"The person who follows the crowd will usually go no further than the crowd. The person who walks alone is likely to find himself in places no one has ever seen before."
The greatest achievements often have the most unusual paths—precisely why they become so special. If everyone took that path or shared a similar vision or dream, the idea wouldn't be groundbreaking or extraordinary.
While I find this philosophy has held true in my own life, I also find it an incredibly valuable perspective for investing and building wealth to live comfortably. Here are a few reasons why:
Following the Crowd Obscures Your Path
Often, I've heard friends and clients complain about their high levels of dissatisfaction with their career, their workplace or their managers, However, when asked why they don't quit, they almost all offer the same response, "Well, I've been there for so long, what else would I do?"
The answer is something meaningful and fulfilling.
When I left Edward Jones in 2012, there were many who thought I was making a mistake. However, had I let the opinions of others prevent me from leaving to build something of my own, I would have never experienced the joy I feel in my work every day. Seeing my clients succeed has always invigorated me, and I believe our full potential is realized when we're doing what we enjoy and believe in.
Similarly, we should never pursue a particular investment strategy because "everyone else is doing it." Just because everyone's doing it doesn't mean they're doing it right. James G. Rickards, lawyer and investment banker, explains one such scenario in an article in The Daily Reckoning:
"If markets are crashing, most investors will panic and dump stocks rather than look around for so-called bargains. More often than not, human behavior tends to amplify extreme movements rather than calm them down."
By abandoning our plans and our original strategies at the first sign of struggle, we're likely setting ourselves up for failure. In fact, it's precisely those downturns that provide opportunity for us to find mispriced assets in the market and benefit in the long run. Regardless of what everyone else is doing, you must remain true to your principles and the strategies you decided upon when you launched your long-term investment plan.
The Crowd Will Limit Your Capabilities
One of the worse consequences of following any crowd is that it limits – and often stops – your growth potential. Inertia is a powerful force; it keeps us content in shuffling our feet along the same old beaten path. But it can be overcome. Our dreams and ambitions pave our path for success. Battling against contentment and complacency is often the key to realizing our ultimate goals in life. However, our goals may require us to step out out of our comfort zones and try something unusual.
These principles apply to investment strategies as well. If you're determined to only invest in absolute, proven commodities, you're likely limiting the capabilities of your portfolio. Sure, we're protecting ourselves from possible future failures, but we're not giving ourselves the chance of reaching our full potential. Warren Buffet, arguably the greatest investor of all time, once said,
“Most people get interested in stocks when everyone else is ... You can’t buy what is popular and do well.”
This is where risk and risk tolerance come into the equation. Not every opportunity will be clear-cut, nor will they all be massive successes. Diversifying our assets and taking calculated risks often lead to some fantastic rewards. If we can take risks with sound and logical reason, then we set ourselves up for great opportunity.
Gather the Greatness
Somewhere along the way, words like "unique" and "maverick" became negative. The truth is, today's world needs more mavericks. There are numerous situations in which we need decisive leaders and audacious thinkers determined to reach unthinkable heights. Live your life with decisions you can always stand behind – financial and otherwise – and you'll never be afraid to walk your own path.
John Lindsey is President and CEO of Lindsey & Lindsey Wealth Management. After years of experience in executive leadership and finance, John founded Lindsey & Lindsey Wealth Management in 2012 to better serve his client base with an expanded universe of investment offerings. His biggest piece of advice is to always stay true to yourself and never compromise when that compromise would endanger your principles.