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Mistake #3:


         Following the Crowd




         I suspect we have all been warned by our parents at one time or another about the
         pitfalls of following the crowd. For those of you who have kids, you may even
         have shared the exact same advice yourself. Of course, your children will probably

         push back  against  this  truism:  “But  mom,  everyone  else  is  doing  it!”  No  doubt
         your reply is the same as countless other parents before you: “If everybody was

         jumping off a bridge, would you jump too”?


         But  ask  yourself  this:  are  you  failing  to  heed  your  own  advice  or  that  of  your

         parents? Are you following the crowd? Before you answer, let’s consider some-
         thing very important. First of all, when it comes to the world of investments, if

         everybody is doing it nobody is doing it. Here are some sobering statistics:



         According to Forbes, the top 1% control 43% of all the wealth in the United States,
         and the next 4% control 29% of the wealth.* Basically, the top 5% control almost

         75% of the wealth, leaving crumbs for the “crowd to fight over.”
         *Source: Forbes.com 3/21/2012


         According to Statistic Brain:


          Out of 100 people who start working at the age of 25, by the age 65:

          Will be considered wealthy                                                               1

          Have adequate capital stowed away for retirement                                         4

          Will still be working                                                                    3

          Are dependent on Social Security, friends, relatives or charity                         63

          Are dead                                                                                29



         There’s  that  top  5  percent  again;  looks  like  the  crowd  is  heading  in  the  wrong
         direction. Rollo May, the distinguished psychiatrist, wrote a wonderful book called

         Man’s Search for Himself. In this book, he argues “the opposite of courage in our
         society is not cowardness, it is conformity. And there you have the trouble today.

         It’s conformity. People acting like  everyone else  without knowing why, without
         knowing where they’re going.”
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