Investing is NOT a System

He was selling or marketing a “system” to create retirement income using his specific product or model in real estate investing.

A “system” sounds great, doesn’t it? Wouldn’t it be nice if the risk and dynamic nature of investing could be boiled down into a simple, repeatable framework that removed any unexpected variables? 

Unfortunately, that’s not the world that we live in. 

There is no system. There is no easy button to be at the forefront of navigating your capital, of making your money work for you.

“What about index investing?”

Yes. You can dollar-cost-average into the market. That is the truest form of passive investing. But it also lacks any form of control. You are trading your ability to affect outcomes for the convenience and ease of the system. You are forced to take what the markets give you. 

The “Success” of Traditional Investing

Most people with 401(k)s or cash balance plans realize (often at the end of their careers) that even after “investing” with discipline for years or decades, they don't have much to show for it.

The average returns after years of market ups and downs depend on when you enter the market and when you exit. Timing is everything. This is a significant factor that most people don't discuss. 

The lost decade of the 1970s and the 2000-2010 decade are prime examples of periods in which it was possible for an investor to have very little return (or even negative returns when accounting for inflation) despite investing over a long period of time. When you get in and when you exit have a significant impact on your overall return potential. 

At the time, it is impossible to know whether that timing is working for you or against you. 

That doesn’t sound like much of a system to me. 

In my over 40 years of experience, I needed replacement income to best advocate for my freedom. Replacement income is what makes work or a job optional.

That’s the freedom we all want. Creating more options as soon as possible. I was able to make work optional about 20 years ago because I understood the investments I was investing in.

True Investment Success Requires Active Involvement

Yes, there is some active involvement. In fact, it was very active at the beginning when I was investing in real estate. 

I was searching for, buying, and negotiating for properties. I did the leasing and managed repairs. I was doing it all, but that's what you do when you're young and have more time than money. That's how you start building wealth.

In contrast, once you’ve built a profitable business or professional practice, your time value has increased immensely. You most likely have other things you'd like to do with your discretionary time besides chasing down tenants, toilets, and contractors.

You're looking for a different way. One that doesn’t involve so much of your time. Most want to look for an easy button, but there is no system or one quick way to invest successfully.

A system implies a level of certainty. In a business or an industry where something can be systematized, that's a positive.

Investing, on the other hand, is a very dynamic process. Unless you want mediocre results, you must spend time learning how money works and where, philosophically, you want to invest.

Only Invest in Things You Understand

How many people understand what's inside their 401(k)? Or their mutual fund? Or an annuity? I speak with doctors, very intelligent individuals, on a regular basis who have no clue how their investments actually work.

All they know is they have a certain amount of money invested here and there. It's what I call “spaghetti on the wall” investing. There's no orchestration to it.

One financial advisor said this. Another said that, etc, etc. Most doctors follow the traditional advice of saving money tax-deferred in a 401(k) or a cash balance plan. But there's no rhyme or reason as to where the money goes besides that some “expert” said to do it.

Let's face it. Everyone has something to sell. There's an incentive to sell what you have. There’s nothing wrong with this as long as you understand the incentive and the product.

Most advisors have fees or commissions attached to their services. I'm not denigrating that model, but that shows their incentive. Most financial advisors' models are Wall Street products. This means most advisors will sell to keep you in the market, even right before and during downturns.

I also have something to sell, but it’s not a product. I sell outcomes with no financial interest in the vehicles/investments used to achieve those desired outcomes. It means I’m not pushing people to invest in one thing over another. In fact, I am invested right alongside each of my members – Freedom Founders is how I orchestrate my own investments. 

The goal is to create transformation (permanent changes) in people's lives in Freedom Founders by providing guidance, education, and the opportunity for implementation.

How Much is Enough?

We all learn to make money through higher education. The more specialized and high-value the product or service we deliver, the more money we make.

We often create a good lifestyle from this, but it can quickly become a treadmill. The treadmill has to be replaced at some point, and the sooner, the better.

If you do it sooner, you can actually enjoy what you train to do much longer because you don't feel compelled and compressed to grind it out year after year. You don’t have to wonder, “Do I have enough?”

Most people don't have this answer, so they keep working and grinding and miss all the memories and opportunities when they're healthy and have their family around them.

Later in life, health dissipates. We lose friends and family, and it's too late. What was all the grinding for anyway?

Are You Heading in the Right Direction?

At Freedom Founders, we help change people's trajectories. This type of investing requires active involvement. It’s not a full-time job, nor is it anywhere near it. But that doesn’t mean it’s an easy button or system. 

What we teach is how to understand the market cycles. We show you the different ways to invest and protect yourself in real estate, perform your own due diligence in any investment, and form the relationships instrumental to your success while freeing up more of your time. How close are you to the investment and or the operators? What do you understand behind the curtain?

If you understand the fundamentals of vetting and underwriting where you're investing your money, you can mitigate much of the risk. Risk never goes away entirely, but you can significantly mitigate and achieve better returns than the average, mediocre, easy-button-system, dollar-cost-averaging into mutual funds or ETSs.

The game of “easy” investing is over. Now is the time to become educated in how money works and elevate your discernment about what investing pathway you choose as the steward of your future. 

If you're ready to step up to the plate to understand how money can work for you and how to get closer to your freedom, I invite you to take a step forward by scheduling a call with my team.

You are closer to your freedom than you think. Take a step at a time, but don't be the passive, head-in-the-sand, fingers crossed, hope for the best investor.