The Myth of the Free Lunch in the World of Investing

Over the course of my career in providing coaching to our clients, I am continually amazed by the number of people who are looking for “the sure thing.” Even the people who are most educated on how the market works will, at times, fall prey to looking for that “lucky break.” In some ways, though, it’s really not all that surprising. Our culture is a culture of quick fixes and  instant gratification. Countless books are sold on “proven steps” to success and we think that, if we can just follow the right formula, success will be ours for sure.

The truth about investing, though, is that success isn’t quite so linear. The market doesn’t read those “proven steps” books, and it doesn’t care about the formulas of financial gurus. The market is unpredictable, and there is no “secret” that can give you guaranteed success. In the world of investing, true success isn’t the “big score.” Rather, true success is derived from consistent, patient, dedicated, and purposeful behavior over a long period of time.

Let me tell you a story about seeds. There were two seeds that had fallen to the ground and found themselves just a few inches beneath the surface. After the winds died down and the soil settled, each seed tried to develop a strategy for growth. The first seed wasted no time. As quickly is it could, it stretched down deeply into the soil searching for water to help it grow. After a few days, it found a source, took root, and began to grow into something beautiful. The other seed, though, stayed right where it was. It wasn’t sure what it would encounter way down in the dark, and it decided that it would be best to wait for the water to come to it. Why take the risk? In just a few hours, though, a hungry bird happened to be looking for food. Pecking at the dirt, it found the second seed and gobbled it up.

Too many investors become victims of the belief that they can “play it safe” and still achieve success. They think that there is a strategy leading to wealth that involves little to no risk. The truth is that if you ever find anything in life to be free, it’s either a scam, it’s worthless, or there’s a catch. True success takes risk; it takes sacrifice. There is no free lunch in the world of investing. If you want to achieve success in your endeavors, you’ve got to take the necessary risks to make it happen.

All of that being said, risk is a balancing act. You can go overboard and take unnecessary risks that lead to devastating results–and that can be equally disastrous. But, the biggest problem is the belief in “risk-free.” Even if an investment seems like it holds no risk, chances are, you just aren’t seeing it. If you need any help identifying the best balance of risk and reward for you, feel free to reach out to us for a free consultation. We want to help you find success the right way–the success that is actually attainable in the real world.