting your money in an S &P 500 index fund and forgetting about it will almost guarantee you higher returns than relying on a finance professional, the S & P 500 beats financial professionals, including advisors and mutual funds 92.2% of the time. You’re better off investing on your own and investing in an S & P 500 index fund.
Here’s what I discovered in building wealth. Be sure to work with your peer groups and experts in their field. Let’s talk about peer group colleagues, working with someone on the same level as you or higher results in growth, rather than relying on someone earning substantially less than you. Peers understand your goals, lifestyle, risk tolerances, and motivations because they have the same ones. Your peers can offer useful advice and share experiences that would help you on the road to wealth. They have nothing to gain and are happy to share their personal experiences, including their successes, and also their pitfalls.
Interacting with peers on your level or higher can mean the difference between lethargic growth and exponential growth that changes your entire outlook on the road to building wealth. Let’s look at the experts. Those who can’t teach is a popular phrase. Would you rather learn how to navigate your 42-foot Boston Whaler by someone that is only captained a 12-foot Zodiac inflatable? If someone is so successful at building wealth, why do they charge fees to teach it? Wouldn’t they be far more wealthy utilizing their so-called ultra-successful strategies full-time rather advising others? So why would you rely on others that have never built passive income or true wealth to guide you to do the same?
If you’re willing to spend money for financial advice from fee-based experts who aren’t experts, find a financial planner at a local Edward Jones branch, you don’t see Warren Buffet doing any fee-based consulting. He’s too busy building and preserving his wealth. Experts in their field and geographic locations have information advantages that can’t be bought or faked. If you want to build true wealth and passive income partner up with others in your peer group and experts in their field or geographic locations. The goal of your peers and these experts isn’t to take anything from you. Their goal is to take you on a ride with them. By teaming up with members in your peer group with other true experts, you can be assured that your investment objectives, motivations and risk tolerances will be in alignment.
The key to building wealth is an age-old formula requiring equal parts income, appreciation, and tangibility. Teaming up with your peers and true experts who understand the vital components can mean the difference between stagnant growth and exponential growth that will carry you to your destination of multi-generational wealth. I think if there’s anything that 2020 has taught us it is that you need multiple streams of income. If you’re interested in learning more, go to www.stoptradinghours.com.
