The phase that quietly destroys investors and how to navigate it
In this coaching-style presentation, Todd Polke explains the "sticky middle"—a phase where an investor's portfolio appears to have lost momentum despite solid foundations. He outlines why this phase is dangerous, describes three common failure modes (impatience leading to chasing shiny opportunities, disillusionment causing investors to quit, and complacency resulting in loss of focus), and introduces the concept of the "dumb tax"—the hidden cost of mistakes. Polke emphasizes that successful investing relies on a systematic, psychological approach rather than merely picking assets. He uses metaphors such as an investor switchboard with 22 dials to illustrate actionable levers, shares a case study of a Melbourne couple who overcame the sticky middle by trusting their system, and references insights from Keith Cunningham and the TV series The Queen's Gambit to illustrate forward‑thinking strategy. The talk concludes with a practical diagnostic framework—identifying the greatest untapped opportunity and the biggest binding constraint—to help investors adjust their dials, stay patient, and accelerate toward compounding results. A free diagnostic link is offered in the description.
Chapters
You're not stuck in your portfolio. You're just stuck in the middle. The income's still working. The first wins are behind you, and on paper, everything looks fine, but underneath, it feels like nothing is actually compounding. So what do you do? You start adding more, more research or more deals or more effort, and ultimately nothing changes. And here's the reason. It's not because the portfolio is breaking. Is because you as the investor starts to break. Now, you're not a beginner investor anymore. You've already done the hard work. You've been able to pull together some capital. You've gone out there in the marketplace and you've deployed it and you've set up some assets. You might have set up some income streams. And the early phase, it had a lot of momentum. It felt like you were accomplishing some things because you were actually out there doing some things and maybe you've even got some wins and maybe even some visible results. But now you might have arrived at this place in your portfolio where everything seems to have just slowed down. The initial excitement, the initial momentum has just kind of died out and it feels like nothing much is really happening. And some people really start to question themselves at this level of their portfolio. But what's important to understand is that where you are right now is not a space of failure. It's simply just a normal phase in a portfolio that I've seen over and over and over again. So there are 3 things that we're going to be covering I'm going to talk to you about why the sticky middle is one of the most dangerous places for investors to arrive to without understanding what is going on. We're going to talk about, well, what are the 3 failure modes? What are the 3 typical action steps that I've seen a lot of investors take over and over again, which has ultimately ended up in investors paying a lot of dumb tax? I'll tell you exactly what that is very soon. And I'm going to tell you about what are the operators that actually get through this phase? What do they do differently? and how they come out the other side really in the space of acceleration. And I'm gonna tell you a little bit about a chess prodigy as well and how that impacted the way of thinking when it comes to the world of investing. Now, most investors that get into the marketplace, one big mistake that I see them make is that they think investing is just about buying assets. They think about, well, what property am I gonna buy? Or maybe I should invest in some shares over here. Maybe I should pick up some gold along the way. And these are all great questions. But I've gotta be honest, these are tip of the iceberg style questions. The real majesty behind your portfolio and the real driving system that successful investors have has everything to do with what's happening beneath the surface. These are things like your strategy, it's things like your foundations, it's things like your structure, it's things ultimately, what is the system that you've installed beneath the surface which is gonna tell you what asset you need to buy in the future? And one important element of this math behind the surface is all about your psychology. What is the psychology of the operator who is actually driving the system itself? And this is one of the biggest failure points that I've seen happen. Now, the middle is where psychology tends to crack because they look at their situation, they're looking at receiving it right now, and what it looks like right now isn't matching the vision that they have in their head. And they start questioning themselves over and over again. Now, there is nothing wrong with what is going on right now if you set this up the right way to begin with. What the problem is, what is the story that you might be telling yourself about what's happening and what you're seeing in your portfolio right now that is producing this failure style behavior? Now, failure mode number 1 is you sat there, you've looked at your portfolio and it's not moving as fast as you'd like it to and you start to get a little bit frustrated. And if you're honest, you start to get a little bit impatient in your situation. And so what do a lot of people do in this situation? They start to go, they chase shiny They chase the latest and greatest new thing or trying to find the silver bullet, which is going to accelerate things at a rate of knots, whether it's a new crypto coin or they get involved in some fancy foreign exchange trading, or they've gone and do something which is riskiness outside of their plan and outside of their strategy. Now, I'm not judging here because you know what? I've done this myself and I've lost myself significant millions of dollars of money doing this in my first 4 to 5 years of investing. You see, I built a decent portfolio within my first 5 years. I had 4 properties in my portfolio. I was trading options, I was making money and everything was