This article is a written adaptation of the video available on our YouTube channel, LIFE180.

The #1 thing holding you back 

One key aspect of my life, which you might already know if you’ve followed my content, is that my wife has been on a recovery journey since 2009. That year, she made the life-changing decision to become clean and sober, overcoming her struggles with substances, behaviors, and other elements tied to addiction.

Recovery, as many understand, is not a destination but an ongoing journey. For my wife, it involves consistently attending meetings and dedicating herself to personal growth. This unwavering commitment has become a cornerstone of our daily lives, shaping our priorities and strengthening our shared values.

That being said, one of the most important lessons I’ve learned from her journey and our experience with this process is the significance of the first step: recognizing and admitting that there is a problem. This act of acknowledgment lays the foundation for any meaningful progress and serves as a powerful catalyst for change.

Similarly, when it comes to managing our finances, the first step mirrors that of recovery: admitting there is a problem. Recognizing and clearly identifying the issue is crucial. It’s about gaining clarity on the nature of the problem so we can address it effectively and begin making meaningful changes.

Before we can explore solutions to improve financial efficiency, it’s essential to first acknowledge the existence of the problem. Understanding exactly what the issue is allows us to create a clear and actionable plan to address it. With that foundation in mind, let’s dive right in and discuss the problem at hand.

Problem 1 - Your Money Is Not In Alignment With Your Values and Beliefs

One of the key points I often emphasize is that the biggest financial challenge many people face is a lack of alignment between their money and their core values and beliefs. I consider this issue so fundamental that I rank it as the number one problem.

We’re conditioned to follow a conventional path (go to school, secure a job, invest in a 401(k)) but the truth is, this approach isn’t working for most people. The results speak for themselves: the financial outcomes many are experiencing today are alarmingly poor.

I strongly believe in questioning the "why" behind the financial advice we’ve been given. Why were we taught to go to school, get a job, and invest in a 401(k)? The simple answer is that this approach worked for previous generations. I’m 44 years old, born in 1980, and if you examine the period from 1980 to 1999, this was when my parents were building their careers, saving for retirement, and following these traditional financial strategies. At that time, these methods aligned with the economic landscape and delivered results.

This period, spanning from my infancy to my college years, was naturally when my parents influenced my understanding of money. However, they didn’t teach me much about it, primarily because they weren’t particularly skilled with finances themselves.

That said, when we step back and take a broader view, it’s clear that societal beliefs about money (such as the emphasis on 401(k)s, pursuing education, securing a job, and investing in qualified plans) stem from the norms and practices of that era. These beliefs were deeply ingrained, shaping financial habits and expectations for generations.

The reason these beliefs took hold is tied to the market’s remarkable performance from 1980 to 1999. During this period, the average annual return was about 13.8%, which is extraordinary. Adjusted for inflation, it still stood at an impressive 9.4%. This was a dramatic improvement compared to the long-term average of approximately 4% from 1929 to 1979, or even the more modest 5.2% average from 2001 to 2024.

These numbers highlight why so many people cling to the 9.4% return as an expectation for market performance. Financial advisors often cite projections like the S&P averaging 8.1% over the long term, and if you factor in reinvested dividends, that number increases slightly. However, these assumptions are based on historical anomalies rather than the consistent, more conservative trends of market performance.

The issue, however, is that if you remove the period from 1980 to 1999, which many consider to be an outlier or even a bubble, the numbers tell a very different story. The reason this period is seen as a bubble is due to the dramatic drop in interest rates. In 1980, interest rates were as high as 19%, and by 2009, they had plummeted to near zero. From 1980 to 2009, interest rates consistently decreased, which had a profound impact on the economy.

As interest rates fell, it helped stimulate economic growth. Lower rates make borrowing cheaper, which encourages spending, investment, and overall economic activity. This environment inflated asset prices and created a situation where the market could achieve unsustainably high returns, which many have come to expect, despite the fact that these conditions are not typical.

Now, with interest rates needing to remain flat or even rise, the strategies that worked in a declining interest rate environment are no longer as effective. The dynamics change entirely when rates are increasing. In periods of rising interest rates, the approaches that are successful (such as those focused on debt reduction, yield-focused investments, and adjusting to inflationary pressures) are vastly different from those that thrived during periods of falling rates.

This shift emphasizes the importance of continuously asking, "Why are things happening the way they are?" By understanding the underlying factors at play, we can adapt our strategies to align with the current economic environment, ensuring more informed and effective financial decisions.

So, the first key issue here is about questioning the underlying assumptions. I want to challenge you to think critically. There's a great book I often reference called The Ant and the Elephant by Vincent Pacente. The central idea of the book is that the human brain can only invest 100% effort into something if you truly believe, with complete certainty, that you have the opportunity to succeed.

This concept is powerful because it highlights how our mindset shapes our actions. If we don’t believe in the possibility of success, we’re less likely to fully commit to a goal or strategy, no matter how much effort we put in. This is a crucial consideration when reevaluating our financial approaches and how we align them with our values and expectations.

