In today’s episode, let’s dive into the idea of being a "maverick investor."
This specific idea has been a hot topic in our community lately, and we've been putting a lot of effort into understanding exactly what it means.
So, if you're curious about becoming a maverick investor or already identify as one, hopefully, by the end of this episode, you'll have a better idea of what it's all about.
The Three Types of Investors
Let me start by saying that there are three types of investors out there who are trying to make their way in the world.
The first investors are those who follow the traditional plan of saving for retirement for about 45 years, aiming to retire at around 67 years old and hoping to have enough money for their future.
Once they retire, they'll either live on a very tight budget using their savings or use their assets to support themselves for the rest of their retirement years. Basically, they have two options, and it's up to them to decide which one to choose.
But nowadays, more and more people are questioning the traditional retirement plan because they feel it's becoming outdated for several reasons.
One reason is that working very hard for at least 45 years straight can be exhausting, and it can feel like your whole life is just spent toiling towards a far-off retirement goal. People want to be able to take a break and enjoy the fruits of their labour before they turn 67 years old.
Now, another type of investor you may have heard of before is the "FIRE" community, which stands for "Financial Independence, Retire Early."
Within this community are two subgroups: "Fat FIRE" and "Skinny FIRE," and their main goal is to find ways to invest so that they can exit the traditional work cycle quickly and make an impact in the world.
Their approach is simple: invest the least amount of money possible to create a small but sustainable income stream.
Usually, they aim to save up a capital base of less than a million dollars, then live off 3% to 4% of that, which can be around $30,000 to $50,000 a year.
Now, the FIRE community has some great ideas about living simply and focusing on experiences. But it's important to recognise that not everyone finds this lifestyle appealing.
Some people feel they can't provide their family and community with the lifestyle they desire while following the frugal approach.
So that brings me to the third group of investors, and for the benefit of my community, I'm calling these people mavericks.
These people have worked hard and made traditional investments like property and shares, but they don't want to work until they're 67. They're looking for a change of trajectory in their income stream so that they have the freedom to choose whether or not they work.
The traditional retirement model doesn't appeal to them, and they want to explore other options.
As for me, I'm not too fond of relying on a faceless fund manager to create my wealth, which is the case with the traditional retirement plan.
But what really is a maverick investor? A maverick is someone who has done a good job of building up some money and now wants to invest it to earn more. This kind of investing is life-changing for someone who wants to exit or have the option to leave the workforce while maintaining their lifestyle and positively impacting the world.
Maverick Investor Case Study
Let me try to make it simpler and easier to understand by giving you an example of a person who is a part of our community and to whom I think you can relate.
This client of mine is a hard-working electrician who runs a large business and cares about his family's well-being. However, before he became my client, he was facing a lot of frustration.
He had a bad experience with a business partnership, and his business was struggling due to low-profit margins. To make matters worse, the COVID pandemic made everything even more difficult for him.
So he was looking for a way to change how he spent his time, even though he enjoyed his work.
He was good at running the business and managing his team, but he was exhausted after over 20 years in the industry and wanted to make changes to his daily life.
His wife was working part-time in a job she didn't like, so he wanted to help her find something else.
On top of these, he also wanted to make these changes without significantly lowering their standard of living.
When he came to us, he felt down about what to do next. But after joining our community, he learned about investing in "alternative" assets, which are backed by real property and provide a reliable source of income.
By putting a small amount of his money into these types of investments, he set himself up for success in a short time, around 18 months to two years.
Now, he feels ready to make big decisions about the future of his business and work.
This client of mine used to feel overwhelmed and exhausted. He would tell me that he couldn't keep going like this. But after investing in alternative assets, he feels like a weight has been lifted off his shoulders. He doesn't feel as burned out anymore.
He realised that maverick thinking was necessary if he wanted to change his life, and this new way of thinking has helped him make positive changes.
I'm telling you this story because most people believe that the best way to retire is by saving money consistently until you're 67 years old.
The Two Questions I Encourage My Community to Think About
But if you're willing to be different and open to being a maverick, I want to share some ideas with you.
There are two important questions I encourage my community to think about.
The first one is whether being a maverick appeals to you, and if so, how can you do it while staying safe?
This could mean you should not take reckless investment decisions that may put your money at risk to chase high returns.
The second question is about making mental changes that will help you feel comfortable with being a maverick, which involves shifting your mindset and letting go of old ways of thinking about money and retirement.
Being a maverick is challenging because you may feel isolated, even among your friends.
Some people may think you're crazy for not following the traditional way of doing things, so you must be strong enough to handle their criticism and continue pursuing your own path.
Three Key Traits of a Maverick Investor
I want to reference a great book called "Richer, Wiser, Happier" by William Greene, an excellent journalist.
For several decades, he has interviewed over 40 of the world's most successful investors, including billionaires and multi-millionaires.
In this book, he shares the secrets to their wealth and business success, and in some cases, their life lessons as well.
There are three important things I want to share about being a maverick that I learned from the book.
First, you have to be willing to think differently from others, which means not worrying about what others think of you.
A good way to start thinking more unconventionally is to remember that most people tend to follow the crowd, and their opinions are often influenced by what they read or hear in the news.
If you keep this in mind, it can help you forge a different and unique path for yourself.
Unorthodox thinking means separating yourself from the masses, and a good starting point for that is to realise that most people tend to follow the herd.
People often act and think like sheep without really questioning things.
This doesn't mean to offend anyone, but the truth is that people are often willing to blindly follow the advice of so-called experts without doing their own research.
So the first step in cultivating this trait is to start questioning the status quo and not just following the crowd without consideration.
The second trait is humility, which means staying grounded and not becoming overconfident in your ability to invest.
Remember that your success as an investor depends on your latest investment decision.
Some investors have suffered massive losses because they thought they could do no wrong and became too confident. This led them to make fatal mistakes that set them back, sometimes even worse than square one.
So if you want to be a maverick investor, adopting a humble mindset is a critical step.
The third important attribute for anyone who wants to be an independent thinker is high emotional resilience.
This means staying calm and sticking to your plan even when the market is going through tough times, like when prices are dropping. You must remember that markets move in cycles, and the best investors have the ability to stay the course even when things get rough.
This concept is talked about in William Green's book and is something that many successful investors have in common.
The extension of this is a willingness to digest and experience loss.
Many people I have worked with have struggled with things they've lost, big or small, and being able to learn from those experiences and keep going is important.
Even though I have faced some tough losses, I chose to keep going, and it taught me a lot about being resilient and persistent.
Okay, I want to leave it here. I hope what I've said has made you reflect on your wealth-building journey.
If you relate to being someone who takes risks and does things differently, I hope you'll use the advice I've given to help you make smart investment choices.