US Statistics
- Median Family Income: $79,900
- Ave. Home Value (According to Zillow as of Sept. 2021): $303,288
- % of Adults 25 years + who completed high school: 90%
- % of Adults 25 years + with a Bachelor’s degree: 30%
- 20-Year Ave. Annual Return of Retail Investor (factoring inflation of 3%) : -.1%
- % of Investment Professionals who Fail to Beat the Market (15-Years): 90%
- % of Americans unprepared for Retirement: 64%
- % of Americans with 401(k)s unprepared for Retirement: 48%
Let’s be honest. It doesn’t take much effort to be average. Like many Americans, if you just go along with the crowd and sleepwalk through high school and go to a couple years of college – even obtain a Bachelor’s degree – you can expect an average annual income of around $80k and live in a house valued at around $300k. This is fine for the average American, but are you satisfied with average?
The problem with average is the average American will not be prepared for retirement. In fact, 64% will be unprepared and a 401(k) gives you little advantage as 48% of Americans with 401(k)s are unprepared for retirement. Just because 65% of Americans are unprepared for retirement, don’t make the mistake of assuming that the other 35% will be living their best lives during retirement. Most of the 35% will just be getting by.
The truth is, only a very small percentage of Americans will be living their best lives during their retirement. Chances are, many of these select few had already been retired for many years before they reached the normal retirement age.
What did they do differently?
“Enter in by the narrow gate; for wide is the gate and broad is the way
that leads to destruction, and many are those who enter in by it.”
–Matthew 7:13
Broad is the way that leads to economic destruction and many are those who follow it.
There is an easy explanation for wealth distribution and it has nothing to do with one group exploiting or oppressing the other. It’s simple. The rich choose a different path. They don’t take the easy path that everyone else is on. They will always choose to do what the masses are not willing to do – no matter how difficult or challenging or how much ridicule they catch from their family, friends and colleagues. They take the narrow path versus the wide path because they know that the narrow path is the only way to avoid the fate of those who take the broad, easy path – the one that leads to financial disappointment.
What can taking the narrow path mean for investors? Judging by those who have already taken the path, it can mean:
- Financial independence.
- Cutting the cord from the time clock.
- Setting your own agenda.
- Dedicating your time to yourself, family and community instead of a nameless, faceless corporation.
- Having your money work for you 24-7.
- Having your money work beyond your own lifetime – for your children and their children and so on.
Taking the narrow path is not easy. As I mentioned above, you can put life on auto-pilot and live an average life. Nobody will question your choice since most people are on the same path. Going against this grain will take a particular mindset.
So what traits, habits and characteristics do you need to adopt to take and continue on the narrow path?
- Counter-Intuitive Mindset. Adopt a counter-intuitive mindset. When everyone is rushing into meme stocks and crypto, resist the urge to go along with the crowd. Mob behavior has never served the mobs well before. There are numerous examples of the herd going over the cliff like during the dotcom bubble and mortgage-backed securities debacle.
- Courage. The first step is to question everything society has taught you about how you should live your life and how you should handle your investments and finance. Realize there is a different path – an alternative path for lack of a better word. Ignore the broad Wall Street path. Seek out the narrow, private path paved with passive income alternatives like real estate and private company investing (private equity). Seek out those who have successfully navigated this path. Seek out blogs, books, and articles and soak up knowledge. Network online and in person to connect with other like-minded individuals and individuals who have experience investing against the grain.
- Confidence. Once you’ve demonstrated the courage to seek out something different and to choose the narrow path, be confident and resolute in your path. Be confident in the game plan. Be confident that it’s worked before and will continue to work.
- Patience and Perseverance. So far, you’ve demonstrated the courage to choose a different path and the confidence in the plan. This is where patience and perseverance comes in. The narrow path requires a long-term perspective. Financial salvation is not around the corner and does not appear in a matter of days or weeks. Real estate and private equity take time for the business plan to germinate, develop and grow. It may be one or two years before you begin to see fruit. Be patient and resist the urge to stray from the path.
- Focused. The temptation for many investors is that once they taste a little success, they start to lose focus. They start to go outside of their knowledge base and consider anything and everything presented to them. Don’t lose focus of your core investing principles. Remember cash-flow, appreciation, tax benefits and tangible assets. Don’t get overconfident.
- Reserved. Conduct yourself with quiet confidence. Many will question your judgment but don’t feel the need to explain yourself to everyone. Don’t cast your pearls before swine.
Conclusion
The narrow path will require courage to buck the crowd but the rewards can be immeasurable. How do you value more time with your family and the freedom from the pressures of performing at work? The narrow path has never been easy but fortunately there have been numerous trail blazers who have successfully navigated the road less traveled – many of whom are happy to guide others and share with them their wisdom. It’s up to you to take the first step.
