Every Time You Invest In THIS, You Delay Your Retirement

Index funds, they're going to get you to retirement, but not at your goal. Not even close. A 50-year-old with the median savings is roughly $380,000, well short of Fidelity's own benchmark. And that famous 7% average everyone quotes? Well, that's already adjusted for inflation. The real number, it's a lot lower than you think. The new safe withdraw research just got more conservative also. Save and invest in index funds is not a plan. It's a prayer. It's a hope. There's one variable nobody ever reverse engineers. The one that decides whether you retire in 10 years or never. Now, I built this scenario with real numbers, and I want to show you exactly how it breaks. Now, before we talk about retirement and how much you need and if index funds will even get you there, before we do any of that, before you can even decide if this is a good investment or a bad investment, the first thing we have to figure out is where are you going? What's your goal? If you don't have a goal, you're going to hit it every time. But if you want to hit what you want, you need to set the goal. So the first thing we have to understand is How much do you even need and by when? Right? Nobody's calculated that. So if I know exactly how much I need and by when I need it, at least I have a target. From there, we can work backwards to come up with a plan. So this is the part where most people fail. A lot of people have thought, I don't know, $10 million. Well, that's not an exact number. The brain works off specificity. So I want to know exactly how much I need and exactly by when. So for example, how much do I need every month? For the ideal life that I want to live? Not about, exactly. How much would I pay for my rent or my mortgage? What would my bills be? Do I go out to eat every day, once a week, once a month? Do I take a vacation once a year, once a month? How much do I spend on those vacations? So I need to come up with the exact number I need and by when. Then once I have that, I have to figure out how much I have and what my rate of return is to get there. So am I making 6% return on my money like most 60/40 portfolios? Am I getting 7% return on my money compounded annually like I might get in most 401 plans? And if I'm getting that 6, 7, 8% number compounded annually, will it get me to my desired number at the timeframe that I want? That's the first step, knowing where I want to go, where I'm starting from, and what my rate of return will be. Now, to figure out what my rate of return is or my compound annual growth rate, we call it CAGR moving forward, to find out what my I need to look at my past performance. Now we can see there's a famous 7% S&P average return, the S&P 500, which is sort of the benchmark. But there's a couple things that you need to know about that 7% number. First of all, we need to look at that number over decades, not years, right? Because you're going to retire for decades and we need to know how that number fluctuates and adjusts. Number 2, most people are not 100% in the S&P 500. Most people are in some blend of stocks and bonds. So maybe only 60% of your money is in stocks and only some of that 60% is even in the S&P 500. Of course, the goal is to beat the S&P 500. Most people don't. So you need to find out what your real number is. But let's just take the S&P 500 number as it is at 7%. If we're getting 7%, why does that still leave a 50-year-old with median savings with maybe a few hundred thousand dollars behind their target. And it gets even worse because when you adjusted for inflation, you realize that at 7%, it's not even keeping up with the cost of inflation. Now I know that— what does that mean? What does that mean? Because Mark, I thought the inflation target CPI is 2%, right? And maybe we're a little bit ahead at 3%, right? So 7% is well above 3%. Well, what if I told you CPI is actually CPI? Lie. You see, the real rate of inflation, or let's just say the real rate at the cost of living increase, is from the rate of the money supply increasing. If you take a look at the Fed balance sheet, you look at the M2 money supply chart, what you'll see is that the rate of growth continues to go up at a faster and faster rate. Over the last 5 years, we can see that both of those charts are going up by about 10% a year. That's the real number you have to beat. 10% a year. And so if you're making 7% a year, on paper, it looks like you're getting wealthy. It looks like you're making a lot of money. But the reality is when you go to spend that money, you're going to notice that your quality of life has gone down. Okay. So now that you understand the CAGR, the compound annual growth rate, and that's going to show me how much money I need to grow at the rate I need to grow it at to get to my goal in time. Well, we can realize that there's actually 3 levers that I can pull if I need $5 million in 5 years or $10 million in 5 years, and I have $1 million today, there's 3 levers. Lever number 1 is time. The compound annual growth rate tells me how long it takes for my money to double. There's a rule of 72. 