More Powerful than Financial Advice

Powerful waves crashing at Nazaré, Portugal. Behavior is more powerful than good financial advice. Financial advice can be free (google it) or expensive (hire an advisor).

But financial advice tends to be tactical — buy this investment, optimize that tax advantage — instead of behavioral — think this way, stick to the plan, and be patient

Success in building wealth is less about how much you know (or can google) and more about consistently applying what you’ve learned toward a defined objective over many years.

It’s not so much the plan. It’s the execution. 

Google away all you want. But your financial success does not depend on choosing between a Roth or Traditional IRA or whether or not you make a $300 extra mortgage payment next month.

We don’t need a super AI robo-app or investment guru telling us one stock, mutual fund, or account type is better than another.

We need smarter financial habits, common sense, a wider-angled lens, and a longer time horizon.

Think bigger. 

Clearly Defined Objectives

Somewhere along the wealth spectrum is a place called “enough“, where time surpasses money as the most valuable asset. 

It’s where continuing to build wealth is no longer as important as living your ideal life.

Clearly defined financial and retirement objectives elucidate why we work and when we can stop

Without objectives, we may spend frivolously or remain unhappily employed for too long. With them, we see the finish line and strive for it.

Objectives can be specific: I want to save $2.5 million and retire at age 60, so I can travel overseas for two months each year.

Or, broader: I want career flexibility to dedicate more time to my health, community, and grandkids. 

If you need more clarification on your desires, perform this simple exercise. 

Describe your ideal lifestyle and when you want to achieve it. Say it out loud in three to five sentences. 

Here are some questions to help you.

  • Where do you want to live?
  • What activities interest you?
  • How will you stay active and engaged?
  • Do you want to retire or semi-retire?
  • If you plan to continue working, what is the right time balance?

Now figure out how much your ideal lifestyle will cost per year.

Start by measuring precisely how much your current lifestyle costs. Then estimate the new cost of your ideal lifestyle.

I use an Excel spreadsheet and pivot tables to calculate our annual spending. Then I separate our core expenses from embellishments, like vacations and entertainment.

Will your desired lifestyle cost more, less, or about the same?

Using a simple rule of thumb, multiply your new annual cost of living by 25 to get your financial independence number — a financial target. 

Use this number as a starting point and customize your plan, accounting for other obligations (e.g., dependent college costs).

To move beyond estimates and get a deeper understanding of your ability to achieve your financial goals, use a retirement calculator such as NewRetirement.

Clear objectives are the bedrock of wealth planning. 

Earned Income

Earned income and compound interest are the most powerful wealth-building tools out there.

Arguably, compound interest is more powerful in the long run. 

But earned income is the workhorse that supports our lives and feeds our investment portfolios to enable compounding.

Focus your professional energy on growing your income. It’s your primary wealth driver. 

  • Change jobs
  • Ask for raises
  • Invest in education
  • Start a side business
  • Exceed expectations and climb the ladder

Young people should aim to increase their income as quickly as possible while keeping expenses low (while still enjoying their youth).

Mid-to-late career folks in their prime earning years can milk it for as long as they can bear it. But keep sight of financial and retirement objectives. 

A growing income only increases wealth if spending stays under control.

Your ability to earn a growing income is a far more powerful tool than deciding between two nearly identical index funds.

Allocate brainpower accordingly. 


Use your earned income to buy more income through asset ownership. Earn more passive income to alleviate the necessity for earned income.

Basketball player Shaquille O’Neal spent the first $1 million he earned in one hour on cars and jewelry. 

He knew he was terrible with money and needed some advice.

Shaq told CNBC how he learned about building wealth beyond his salary and endorsements. 

When I first got to L.A., [Magic Johnson] said, ’Shaq, it’s okay to be famous and all that, but at some point, you want to start owning things”. — Shaquille O’Neal

O’Neal went on to invest in startups and own various restaurant franchises, fitness gyms, car washes, and a line of personally branded products.

He was even a pre-IPO investor in Google and has invested in multiple startups since the Google exit. 

Billionaires become billionaires because of their assets, not their salaries.

Some of the wealthiest people in the world have famously earned a $1 salary, accepting compensation based solely on equity ownership. 

  • Eddie Lampert (Sears)
  • Elon Musk (Tesla, SpaceX)
  • Jack Dorsey (Twitter, Block)
  • Larry Ellison (Oracle)
  • Larry Page (Google)
  • Lee Iacocca (Chrysler)
  • Mark Zuckerberg (Facebook/Meta)
  • Meg Whitman (HP)
  • Steve Jobs (Apple)
  • Sergey Brin (Google)
  • John Mackey (Whole Foods)

The beautiful thing about ownership is it’s available to nearly everyone via the stock market for as little as $1.

Business ownership benefits investors through growth and distributions (dividends).

Growing businesses increase your net worth and provide lump sums of cash upon liquidation. 

The best potential for building wealth through business ownership is to start one of your own.

Investors can also own early-stage startups via equity crowdfunding (e.g., StartEngine, Wefunder) and late-stage “unicorn” startups through various pre-IPO investing platforms.

