One smart thing Warren Buffet has said, “indexing is the smartest strategy for both you and me” (referring to Tony Robbins and the average, everyday human being).
“Dalbar revealed the gigantic discrepancy between the market’s returns and the returns that people actually achieve. For instance, the S&P 500 returned an average of 10.28% a year from 1985 to 2015. At this rate, your money doubles every seven years. Thanks to the power of compounding, you’d have made a killing just by owning an index fund that tracked the S&P 500 over those 30 years. Let’s say you’d invested $50,000 in 1985. How much would it have been worth by 2015? The answer: $941,613.61. That’s right. Almost a million bucks!”
But while the market returned 10.28% per year, Dalbar found that the average investor made only 3.66% a year over those three decades! At that rate, your money doubles only every 20 years. The result? Instead of that million-dollar windfall, you ended up with only $146,996.
What explains this massive performance gap? In part, it’s the disastrous effect of excessive management fees, outrageous brokerage commissions, and other hidden costs that we’ll discuss in chapter 3. These expenses are a constant drain on your returns—the equivalent of a merciless vampire sucking your blood each night while you’re asleep.”
When everything hit in 2008, most people probably withdrew all of their stocks, only to see that the next year was a monumental rebound.
But even saying everything above, what are you really after?
Is it really money you’re chasing or is it the feelings you think money can create?
“Many of us believe—or fantasize—that money will bring us to a point where we finally feel free, secure, excited, empowered, alive, and joyful. But the truth is, you can achieve that beautiful state right now, regardless of your level of material wealth. So why wait to be happy?” – Tony Robbins
He made an excellent point here. Feeling free and secured is one of the best joys in life. Yes, looking at my bank account I feel very secured at the moment, but I know this month is a potential rainy one. However, I’ve already gotten myself a new place of work with other side jobs coming up, so I’m frankly secured.
However, is this longevity? No. This is the NOW…and this is why more than 7 billion people on planet earth (and possibly more) are failing because we’re too worried about the now.
Even with the fools who buy expensive cars in traffic-induced cities. Why buy a Lambo? A Ferrari? A Bentley? What’s the point of it? Like when I start making millions, will I buy one? Absolutely NOT! They’re a hassle to take care of and I don’t need to prove ANYONE wrong in this country. I’m certainly not trying to impress anyone here and I’d much rather keep a super low-profile.
So, just ask yourself this question. Please.