With that in mind, many people are grappling with uncertainty about various aspects of their financial lives. They might ask themselves, "What do I really believe about taxes, government debt, inflation, or even geopolitical stability?" Right now, a lot of people are feeling uneasy about these issues but can't quite pinpoint why.

They might think, "I’m contributing to my 401(k), investing in a Roth IRA, or saving money in different ways," but there’s still a sense of discomfort or doubt. Perhaps, you're even questioning whether you're sabotaging yourself by not taking more action.

The underlying issue is that, subconsciously, if you don’t fully believe in the financial strategies you're following, it’s a reflection of the misalignment between your money and your core values and beliefs. To move forward, it’s essential to get crystal clear on what those values and beliefs are, so that your financial decisions align with your true priorities and goals. Without this clarity, it’s difficult to feel confident in the choices you make.

In my next video on the LIFE180 YouTube channel, I'll dive into how you can take the first steps toward creating your core values. How do you define a clear vision for your life? How do you craft a mission that guides your decisions? And most importantly, how can you reverse-engineer this process to use your money as a tool to build the life you truly want to live? That’s the essence of it all. It’s about being intentional and aligning your financial choices with your deeper values and long-term goals. This is what it all comes down to.

What I’ve just shared with you explains why there’s so much confusion around financial strategies today. We’ve been receiving mixed messages, largely because our parents’ generation, including mine, lived through that unique period. You might be a bit older or fall somewhere in between, but the reality is that for the past 20 years, we've been operating under a paradigm shaped by that one remarkable time.

When we step back and look at the broader historical context, it’s clear that this was just a fleeting moment in time, and replicating it in today’s economy is almost impossible. This creates a disconnect between past expectations and present realities.

Many people are still holding onto the expectation that the market will return to the conditions of that 20-year window. They point to historical averages, like the S&P 500's 8.1% return over time. But here’s the reality: if you remove that exceptional 20-year period, the long-term average for the S&P 500 drops to around 4.9%.

This stark difference underscores the importance of stepping back and looking at the bigger picture. We need to understand the broader economic forces and the unique factors that drove past results, as they may not be repeatable in today’s environment.

Understanding these factors helps us make better decisions moving forward. That’s why it’s important to take control of our finances, by doing so, we can align our strategies with today’s realities instead of relying on outdated systems.

Problem 2 - Focusing On Rate of Return and Not Rate of Result

Reason number two for financial inefficiencies is that people focus too much on the rate of return, which leads them to give up control of their money. As I’ve mentioned in other articles and videos, the new ROR should be the "rate of result." We need to prioritize achieving our desired outcomes faster. This shift means moving away from traditional methods like accumulating money in a 401(k) or Roth IRA, and instead, focusing on gaining control, building a stable financial foundation, and creating opportunities to invest for cash flow.

The problem is that when you hand over control of your money to places that don’t align with your beliefs, your subconscious will naturally sabotage you. As Vincent Pacente explains in “The Ant and the Elephant”, your conscious mind operates at about four million neurons per second, but your subconscious mind fires at a staggering four billion neurons per second.

To put it in perspective, it's like an ant sitting on an elephant’s head, thinking it has the power to steer the elephant. This vast difference shows how much more influence your subconscious has over your decisions.

When we make conscious decisions, like going to school, getting a job, or investing in a 401(k) because we’ve been told it’s the right thing to do, our subconscious might be sending out a warning signal: "This doesn’t feel right." That’s when self-sabotage happens. We need to be aware that the issue lies in how our financial structure, efficiency, and control are not aligned with our deeper values and beliefs. Until we address this disconnect, it’s difficult to move forward with confidence and success.

When we make conscious decisions, like going to school, getting a job, or investing in a 401(k) because we’ve been told it’s the right thing to do, our subconscious might be sending out a warning signal: "This doesn’t feel right." That’s when self-sabotage happens.

We need to be aware that the issue lies in how our financial structure, efficiency, and control are not aligned with our deeper values and beliefs. Until we address this disconnect, it’s difficult to move forward with confidence and success.

Focus on Financial Structure and Controlling Opportunity Cost

When we save money, there’s an opportunity cost, the potential gains we miss out on from investing that money. Similarly, when we invest, we sacrifice the ability to save. Managing opportunity cost in your life is crucial for financial efficiency. We can’t just look at investments, expenses, or lifestyle choices in isolation. We need to consider the bigger picture and how every decision impacts our cash flow and our ability to reach our goals.

Now, imagine if there were a way to have the best of both worlds: to pursue great opportunities and the life you want while still saving for the future, without sacrificing your current lifestyle. On a scale of one to ten, how interested would you be in learning how to achieve this?

Hopefully, that makes sense. We’ve identified the core problem: your money is not aligned with your values and beliefs, you lack control, and you may not fully understand the opportunity costs across all areas of your life.

The good news is, we’re going to show you how to address this. We’ll guide you in building a financial structure that not only protects you from potential downsides but also positions you for the best opportunities to increase your cash flow and achieve your financial goals faster.

Have a blessed inspirational day.