As the stock market gyrates between heaven and hell, I thought it was a good opportunity to post this interesting chart. A guy visiting his local bank office snapped a photo of this graphic which stood in the lobby.
While most people look at such a chart and think nothing of it, a person who knows better can see right through it. Examine the chart closely. Do you hold this line of thinking in sanctimonious regard? Unquestionable?
Just what is it recommending and assuming? What are the “crap-shoot” gambles of this chart?
If you can’t spot the four of them, let me help.
CRAP-SHOOT GAMBLE #1
You have a job, and you can meticulously save $200 a month for the next 40 years.
How many people can’t find a job because of a depressed job market? Or, how many have a job where they are considered “underemployed” and can’t afford to just pay their rent, their food bill, or their health insurance? This weak economic environment is now approaching five years in duration. What happens to this chart when these five years turn into eight or even 10?
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CRAP-SHOOT GAMBLE #2
You’re going to be alive after 40 years to enjoy your $1 million.
In the short-term, you are told to prostitute your Monday through Friday for the paycheck of Saturday and Sunday. In the long-term, live 40 years of mediocrity for the dividends of elderly leisure. No one is given a 65 year guarantee, and frankly, I’m not counting on it.
CRAP-SHOOT GAMBLE #3
Your $1 million will have the same buying power of $1 million today.
Inflation will eat away at your nest egg almost as fast as you can save it. A new car could cost $100,000. An MRI from your local doctor might be $15,000. That gallon of milk may be $15!
In other words, follow this strategy and you’ll be just as broke in 40 years as you are today. Retirement won’t be all cruise ship shuffleboarding and trips to exotic islands because your “saved money” won’t be worth nearly as much.
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CRAP-SHOOT GAMBLE #4
There is a “safe & secure” investment out there that yields 10% consistently over 40 years.
This is by far the funniest. Don’t agree?
The next time you see this chart at your local bank, walk up to the teller, smile and say hello. When she asks “can I help you?” point to the chart and say “YES.” Tell her you want to invest your money in the investment the chart shows.
She’ll look at you blankly and offer you one of their 2 year Term Deposits that pay 5% interest. Or maybe she’ll offer you that great money market account that pays 5.5% interest.
The fact is, if such an investment existed, why is the bank itself selling 30 year mortgages at 5%? Where is the 10% promised in the chart?
If the bank can’t SELL that yield themselves, WHY ARE THEY SELLING IT TO YOU?
Of course, a financial adviser will argue:
But that 10% assumes an average over 40 years, not 10% every year.
I understand that presumption. I see charts that you’ve been told to “show-n-sell.” But honestly, how many money-managers do you know who have a 10%/40 year record?
And yet, the average Joe on Main-Street is supposed to mimic, if not surpass it? Yes 10% returns are out there — but is it really that safe and obtainable for the average cubicle-dweller?
The bottom-line is this…
The stock market won’t make you rich unless you’re an insider who owns ownership in a company. (You founded the company, are in corporate management, or are in the inner-circle.)
The stock market won’t make you rich unless you’re a market-maker, running the hedge funds, mutual funds, ETF’s, and investment firms that run the stock market.
The stock market won’t make you rich because you can’t control the markets, nor the computers rigging the game.
The best investment will always be YOU.
Contact us now to find out how to invest in YOU.
Good luck and hopefully, the market pains aren’t your pains.
Have a fantastic day!