great. But then things came down to a bit of a slow point. And so what did I do? I went chasing the new and shiny thing. And that chasing is the very thing which wound up costing me millions of dollars and almost making me have to start all over again. And I lost that money chasing returns instead of focusing on building systems. So the first failure mode that we spoke about is when investors get impatient. The second version is when investors get disillusioned. They look at their portfolio, it's not giving the results they want, and then they start saying to themselves, maybe this just isn't for me. All this investing stuff, it just doesn't work. And so they quit. They might wind up selling the properties that they bought or getting out of the trading that they might've started learning how to do as another income stream. And they go back to what they think in their mind is safe, which is just I go back to work and I focus on paying down the mortgage. The very thing that you were doing before you got a start in the world of investing to begin with. And they quit. And obviously, as soon as you quit, you're never going to wind up seeing the results or what the outcome is on the other side of the sticky middle. So we've had impatient, we've had disillusioned, and now we've got complacent. The portfolio has slowed down, and so you've shifted your attention back to other things in your life. Back to the busyness of life. You've gone back to being busy at work, being busy with family, and ultimately you've gone and gotten distracted. And it's the easiest thing to do. We've all done it. Don't get me wrong. But when you stop paying attention to your wealth business, it's going to start to go backwards just the same as it would in every normal business. Because here's what I want you to understand. Every single one of you, you are running a wealth business right now. But the question is, are you operating as the CEO of your wealth business or have you taken that CEO hat back off and just gone and gotten the busyness of just being busy in life. And as soon as you take your attention away, well, your whole momentum that you've created starts to fall by the wayside. And month after month and potentially year after year go by and you've lost so much opportunity in the compounding effect of when you were actually taking command of your wealth creation business. All 3 of these failure modes that a lot of people play in, There's this very important cost to it that a lot of people don't understand. This is the concept that I actually got from a guy called Keith Cunningham. Now, if you don't know who Keith Cunningham is, he's actually, if you've ever read Rich Dad Poor Dad by Robert Kiyosaki, he was actually the rich dad from Rich Dad Poor Dad, like absolute guru when it comes to the world of business. And so he talks about this concept called the dumb tax. And what we're talking about the dumb tax is that it's tax that you pay every time you make a mistake in your business or you make a mistake in your investing portfolio. So that mistake could have been made by chasing get-rich-quick strategies. It could have been made by selling assets even though you hadn't given it the time to be able to work, or you could have made it by taking your eye off the ball and really just kind of getting out of the world of investing altogether. And that impatience, it can cost so much money. It can cost so many decades. I've seen many investors over the years who they know that they should have been doing more in their portfolio than what they've been doing right now because they wound up taking one of these action steps, either being impatient, doing nothing, or becoming complacent. Now, what I'm talking about right now, you may be sitting in this place called the sticky middle right now and you're wondering what you need to do about it. Maybe you haven't reached there, or maybe you've seen it and you've actually moved past it. Now, I mentioned before about a chess prodigy, and you might have been wondering, well, what on earth has that got to do with any of this? There are 2 reasons why I don't get involved in Netflix anymore. One of them is called Suits. The other is called Queen's Gambit. I don't know if you've watched any of these shows. Perhaps it's my undiagnosed ADHD or something like that, but I literally lost a week of my life on each of these shows because the open loops and the hooks at the end, I got absolutely hooked on them and I absolutely binged them. I want to share with you what I learned out of The Queen's Gambit. It follows this young chess prodigy who learned how to play chess from the maintenance person in the basement of the orphanage she lived in. And she picked it up just like this. And there's a couple of scenes in there you see where she's sitting there staring at the roof in the orphanage and looking around. The other girls are around her and she's looking at the roof. And there's this virtual chessboard on there where she's playing in her mind around this. And so she's seeing all the moves and seeing all the counter moves. And she goes ahead and winds up becoming the grand champion of chess or whatever it's called in the entire world and the first female to ever accomplish that. Now, here's what they say about the grandmasters at chess is that they can see 17 moves ahead of what is actually happening on the board right now. And so what that means is that a more amateur chess player, before they've even sat down on the board with them, they've literally already lost because they can see so much further. Now, because I've got a lot of experience when it comes to building portfolios, I've done it my own life and I've helped hundreds, if not thousands of people be able to do it there. I can see further than people can see in the world of investing. And so that's why I know you're gonna hit one of these 3 different phases, potentially in this sticky middle phase. Now, there's some area in your life where you're an expert, something where you are extraordinary at, and you can see a lot further than I can. The job is to bring that depth to the game of wealth. And sometimes you've got to go learn from people that have been