Let me be clear about what the stock market actually is and why it’s probably not your best path to financial freedom. This isn’t just my opinion – it’s based on decades of experience helping entrepreneurs build real wealth.
The Stock Market’s Original Purpose vs. Today’s Reality
The stock market was created for a legitimate purpose. Companies needed capital to grow, so they would go public through an IPO (initial public offering) to raise money for expansion. This was the primary market – where your investment dollars went directly to the company.
But today’s reality is completely different. Most companies now go public not to raise capital, but to take money off the table. It’s an exit strategy. The private market funds almost everything in the early stages, and by the time companies go public, the founders and early investors are looking to cash out.
When you buy stocks today, you’re typically buying in the secondary market – from other investors, not the company itself. You’re not funding innovation; you’re gambling on perception and hoping someone will pay more for your shares later.
The Hidden Costs Eating Your Returns
Let’s talk about the fees that silently drain your investment returns:
- Fiduciary fees (typically 1%)
- Expense ratios for fund management (around 1%)
- 12b-1 fees for marketing (0.5% or more)
- Legal and administrative fees
- Custodial fees
These might seem small, but they compound dramatically over time. I ran the numbers: Starting with $100,000 at a 10% return over 20 years would grow to nearly $700,000. But with just 2.5% in fees, that same investment only reaches about $425,000. That’s almost $275,000 lost – not to market performance, but to fees!
The System Is Rigged Against Individual Investors
Beyond fees, the system itself favors institutional investors. There’s dark pool investing where institutions buy at different prices than the public. There’s flash trading where supercomputers skim pennies off every transaction. There’s naked short selling that can crush small companies.
My research for a Forbes article revealed that 84% of stock market returns went to just 10% of investors. Why? Because sophisticated hedge funds use options trading, AI-powered algorithms, and teams of brilliant analysts to extract wealth from average investors.
Meanwhile, you’re told to “set it and forget it” and “stay in for the long haul” – which really means “don’t hold us accountable for performance.”
Financial Planners vs. Salespeople
Most “financial planners” pushing stock market investments aren’t planners at all – they’re salespeople. A true financial planner helps you save on taxes (not just delay them), sets up the right corporate structures, manages your cash flow, ensures proper risk management, and coordinates all your assets to work together.
Instead, most people get sold products without a comprehensive plan. If all you have is asset allocation between stocks and bonds, you don’t have a plan – you have a product.
This is why wealthy families use family offices with coordinated teams of CPAs, attorneys, cash flow experts, and risk management specialists. They focus on investments they understand and control, not just stocks and bonds.
My Approach to Building Real Wealth
I don’t invest in the stock market because it doesn’t match my investor DNA. I focus on businesses I control, intellectual property I create, and real estate I understand. Even though my net worth puts me in the top 1%, I don’t need the stock market to build or maintain wealth.
The key distinction most people miss is this: There are no risky investments, only risky investors. Risk comes from investing in things you don’t understand, can’t control, and have no exit strategy for.
For most people, the stock market is inherently risky because they don’t truly understand it. They’re automatically investing rather than deliberately investing after saving.
My philosophy is simple: automatically save, then deliberately invest in areas where you have knowledge, control, and an edge. This approach has created more wealth and peace of mind than any stock market strategy ever could.
The next time someone tries to guilt you into the stock market, remember that real wealth rarely comes from buying shares in companies you don’t control. It comes from building, owning, and growing assets that match your unique investor DNA.
