Question:
❓Two people invest the same total amount over 25 years and earn the same average return.
What can still cause one person to end up with much less money than the other?
A) Which company or app they use for their investments
B) The order in which they experience good and bad market years
C) Whether they use automatic deposits or manual deposits
D) How many different funds they own
Answer:
✅ B) The order in which they experience good and bad market years.
The order of your good and bad market years can leave one investor far behind another with the same average return—it’s called sequence-of-returns risk.
If a string of bad years hits right when you start withdrawing in retirement, the account shrinks faster and may never fully recover, even if the long-term average matches someone else’s. Why the other answers aren’t the main driver:
- A) The company or app you use may change your experience, but it doesn’t change the market’s returns.
- C) Automatic vs. manual deposits builds good habits, but doesn’t change when the market rises or falls.
- D) How many funds you own matters for diversification, but not when the average return is identical.
The timing of returns matters most once you start taking money out—which is why your plan needs a strategy for both the building years and the spending years.
We show you how to plan for both inside The World Changers Network.
