Hi, it’s Dan Witherington from American Wealth Builders.
Everywhere you turn you see the same ads.
Whether internet, TV, newspaper, or anywhere else, the messages are always there: “Invest With XYZ Financial Brokerage And Finally Take Control Of Your Retirement.”
The ads always show an older couple walking hand-in-hand on a tropical beach.
It drives me crazy because it feels to me like false advertising.
It’s as if a casino advertises, “Gamble With XYZ Casino And Finally Win Big” while a picture of some guy sits around with stacks of money. << that would not pass any advertising laws
The reason why I think the financial world’s advertising is mostly false (or, at the very least, misleading) is because they’re showing you the ideal outcome… and we know from the 10,000 people retiring daily that the ideal outcome is not the average outcome.
We also know from experience that “finally taking control of your retirement” does not actually mean “making enough money to retire.” They just say that to get around the rules.
Problem is: when you hear the same message over and over and over and over again, you tend to believe it.
And now, people are BOUGHT IN, in a big, big way to the notion of investing in the stock market for retirement.
Look, maybe you’re a stock investing genius, or you’ve got a great mutual fund that provides solid returns. Awesome. I’m certainly NOT advising anyone to sell.
But if you’re earning a decent return in your stock/fund portfolio, you are in the minority.
The numbers vary from one source to the next on actual returns so let’s look at a couple of them:
This article says that from 1928 to 2014, the average annual return on the S&P 500 is 10%.
This article summarizes a few points of data and reports that Warren Buffett says buy and hold investors (who invest in the right things) can probably expect 7% ROI.
This article says average investors are lucky to get 4-5%.
This article from Forbes, which I’ve received some considerable flak for posting in the past, reports: “…the average investor in a blend of equities and fixed-income mutual funds has garnered only a 2.6% net annualized rate of return for the 10-year time period ending Dec. 31, 2013. The same average investor hasn’t fared any better over longer time frames. The 20-year annualized return comes in at 2.5%, while the 30-year annualized rate is just 1.9%.”
These are serious numbers. I remember way back in the day when financial advisors said, “you can expect a 12% to 15% return on your funds” but those days are long, long gone.
The new reality is this: the numbers hint at much MUCH lower returns.
And again, maybe you’re an investing rock star and you’re telling me that the stock market over its history has returned 10%, 11%, 12% for investors. Fine. But most investors aren’t you, and most investors aren’t invested in the stock market for its entire history.
The reality is: many people invested today have lived through some boom times but also many catastrophic busts – in 2001 and 2008 especially… and that’s just the buy-and-hold investors. It’s even worse for the emotionally-driven investors who buy and sell to chase a dream.
And here’s why I’m so passionate about this problem: it’s building your portfolio on a basis of HOPE. You hope that you guessed correctly. You HOPE that you’re right. You HOPE that the executives of the companies you’ve invested in don’t do anything stupid. You HOPE that the market doesn’t turn against your company or start a rumor about its decline.
And if you build a portfolio on hope, do you know where you’ll end up?
Exactly where thousands of people are ending up daily: they have an inadequate portfolio that will not fund their retirement.
The problem is: investments that underperform now may not always underperform… but they have to dramatically over-perform in order to “catch you up” to where you would have been if they had performed to expectations.
So if you want to keep your money in your amazing portfolio, fine. I get it.
And if you want to keep your money in your underperforming, find. I feel badly for you but I understand why you’re doing it.
But me? And my family and friends? I can’t think of a better way to invest for retirement (and for today) than turnkey real estate.
- It’s a cash flowing investment, which means you start seeing returns right away.
- It’s a hard asset that protects you and preserves your capital from inflation and economic fluctuations.
- The affordable investment allows you to create significant returns sooner than you think.
- You can invest inside your IRA or outside of it.
- You can retire sooner that you realize.
- There’s a ton of control and no need for hope.
If you are sick of your underperforming investments and don’t want to fund your retirement with hope then call us here at American Wealth Builders and we’ll see how a turnkey property can fit inside your retirement plan.
Senior Wealth Strategist
American Wealth Builders
- Protestors And Profits - January 30, 2017
- Urban Myths Of Real Estate Investing - December 31, 2016
- Why Investors Are Leaving Mutual Funds For Real Estate - December 24, 2016
- Stop! Read This Before You Make Another Real Estate Investment - December 17, 2016
- A Better Retirement Strategy Than You See On TV - December 9, 2016