490: Investing Tips with David McKnight

Let’s talk about a fundamental difference in the way traditional investors think versus those of us who invest in alternative assets.

The traditional investor sees the stock market, bonds, and mutual funds as the safe and stable way to grow wealth over time. And look, stability is not a bad thing. But here’s the problem: how many people do you know who have become truly wealthy by just sticking with traditional investments? 

Sure, you can retire comfortably if you’re disciplined, but are you really changing your socioeconomic place in life with a 6% or 7% annual return? Probably not.

Now, alternative asset investors? We play a different game altogether. We know that the big wins in traditional markets are rare. 

In alternative investments, we aren’t just chasing stability — we’re chasing some level of asymmetry. Yes, we still face risks and sometimes we find ourselves in cycles like the last couple of years where we may lose, but the potential upside of alternative investing can be disproportionate to what you put in. These are the kinds of opportunities that can accelerate wealth creation far beyond what traditional investments can offer.

Think about it this way: the traditional investor spends their entire career trying to fill up a big cup of water — a portfolio large enough to sip from in retirement. Their hope is that they won’t run out of water before they die. That’s the game plan. Save enough, live conservatively, and pray the cup doesn’t run dry.

But for us as alternative investors — especially cash flow investors — the goal is fundamentally different. We’re not looking to hoard a finite supply of water. We’re building streams. Streams of cash flow that keep running no matter what. 

Streams that don’t dry up. Streams that allow us to live our lives without constantly worrying about running out. It’s a completely different mindset. It’s not about rationing — it’s about abundance.

The differences in this type of thinking become pretty clear in this week’s episode of Wealth Formula Podcast. Do me a favor, listen to this show until the very end. I was so baffled by this interview that I asked our own Rod Zabreiwski of Wealth Formula Banking fame to help me understand my confusion!