Why Average Returns Are Lying to You

Have financial advisors and the entire financial industry been lying to you about your returns? The truth might shock you.

Most people are told their investments should earn 10%, 12%, or even more annually if they just “stay the course.” But there’s one little problem with that…

They’re quoting average returns not actual returns.

Let me explain why that difference matters more than you think—and how it might be costing you your future.

Average vs. Actual Returns: The Trap

Imagine this: You invest $100,000.

• Year 1: You lose 50% (now you have $50,000)

• Year 2: You gain 50% (now you’re at $75,000)

You averaged 0% over two years. But you actually lost 25%.

See the problem?

This is the kind of math sleight of hand the financial industry has used for decades. As a former financial advisor, I was trained to use these numbers. I didn’t question it until I started digging deeper.

What the S&P 500 Really Delivers

Let’s use real data. Over the last 40 years, the S&P 500 has averaged around 11.2%.

But when you run the actual numbers start to finish, compounded—the real return is closer to 9.3%.

Now move that window just a few months and guess what? It drops below 9%.

That might not sound like a big deal, but compounded over decades, it means you could end up with half as much money as you expected. Literally.

The Retirement Risk No One Warns You About

Most people base their retirement plans on these inflated averages. But if you hit a bad year or two early on, your portfolio may never recover especially if you’re withdrawing income at the same time.

Even worse? Many of the financial “gurus” still preach pulling out 8% annually, when actual returns barely hit 8% in the best-case scenarios. That’s a recipe for running out of money.

So What Can You Do?

I ditched Wall Street long ago for something better real, tangible assets like passive income from real estate and private lending. I know when I’m making 10%, because the money hits my account.

It’s not about chasing hype. It’s about control, stability, and freedom.

And if you’re wondering where you stand right now…

👉 Try the Passive Income Calculator. It’ll show you how fast your money could start replacing your income and how close you may already be to financial freedom.

Final Thoughts: Question Everything

The financial industry loves selling certainty. But in the real world, averages don’t pay the bills actual cash flow does.

So ask yourself:

Are you basing your future on marketing hype… or real results?

You deserve better.