These are risky investments. But the rich get richer by owning assets with growth potential. Not all endeavors succeed. 

Beyond businesses, long-term real estate ownership is a reliable engine for building wealth too. 

Purchased wisely, landlords can receive enough rental income from properties to cover financing and maintenance and provide significant tax benefits. Real estate is everywhere.

Beyond your primary residence, real estate ownership is easier than ever with real estate crowdfunding platforms.  

Investing Behavior

Not investing in stocks is riskier than investing if you have a long-term outlook (minimum of five years). 

Investing sometimes has a bad reputation because only the down market days make the local news. 

58% of U.S. adults own stocks, according to Gallup.

That leaves 42% that don’t. 

Don’t be in that group.

Nobody can predict market performance, despite an entire industry that tries. 

But regular stock market investing over decades is a proven wealth-building vehicle. 

So the first step in good investing behavior is always to be investing. Automate investments to dollar cost average into the market. 

Since nobody knows what the market will do tomorrow or next week, it makes no sense to hop in and out. 

Buy the stock market, and hold. Don’t sell, even in the darkest days of a meltdown.

The market has a long track record of coming back from crashes and recessions. It averages around 9-10% over many decades. 

But you will only achieve those returns if you’re invested during the biggest up days.

Trading is different. That’s a full-time job. Most readers here are not traders, so don’t try to be one when the market is volatile. 

As your wealth grows, the mistakes of attempting to time the market become more painful. Stay invested


Ambition is the path to success. Persistence is the vehicle you arrive in. — Bill Bradley

With a constant eye on the objective, each day is an opportunity to make decisions that get you closer to where you want to be.

Persistence in pursuing a higher income and more significant nest egg outweighs strategic financial tinkering. 

Build your industry knowledge. Keep shooting for that promotion. Ask again for the raise you deserve.

Invest new money this month, next month, and each month onward. Don’t stop investing. Buy stocks, real estate, alternatives, and other lucrative long-term assets. 

I set a goal in 2003 to retire at age 55, one year before the age my Dad retired. 

That goal motivated me to contribute to my 401(k) every paycheck for 20 years. It pushed me to spend less and invest leftover cash into income-producing assets.

My wife left her full-time job in 2013, which prompted me to replace her income by starting an online business.

I wrote at least one blog article every week for six years in growing my business into what it is today. 

I discovered it wasn’t retirement pushing me. It was freedom to do what I wanted. 

The consistent investing and writing over the past two decades made it possible to leave my full-time career at age 47.

Every day I had a choice — spend or save — write or not to write. 

I persisted. 

Patience and Time

Business news outlets highlight the get-rich-quick stories over long-term wealth.

Here’s a current headline as I type this:

Screen capture of a CNBC headline highlight a trending story about winning a giant lottery.

Getting rich quickly is alluring but elusive. 

Slowly building wealth is boring but widely available if you are patient. 

And the longer we live, the more wealthy we will all become. Time supercharges compound interest.

The good news for patient people is the chances of success become more likely as your investment horizon increases.

Success is nearly inevitable if you invest over decades.

The stock market is a device to transfer money from the impatient to the patient. — Warren Buffett

Looking at rolling stock market averages from a recent post:

  • Stocks have averaged positive returns for each 10-year period during the last 93 years
  • Over the past 75 years, the lowest 15-year average return for stocks was 5.5%

Real estate prices rise over time too. The longer you own properties, and the more you own, the more wealth you will achieve. 

But having patience while building wealth is a challenge.

Wanting to be wealthy drives us to research ways to optimize the money we have.

But our time is better spent earning more income and optimizing our lives to be happy today instead of waiting for some point in the future. 

Featured photo Nazaré, Portugal via DepositPhotos used under license. 

Favorite tools and investment services right now:

Sure Dividend — Download the free Dividend Kings list, 50+ stocks with 50+ consecutive years of dividend increases. (review)

Fundrise — Simple real estate and venture capital investing for as little as $10. (review)

NewRetirement — Spreadsheets are insufficient. Get serious about planning for retirement. (review)

M1 Finance — A top online broker for long-term investors and dividend reinvestment. (review)

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  1. Excellent article! I have owned income producing residential real estate over the long term, and it has produced a comfortable retirement. Always consider how far along you are in life, and act accordingly. You wont live forever.

    1. Thanks Suzy. Where you are in life plays a big part. All of us can look 5 to 10 years down the road to envision where we want to be. It’s a healthy exercise, and there’s always room to tweak objectives as things change. I love real estate for retirement income, and had a rental for about 8 years. But it was no longer a good investment and sold it when the timing was right.

  2. Well thought through Craig. I think a lot of financial advice is subjective, as depending on who or where you get it from it can include behavioral and conceptual discussions as well. Good habits are key.

    Persistence is sometimes the hardest part for some, I know plenty are tired of being frugal and just want to splurge on a stay at the Ritz!

    Patience and Time – couldn’t agree more. Though I do hope more young people realize time is on their side, and it’s ok to take risks and start a business, because that’s also how a lot of people build their wealth. Taking action is the hardest part, I know from experience.