there before you. Here's what I want you to imagine, that you've got an investor switchboard sitting in front of you. And on that switchboard, there's 6 different compartments and a total of 22 dials sitting on them. At any point in time, those dials are things that you can turn, which can start changing and shifting some of the wealth system that you're building in and around you. Now, each dial is something that you as an operator can adjust at any point in time. But you know what? Most investors don't even know they exist. So what you have to understand is that you are always investing. It's not only when you're doing the big asset purchases or putting in the next income stream or learning a new skill, how to trade and build some more cash flow. Every single moment, there are moves that you could be making. But when you're choosing to do nothing, well, that's also an investment you're making as well, but it's just not an investment into your own strategy. You're investing in someone else's strategy. Whether you're just focusing on paying down the mortgage, well, that's you investing in the bank strategy. Or maybe you're just putting your money into the default super. That's you investing in the superannuation strategy, not in your necessary plan. There is no neutral position. So you might be asking the question, well, that's great, I've got this dashboard of dials, but which one should I be choosing? What should I be adjusting right now which is going to set me up for my next phase? Well, there's 2 questions you need to be able to answer in order to be able to understand which of the dials you're going to use. The first is, what's my greatest untapped opportunity? The thing in your situation right now that if you were to help to leverage that it's going to be able to make some quantum leaps in your portfolio. And secondly, what's the biggest binding constraint in my portfolio? The bottleneck which is sitting there, which is holding everything else back, that if you were to be able to uncork that, it's going to allow you to kind of get investing flow going at a much faster rate. I want to tell you a story about a couple of clients of mine. I started working with this couple from Melbourne about 5 years ago now. And so when they started, they had their own home and they paid down the debt quite substantially. They'd followed the script. They'd built some income streams. They had some money in their superannuation. And at the age of about 50, they were starting to think about, well, what's next? How are we going to set ourselves up for the retirement that we truly want to have? And they knew they needed to get started investing. When I first met them, they had zero investments whatsoever. So we built our plan. And we executed our first round of investment strategy by buying 2 properties. We built some other income streams and in the second round of investing, we also started to set up some pretty significant property plays, profit plays that's gonna come to fruition 3 to 4 years later. I'm not gonna go into the mechanics of the strategy right now. Now we're now 4 to 5 years later and we're sitting down for a strategy session just a few days ago now. And here's what they were saying. I just don't know if this is working. I thought we'd be further ahead than where we are right now. They were looking at their situation and they'd found themselves stuck right in the middle of this sticky middle phase of their portfolio. The system and the structure was set, but the results just hadn't caught up to what they'd already established. Now, when I looked at their portfolio once again, I knew what was coming and what we needed to do was that we just mapped out the cash flow for these guys over the next 3 years. And let me tell you this, if they did nothing more, no more investing, no paying down debt, literally just hung up their investing boots and did not touch another single thing, they were gonna find themselves in the next 3 years earning between $160,000 to $200,000 a year income passive from their portfolio, from the system they set up. And this is what they said to me. Todd, I'm feeling better now. I remember those early years when you were telling me to be patient. The system works. I didn't understand it then, but now looking at it, I realize that we are there and I realize that it absolutely works and I just had to trust the system. So if you found yourself stuck in the sticky middle right now, Don't despair. Your big job right now is just not to go and fuck things up. You've got to trust the process in what you're doing and realize that your results will catch up to the system that you developed. A lot of people spend decades of their life getting themselves into the financial position that they find themselves before they start investing, and then they expect it to change overnight. Investing is a marathon. It's not a sprint. And when you look at the system and the structure you set up, you need to have patience in the marketplace to be able to allow your portfolio to mature and actually start to give you the results that you deserve, especially after all the hard work that you've done. And also remember that you never stop investing. This is the moment in time where you need to look at that dashboard, like the investor dashboard that you have in front of you. And what you want to be doing right now is asking yourself this question. What should I be doing right now, which is going to set myself up for the next big run in my property investment acquisition process so that I can be in the best possible position to be able to execute like a madman, to buy more property, invest in more shares, continue building out the system as quickly and rapidly and as effectively and also as safely as you possibly can. This is the kind of clarity that most investors never get to have. And you can have it in the next 10 minutes. There's a free diagnostic I've created. It's absolutely free, and the link is in the description. Ownership, control, choice, and then purpose, in that order always. That's the way through the middle. Find the one thing, fix that one thing, and everything else is going to compound on top of it.
