OK, I’ll go first. My retirement plan got knocked down three times in Round 1, back in the 80s. You know, back when I turned 30 and knew absolutely every freakin’ thing that mattered. 😉 We’ve all been there, right? In a very short period of time I lost three properties. It was at that point one of the BawldGuy Axioms was born, though I didn’t realize it at the time. It wasn’t by any means original with me, but it’s become part of my DNA. It said, “Nobody beats the market.” Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free I’d mistaken knowing and understanding the market with beating it. The market gives what it gives, and allows us to take it in the way it pleases. It’s called goin’ with the flow. Those who constantly counsel us to row our investment kayaks up the river against the rapids? Let them have all the ‘fun’. Eventually their kayak will be headin’ in the same direction as yours. ‘Course, they may not be in it, and theirs might be upside down. But I digress. Spoke with a highly experienced and intelligent guy earlier this year. He had a little over $400,000 in his 401k at work. Now, I realize that’s a lotta money. But it took him just over 20 years to do it, and he’d been puttin’ in quite a bit each year, five figures. His annual yield came out to 2% or so. Those are 22 years he’ll never get back. Did he do better than most of his family and buddies? Yup, and by a whole bunch. How’s that for depressing? See, his ‘plan’ was to throw sizable gobs of cash each year into his 401k, then do all the really smart things he’d been advised to get done. He’s still in his 40s. Let’s say he continues putting in around $15,000 yearly for the next 20 years. Let’s further assume he gets better at generating higher yields. In order for him to add another $600,000, he needs only to earn 2.25% on his current $400,000 plus the next 20 annual contributions. Voila! He does it. Related: Are You Willing To Sacrifice Your Potential Retirement Income At The Altar Of ‘Local Control’? He’s now 65 with a million bucks inside his now former employer’s 401k plan. Those advisers have told him since his first days on the job that when he retires the smart thing to do is to become very risk averse. Pretty sure that’d be human nature at that point, but let’s all agree it’s sound advice. For the record, I have this same conversation, more or less, several times a month. His Dream Retirement Income 4-5% max yield is what he’ll be ‘enjoying’ in retirement. (‘Course, that begs the question, doesn’t it? The same experts who told him how to earn 2%+ will magically be able to show him how to double that in retirement.) On a million bucks accumulated over his adult lifetime he’ll be traveling around the world on $40-50,000 a year, BEFORE taxes. Not. Thing is, the vast majority of Americans don’t get within sniffing distance of even 30% of that much in their 401k at retirement. Think they don’t see that train comin’ their way many years before that last day at work? You bet your last dollar they do. It’s not a fun moment, either. I have these conversations a few times weekly. ‘Course they wouldn’t have contacted me if they’d been giddy about the retirement for which they were headed. Many of them bring up the test I challenged them to take. For a few weeks or so they asked anybody and everybody if they knew just one person who’d retired on even $40,000 a year from their employer sponsored 401k. Seems that question often engenders some fairly interesting conversations. Who knew that listening to advice on investing for retirement from a guy your boss brought in to work might not pan out? 🙂 Real Estate — Discounted Notes — Certain Insurance Strategies Those who insist on bumpin’ around in the dark, still do much better in real estate/notes/EIULs than anyone they know ever dreamed of doing at work with a 401k. Think about it a second. If, over 25-40 years you acquired just four small rental properties bringing in $20,000/year apiece in gross rents at retirement, you woulda created the same $40,000/year retirement income as the guy with a million bucks in his 401k. And remember, that’s with the assumption that you Gumped your way through with no professional help at all. Related: Frankly My Dear, Retirement isn’t as Bad as it Now Appears (at Least not With the Help of REI!) Take discounted notes for example. If you had just a third of that guy’s million bucks at retirement, you could create the same income he did — $40,000. Maybe more. I know, cuz I’ve seen me do it. 😉 What if you’d actually gone away from the DIY approach, and found a mentor or real estate investment pro? Here’s what’s not only possible, but likely. You’d end up in 20-40 years with a retirement income either close to or exceeding the most income you’d ever made on the job. People, that’s whats SUPPOSED to happen. Here’s a little secret: Wanna know why 401k advisers tell employees their income taxes will be lower, and not to worry about taxes in retirement? Cuz they know those employees will have substantially less income then, compared to what they’ll ever make working. Wanna know why that is? Cuz they listened to those guys for most of their adult lives. Takeaway Question: Why would anyone ever do that to themselves on purpose? We can’t beat the market. We can beat the retirement killing, spirit sucking returns of employer based 401k plans. That strategy has had over 30 years to prove itself. It’s failed miserably from where I stand. Invest your hard earned after tax dollars elsewhere. Wanna know why so many parents are now moving in with their kids, or getting reverse mortgages, or selling their homes when they don’t really want to? They relied on those well meaning ‘experts’ at work. They never once took the bull by the horns and acquired solid, real world expert help. They’re not living a retirement now. They’re serving a life sentence. Too dramatic? Bet you know of people yourself who’ve had to make decisions dealing with all these harsh realities. I know, ‘It’ll never happen to me.’ Over the last nearly 40 years I’ve heard that utterance hundreds of times. When hearing it now, it never fails to sadden me. What are you doing about your retirement? Be sure to leave your questions below!