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Hard-Hitting Money Truths Most People Don’t Know (To Retire in the next 5 Years)

by | Feb 6, 2023 | Money, Personal Finance

Man, I hate vanilla money advice.

There’s so much of it on the internet. It’s as if anyone who knows anything about finance has become a parrot. If Warren Buffman said it, it must be great. If Wall Street sells it, it must be a sure thing.

These are some recent money truths that genuinely surprised me (no BS).

The biggest hidden expense that stops you retiring in the next 5 years

I’m retired.

Not from work, but from ever working a job or dealing with a boss or idiot corporation again (this isn’t a humble brag — it’s the truth so you know I’m not reciting some useless platitude with zero experience).

An insight I got from Alex Hormozi left me speechless.

The fact that you don’t know how to make a million dollars a year is costing you a million dollars a year (Source).

He says the focus should be to work out which resources are missing so you can start to pay down this tax.

The internet has democratized information. You literally have zero excuses. It’s not privilege, gender, race, or postcode that matters.

It’s your ability to be resourceful.

One example: I’m seeing people take this ChatGPT thing and literally print money with it. I was skeptical. I still think it’s overrated, but that’s because I’m stuck on top of Mt Timmy Boy and don’t have the energy to spend on it.

Plus I don’t need to. I’ve found my money game, so I’m not going to start a ChatGPT game and dilute my income sources.

Doesn’t mean you can’t. Saying “I don’t know” is a tax on your financial freedom. Take a course. Watch Youtube. Experiment. Interview people who do make decent money. How do they do it?

Become a self-learner to transform into a self-earner.

We just came out of a zero interest rate paradigm

The last roughly 3 years have messed with our money minds.

We had access to 0% interest rates. The US Federal Reserve created trillions of dollars out of thin air. Governments dropped free money from helicopters to make up for the bat virus shutdown.

According to money man Austin Rief, this led to:

  • A JPG NFT boom
  • Tech stocks going bananas
  • Everyone starting a podcast
  • Useless day in the life TikToks
  • Lots of US citizens moving to Miami
  • Second hand cars selling for more than new cars
  • Software engineers with 4 jobs and 10 side hustles
  • The Great Resignation and Quiet Quitting movements

All of these things created madness. Madness, I tell ya.

You could literally throw money at most stocks or crypto and get rich. I bought $1000 of a random crypto and did like 30X. I thought I was a sexy genius haha.

None of it was real though.

Talk to a boomer who lived through the 80s crash or the dot com bubble. The chicken always comes home to get slaughtered by the friendly local butcher’s knife.

Trying to shake off the delusion and privilege will be hard. But it’s happening. I’ve seen it in the creator economy. The vacationers who came to write online and ride the wave have all left.

The ones that refuse to sell or have zero business skills didn’t make it.

The hard truth is unless you study financial history you’ll get fooled by fake bubbles. Of course if money costs $0 to borrow people are gonna get high as a kite. Makes sense.

The baby boomer game is dead

Get ready to have your money brain annihilated. I warned you.

Every financial guru under the sun and every well-meaning finance book is out of date. Dead like a horse carcass after a snake bite in the Aussie sun.

The baby boomer game was to buy real estate, invest in the USA S&P 500 index fund, and get a good income from an employer.

There’s one freaking problem: currency debasement.

Countries like the US have devalued their currency by printing extra money out of nowhere. This has led to inflation. The price tag you see on literally anything doesn’t factor this in.

This means real returns from money being invested are hard to measure. It also means many of these gurus are plain wrong about how much they made, and therefore, the strategies they used to make money.

What also destroys the baby boomer investing thesis is salaries. 40 years ago the average household income was $55,000. Today it’s $70,000 — up 27% overall.

No wonder people feel poor.

Now, if you invest in the typical index fund you might make 7%-8%. That doesn’t factor in taxes or the currency debasement. The real return is low. Then you add in US inflation of 6.5% and you can quickly see how the traditional boomer strategy gets lit on fire.

There’s no way to fix stocks, currency debasement, or real estate.

Financial expert Raoul Pal has a solution. It’s one you rarely hear about. The way to get ahead of the curve is to understand new asset classes. The two biggest right now are Web3 and exponential age tech stocks.

Yes, I know they’ve temporarily dropped, but we’re talking about the long term. Over 5+ years these two types of assets will blow past index funds and real estate investing that ties up all your free cash and makes you a hotel manager to a bunch of hard to deal with millennials like me.

Doesn’t mean you don’t touch traditional investing. It just means you don’t bet the farm on it like previous generations did.

Playing old money games forces you to get further behind.

Great Depressions are one of the happiest times in history

We’re taught to fear recessions.

We’re told to expect another Great Depression one day, like the one my grandma lived through that forced her to cut up her wedding dress to make baby clothes for her kids.

I want to turn that idea upside down for you. Finance writer Morgan Housel wrote that Great Depressions have produced some of the biggest breakthroughs in history.

Without recessions and depressions, we aren’t motivated to get off our asses and do the work. We’re too comfortable, too safe.

We’d rather go to work and champion random social justice movements we know nothing about than do the work.

It’s why CEOs of companies like Coinbase and Shopify effectively banned social justice causes in their companies. They were a distraction. A company can only have one mission, although when times are good standards and philosophies slip.

Recessions and depressions create stress. Stress forces people to act out of survival. That action leads to problem-solving, and that’s how we get breakthroughs that create future happy times.

Use the down times to help you get motivated to build the good times.

Because if you do that, you’ll make more than enough money to retire in the next 5 years.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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