One of the biggest lessons I’ve learned from reading hundreds of investing books is…
If you do what everyone else does, you’re going to get the results everyone else gets.
I realize this isn’t any “secret” lesson, but it is extremely important nonetheless. If someone invests in mutual funds, the best they’ll do is get the average results provided by mutual funds. More than likely, they won’t actually get these average results and this is because they’ll buy and sell funds trying to time the market and they’ll actually end up reducing their overall return.
If an investor wants higher returns, they’ll have to do things differently than everyone else. See this post for ideas on how to get better results from your investments. They’ll have to think for themselves. They’ll have to buy when everyone else is selling. They’ll have to sell when everyone else is buying. They’ll have to layer investments on top of each other to accelerate compounding.
This same lesson from investing applies to every area of our lives.
If you sell real estate and you copy what most agents do, you’re going to get the same results most agents get. According to U.S.News, the average annual income for real estate agents is $39,800. In order to exceed this average income, you’ve got to do things differently than other agents. You’ve got to walk a different path with your business.
If you eat the same foods eaten by the average American, you’re going to be overweight. According to the CDC, 69% of American adults, who are over 20 years of age, are either overweight or obese.
If you only save 10%-15% of your income, you’ll probably have to work until your 65 or 70 before you’ll be able to retire. To retire early, you’ve got to save significantly more than the average. As this graph shows, the average American does not have enough saved for retirement:
How is it possible to hit retirement age with only $172,000 saved? How are you going to live in retirement if you don’t have enough saved?
According to the fool.com, the main reason we don’t have enough money saved is because of of lifestyle inflation. “We have this insidious habit, as Americans, of continually upgrading our possessions as we get older and earn more money.” We buy nicer cars. We buy a bigger home. We buy more expensive clothing.
If you spend money the same way the average American does, you’re going to be in the same financial position as the average American.
To get better results in any area of our lives, we have to think and act differently than everyone else. We cannot copy what others do and expect better results.
In my “embarrassing car” post, I wrote about my little car that sounds like an airplane because the tires are so loud. One of the main reasons I continue to drive this car is because I’m trying to teach my daughters not to care what other people think. I’m trying to show them how to walk a different path. I’m trying to show them its actually better to be different. This isn’t as easy as it sounds because throughout most of our lives we’re trying to fit in. We’re trying to be like everyone else. Doing things differently is uncomfortable. Walking a different path is hard.
However, it is vitally important if we want better results.
How can you walk a different path in 2016?
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