I have been asked to answer countless questions about money and investing down the years. A subscriber recently asked me about what are some of the brutal truths about money-making and investing, including some which I don’t want to believe are true.

Here is a list.

Table of Contents

1. If you aren’t wealthy at 20 it isn’t your fault. If you aren’t by 70, it probably is

Nobody is wealthy at twenty unless they inherited the money or got rich quickly, which applies to less than 0.1% of people that age.

Wealth takes longer to build up than a decent income, because of the process of compounding. This, however, leads me to the main point.

If you are living in a developed, or relatively developed country, there is no excuse not to be wealthy by retirement, unlike people living in poorer countries.

Let me give you a simple example. If you invest, on average, just $100 a month from age 18 until 68, you will be worth $1.5m if the S&P500 matches its historical return……when I had a part-time job in a restaurant as a teenager I could afford to set aside 70GBP a month!

If you invested just $200 a month throughout this time period and added a one-off $50,000 from an inheritance or bonus, you would be worth over $2.5m, which would be well over $1m in today’s terms.

These figures are deliberately conservative – for plenty of people a more aggressive strategy is possible.

Bill Gates says it best below

2. Excuses don’t wash

I am sure some people read the first section and started thinking “well what about Mark or Cindy who both had heart attacks at age 26?”.

Yes, of course, we can always find exceptions to the rule. Life happens to us all. If I told you every single tiny detail about my life, your reaction would probably be “wow, he has had so much good and also bad luck”.

Good and bad luck usually even out over a lifetime. With a few exceptions, people look for the easy way out and make excuses.

I noticed this during Covid-19. During the start of lockdowns, there were two types of businesspeople – those who saw it as an opportunity and people who cried about it and begged governments for help.

The former sometimes made more money during lockdowns than ever before, because they pivoted.

They were the restaurants that had good online strategies, the consultants who started e-consultations, and the financial companies who did webinars. Then there were those who blamed Covid, and lockdown, for “not being able to meet people and make money”.

I have witnessed the same when it comes to unfortunate life events. Somebody very close to me died this year.

A few hours later, I was back to working in business, and that month was one of my best on record from a business perspective, despite the heartache. Others would, no doubt, have blamed such an event for a lack of performance.

I also notice the same commonality in sport. The best performers can perform under almost any circumstances.

Cristiano Ronaldo’s game didn’t dip when he was accused of rape and was taken through the Spanish courts on suspicion of tax evasion.

Others who are less mentally tough and would blame such events for a dip in form. In reality, mental toughness can be more important than skill in numerous domains – business, investing, and sport.

3. Your ideas are worthless

And mine are too. Ideas don’t pay the bills. Execution does. So, executing great ideas, with persistence, can be worth millions and occasionally more.

Everybody has million-dollar ideas. The book below, written by a gentleman who secured a deal on Shark Tank, has an excellent section where he “gives away” ideas for free.

He did this to illustrate a point. It is a misconception that the world is full of opportunists who will “steal” your idea. The world is actually full of procrastinators, who either don’t start an idea and certainly don’t finish it.

A few years ago I watched a Gary Vee video where he suggested that Tik Tok would become the next big thing.

He started the talk by saying “I know that 98% of you won’t do anything about this talk, and half of that 2% will give up quickly”.

Despite this, people seem to place a great deal of emphasis on ideas. Some people will even break off friendships because their friends “stole that idea from them”.

4. Life isn’t fair – nor is investing or business

There can be two people. Both could have the same product and service, and yet one knows how to market it better.

That person could end up earning a hundred times more. It isn’t fair, but it is life. Likewise, you will also sometimes see people with less knowledge, experience and education outperforming you.

Learning from them, rather than complaining, is the best policy.

5. Your procrastination could be costing you dearly

As per the first point, it is quite easy to become wealthy over time, if you start early. You will never be younger than you are today.

Procrastination can indirectly cost you millions, as each decision compounds over the years.

6. Your home isn’t an investment

At least it usually isn’t an investment. A house is a place to raise a family. It can be cheaper than renting, but not always.

The only time it is an investment is if you downsize in retirement, and get lucky with valuations. If you want to use housing as an investment, try rental properties, rather than a primary residence, instead.

7. Taking advantage of luck is important

We all get good and bad luck. Coming back from the tough times, and taking advantage of the good, can be vital.

Most people get complacent after a good run. Andy Groove has a great quote, which I have put below:

Success certainly breeds complacency. About 78% of former professional footballers go bust, as do nearly half of lottery winners.

The same applies to business. Some of the most successful cold callers in the 1980s are probably struggling to make money now, due to the way things have changed.

We can also expect what is working now, in 2021, not to work as well come 2023 or 2025.

8. Having a high income won’t make you wealthy

As a follow-up to the last point, plenty of high-income people go broke. You can’t outrun a bad diet.

You also can’t out-earn awful spending habits and lack of financial planning.

9. Nobody cares.

Nobody cares about how many years of business experience you have, at least after five years has passed.

Few, if any, any longer care about how you dress. I often do meetings in my pajamas if it is late at night. Even fewer care about your professional qualifications.

