Gurus' biggest lie (or in their words "hot take") [#16]
An expensive lie to believe
Dear Reader,
Let’s start the year ruffling some feathers, shall we? Or rather, combatting the damaging narrative so many gurus put out there.
I absolutely love LinkedIn. It’s a wonderful platform that has opened many doors for me. It has landed me jobs, given me wonderful clients, and I have met many wonderful connections (including some of you readers!).
But, and there sadly must be a but, I have a gripe with the dominant narrative out there. LinkedIn is lying to you. And when I say lying, I mean some heavy and obscene lies.
“No one has ever become a millionaire being an employee” say the gurus du jour.
This isn’t just a lie. The opposite is actually true.
While gurus want you to believe that the only way to become wealthy is by quitting your job and setting up on your own, the stats actually prove them wrong.
They lied to you! How do I know?
Based on a 2018 study of 10,000 millionaires in the United States conducted by Ramsey Solutions, the largest study on millionaires I have ever come across.
Here are some eye-opening metrics from that study:
93% of millionaires got their wealth because they worked hard (and 33% have never made 6-figures in a single year)
Only 15% of millionaires ever held a senior leadership role (think VP or above)
The top 5 careers for millionaires are:
Engineer
Accountant
Teacher
Management
Attorney
(Read that again - teachers are amongst the most likely to become millionaires! How you’ve been lied to!)
But wait, there is so much more… You know what’s most boring out of all of this? 80% of millionaires invested in their pension and in long-term stocks. 3 out 4 millionaires claim the path to success is consistent investing over a long period of time, not by setting off on your own and starting a company.
Contrary to what gurus selling you courses, communities, or LinkedIn ghostwriters want you to believe, they are selling you the least probable path, not the norm (or in their narrative, the only path).
Now, working for yourself may give you the potential for a shorter ride, but it comes with a lot of risks, and ultimately, it also comes with the potential for a much, much longer ride. Being an entrepreneur is the best-paid job on Earth. It’s also the worst-paid job on Earth.
The reason they want so badly for you to follow their path?
that’s everything they know, and they mean well at the end
that’s how they monetise and build revenue
By the way, it’s fascinating how many of those selling you the dream got most of their wealth by… selling said dreams. The coincidence is rather intriguing.
Being employed IS a path to wealth & I’ll prove it
If the world’s largest study of millionaires ever run isn’t sufficient to convince you, I hope maths will.
Here’s what you should do
Take any compound interest calculator online (I typically use this)
Set your currency and start with an initial investment of 0 for the sake of the example
Most financial experts tell you to use an 8% annual interest rate, but I often do my planning with 7%, to be more conservative
Set the value to compound monthly and invest it for however long you have between now and 70 (the tool returns annual balances, so go beyond your typical horizon for perspective)
Put however much you can afford to deposit every month - you are doing extremely well if you manage to set 20-25% aside
Watch the magic of compounding interest work for you (the 20-year mark is often impressive!)
How much is enough money? The established guideline from the Trinity Study claims you can safely withdraw 4% of your portfolio value every year and not run out of funds (or if you prefer, multiply your desired income in retirement by x25).
Regular investing is a very credible and plausible path to wealth - and you don’t even need to sacrifice being an employee if that’s the path that you enjoy!
Anyone who claims the only path to wealth is to buy their course start on your own is either ill-informed or trying to sell to you. And they are selling based on a lie.
If you genuinely want to become wealthy, follow people who talk personal finance, not entrepreneurship or content creation gurus. Some of my favourite names:
Get started with Dave Ramsey (creator of the Baby Steps)
Learn to invest with J L Collins (The Simple Path to Wealth) and The Money Guy
Discover your Rich Life with Ramit Sethi
And see a whole new worldview shape in front of you. Most importantly, embrace a more accurate worldview shaping up.
Being an employee is cool!
I’ve never hid from anyone I have a day job. I actually LOVE having a day job. My coaching services provide me an opportunity to leave a greater legacy in this world, by helping people change their lives in rather drastic ways, but I do not intend for it to ever replace my income, even if it realistically could if I went full-time.
Crucially, being employed provides me with the financial predictability to build a long-term plan towards wealth, while having a scale of impact I could never have on my own (even if I created my own business).
We need to celebrate people who work for organisations, who are part of a team and build something bigger than themselves. We should champion those who specialise and build extreme impact - after all, most of what you personally spend money on was built by teams, not one-person outfits. We must move away from the narrative of “only those who work for themselves will become wealthy”. The facts have already disproved this.
Let’s stop letting others paycheck-shame us! Be proud of what you do, and don’t be bullied or peer pressured into starting a business you aren’t completely in love with.
Employed is the clearest path to financial freedom. Ignore the gurus and enjoy your career instead.