72 divided by the yield, 10%, means that every 7 years my money doubles. If I get it to 20%, my money doubles every 3.5 years. So I can wait. How long do I have to wait for my money to keep doubling to get to my goal? If I don't like to wait that long, then my second lever I can pull is the CAGR itself. What if I go from 7% to 10%, 15%, 20%? The third lever I can pull is how much capital I have. If I only have $1 million, can I go make more? Can I sell something? Can I sell my business? Can I pick up an extra shift, whatever I have? So those are the three rates of return. Once I understand those three levers that I have at my disposal, I can then figure out what it's going to take for me to achieve the goal, to achieve the number that I need. Okay, now real quick, before I keep going, I just want to say that everything I've just sort of walked you through so far, the required return the gap, the timeline, that's a number almost nobody actually runs for their own situation. So here's what I do. My team, we run a free strategy session where we look at where you are now, the exact number you need to hit, and the fastest path to close the gap. Now, this is— this call is not for everybody, but if you've got real capital and you want to put that to work and you're serious about engineering the specific number instead of just hoping for an average, then go ahead and book a time. I'll put a link down in the description down below. Go grab a slot, then come back and let's finish the breakdown of this video. All right. Now let's walk you through some real math so you can do the math on your own. Let's just say that you're 45 years old and you have, let's say, $1 million saved for retirement. And your goal is by the time you're 60 years old to have, let's call it $10 million. All right. So what you have to figure out is how do I get from $1 million to $10 million? What does this path look like? And more specifically, what is the compound annual growth rate, the CAGR, that I'm going to need to achieve it. Let's walk you through some numbers. So first of all, this is a 15-year span. I need a 10x return from $1 million to $10 million. So let's just say that I can achieve a 10% CAGR right now. Like we walked through the math, you're probably getting more of like a 6, 7, or an 8. But let's say that I'm getting a 10% CAGR, where I'm going to end up is $4.6 million, less than half of my goal. Okay, well, let's say I do a little bit better. I get to a 12% CAGR. Now I'm a little bit higher. I'm at 5.8%. Let's say I get to a 15% CAGR. I'm getting closer. Now I'm up to $9.4 million. Almost there. What is the number I'm actually going to need to achieve my goal right here? It's going to be 15.54%. That's the number I need to achieve my goal. Now the question then becomes a math problem. It's an engineering problem. The question now becomes, how do I achieve a 15.54% CAGR over the next 15 years so I can achieve my goal? Now we have a problem we can solve. Now we have a, a starting point, we have a destination, and we have an exact goal. So now the only question I have to figure out is how do I go from the 6, 7, 8, 9, whatever percent I'm getting to 15%. Now we have a problem we can solve. Okay, so the question is what type of assets do I need to achieve this? So if the S&P 500 is only going to give me, let's say, you know, we'll call it 8% to be generous. I'm well short. So what am I going to do? Well, what most people do is they take their money, their $100, and they divide it horizontally. So I'm going to put, let's say 40% here in like the S&P 500. I'm going to put 30% here. Let's call that real estate. I'm going to put 5% here into some Bitcoin. And then this 40% is going to get me the 8%. This 30% is going to get me 10%. And this 5% is going to get me, let's call it 30%. But what I have to do now is I have to take the average of these 3 numbers divided by the percentage. So now I get an average number based off of these. So what we want to do is we want to engineer the return we need. So instead of investing horizontally, what we want to do is take our $100 and invest it vertically. So I'll, I'll still do the same S&P 500, but then I'll layer that with a home right here. And then I'll layer that with Bitcoin here. So instead, now I have the, the money doing one asset control, two asset control, three asset control, or in other words, this $1 is now having three assets compound at the same time. So now instead of the average of that, I get the addition of all 3 assets at the same time. This way I can design exactly if I want a 15% return, a 20% return, a 30% return. I can choose, I can build my own structure. Alright, so now you know the number. But knowing the return you need is not the same as knowing how to get it. I mean, I kind of gave you an overview. But as you can tell, there's a lot more to it. And this is why most people get stuck right here, right? They either accept the average even though they know it's not going to get them where they need to go, or they start gambling. They take on all kinds of risk. Now, the next video shows you the wealth operating system designed to produce cash flow, growth, leverage, and protection all working together at the same time. Because once you know the return you need, the next question is what system can actually create that? Now, the video that I have on the screen right now is the answer. So go ahead and click there and I'll see you over there.