The average investor:
- Asks someone else if a stock is a good buy/sell at $XX
- Follows what everyone else is doing
- Never makes meaningful gains that last
- Buys whatever their insurance agent or relationship manager recommends
- Wonders why he/she is unable to retire
The average investor is a victim, and easy pickings for the industry. They react to the news, follow all the best analysts, and pay through the nose for advice and services.
Yet, they can’t seem to get ahead. They will never know what went wrong, as they did whatever was asked of them.
Where are the Customer’s Yachts?
There is a favourite story of mine. A visitor to New York goes to a marina, full of magnificent boats. Deeply impressed, he was told it was the yachts of the bankers and brokers. Naively, he asked where all the customers’ yachts were.
There weren’t any. The customers paid for the industry’s boats.
The industry always pays itself first. It doesn’t matter whether you made money or not, because they have already taken their cut. The average investor is left holding the bag, having been fleeced from the start.
You are who you choose to be
A discerning investor:
- Makes his/her own decisions
- Knows allocation and risk management matters much more than prices
- Doesn’t time the market
- Uses good debt to his/her’s advantage
- Compounds his/her time and money
- Is financially independent at a young age
The discerning investor chooses his or her’s fate. Work and retirement is a choice, and never forced upon them. Money works for the discerning investor, and not the other way around. It doesn’t matter how much money they had at the start.
Surprisingly, the discerning investor works far less. Working long hours in the office to protect their job isn’t necessary. They make much fewer investment decisions, and spend little time monitoring the market. They don’t chase. Good investments and money follow them.
Which one are you?