It’s Not Just About Beating the Market
Many investors place a heavy emphasis on outperforming the market. However, as Peter Mallouk aptly noted, that is not the primary goal of investing. While beating the market may feel rewarding, it is not the true measure of success. The real purpose of building wealth extends far beyond simply chasing better returns than an index or a friend’s portfolio.
Wealth Is About Freedom
The ultimate goal is to achieve a level of financial security that grants you freedom. This could mean freedom from a traditional job, rigid work hours, or the ability to retire early. Wealth provides flexibility and allows you to take care of your family, decline commitments you don’t want to partake in, and live life on your own terms.
Chasing Returns Is Not the Only Path
Constantly striving to outperform others or the index can create unnecessary pressure. What truly matters is whether your portfolio supports your personal goals. Even if your returns aren’t the best, as long as they help you reach your financial comfort zone, that is success.
You Might Never Use It All
Interestingly, most people will not end up using a significant portion of their accumulated wealth. As we age, we often realize that much of our wealth acts as a mental cushion, providing peace of mind or preparing for unexpected events rather than being actively spent.
Focus on the Bigger Picture
Recognizing this can help alleviate anxiety about performance. The urgency to beat the market becomes less relevant when the emphasis shifts to building a meaningful and secure life. Ultimately, the goal is not to achieve the highest return but rather the right return for your life’s needs.
What do you think, should we continue chasing returns, or should we shift our focus to the real purpose of wealth? Please share your views in the comments below! If you found this blog informative, don’t forget to SHARE it with your friends!