People don’t even really care that much if you have any scandals. Today’s scandal is tomorrow’s fish and chip paper.

People want credibility, but that doesn’t mean they care about the things you assume they care about.

10. Over-performance won’t last forever.

In the 1990s, quite a lot of do-it-yourself (DIY) investors beat the market hands down. The majority suffered badly during the 2000-2002 down market.

These days, a lot of investors have got lucky picking Tesla or some other investment. They think this luck will last forever. It won’t.

11. Being comfortable is an issue

Nothing good comes from the comfort zone. The most profitable things I have ever done haven’t been comfortable.

Breaking industry norms, even when many people thought I was mad to do so, was the best business decision I have ever made.

In the same way that you know that a stock is overvalued if everybody seems to be talking about it at parties, you should be worried about your business practices if everybody seems to be copying and executing.

Conversely, if nobody else is executing an idea, that is a good sign that you should be one of the first to try it out. People are often afraid to do this due to familiarity basis.

Familiarity basis also means that many investors prefer gold if they are from India, or property if they are from Australia or Singapore.

Just because something is familiar, and therefore makes you feel comfortable, doesn’t mean that you should invest in it for that reason.

12. There is no such thing as no risk

Most people keep money in the bank because they think it is safer. It isn’t. 100% of people who have invested in a broad-based ETF, such as MSCI World or the S&P500, have made money (even adjusted for inflation) if they have held on for decades.

Even somebody who bought one day before 2008, or 1929, would have made a lot of money. In comparison, every single person who has kept money in the bank since the Global Financial Crisis of 2008 has lost to inflation.

What is more, over half of the world’s countries have faced severe inflationary or currency crises in the last few decades. Plenty of people have lost it all in cash.

As a final comment about risk, it is always better to take it when you are younger, when you have less to lose.

Many people are risk-adverse when they have nothing to lose, often due to well-meaning parents and teachers.

13. Many people don’t want you to succeed

Many people don’t want you to succeed, at least if that success becomes big. Most people will be happy for you if you get a new job after being unemployed for a year.

Few people will become happy if you become a self-made multi-millionaire, even though some of the naysayers will say they always believed in you.

14. Everybody wants to get rich but criticize them at the same time

So many people criticize “the rich”, often due to misleading media articles. At the same time, most people, deep down, want to become rich, and not just comfortable as they often claim.

It is as ironic as the sight of people protesting against Amazon when we all know half of them will probably use them later that evening.

15. Working hard is important, but working smart can be vital

Working hard can get you inside the top ten percentile if you are in the right career or business. That is because most people either don’t work hard, or do for a short period of time.

If you want to get inside the top one or two percentile, you will probably have to work hard and smart unless you have inherited a lot of money.

Once you are already successful, it is true that you can outsource more and be smarter with how you use time, as per Tim Ferris’ famous Four Hour Work Week.

Getting to that stage where you can “only” work smart takes a decade of hard work or more.

16. Your thoughts at a young age can affect your life outcomes

Margaret Thatcher once said, “Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become your character”.

Politics aside, I have noticed how true that quote is. When I look back at my university colleagues, those who had a particularly negative view on capitalism and the market tended to go into academia, teaching or in some cases actually did badly.

Those who, in comparison, had positive views about the market, risk-taking, and money-making, are now more likely to be successful, happy, and lacking in venom.

That doesn’t mean that everybody should go into business. Becoming an academic might suit your character better than starting your own business.

Merely, your thoughts can become a self-reinforcing prophecy. If you believe the market system is bad, you probably won’t do well in it.

If you assume that your ethnicity, class, gender or religion will hold you back, it probably will, because you will get despondent and depressed at the first sign of discrimination.

Conversely, if you assume it won’t hold you back, it probably won’t stop you succeeding.

17. You will forget what you learned at university

What is more, going to university won’t automatically help you earn more. It can help if you learn how to learn, rather than focusing on just retaining information that you will forget.

18. Saving without a plan probably won’t work

Interest rates are 0% – therefore saving will result in losses. What is more, it is boring for most people. As a result of that, if you merely save without a plan, you will probably give up.

People tend to only invest for decades because it is usually linked to a wider goal such as retirement.

19. If you work for somebody else your income is always capped

No matter how high your skills are, your income is capped when you work for somebody else. When you get paid on performance or start your own business, things change.

At the same time, starting your own business is not easy, and most people don’t have the temperament to succeed in making more money independently compared to their existing salary.

20. Be careful who you associate with

Most people wouldn’t deliberately associated with an extremist or criminal. Despite this, many people will spend time with those who will drag them down.

There is an issue with this. If you put awful food in your body, you are more likely to get sick.

Likewise, if you spend time surrounded by positive influences, your mental health will improve, and so will your performance.

One of the best decisions I made at a young age was to emigrate and move around early few years. It gives you new, positive, influences. It makes distancing yourself from other people easier.

If you do stay in your home town all your life, it is harder to change your circle to a more positive one, but very possible, especially in the digital age where you can meet people online in activities like online masterminds.

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Adam is an internationally recognised author on financial matters, with over 584.6 million answers views on Quora.com and a widely sold book on Amazon and a contributor on Forbes.