How to Invest Like the Rich According to Jerry Fetta

If you’ve accumulated some extra cash, you may have thought about investing. Whether you have a lot or a little, investing is an interesting and exciting way to grow your wealth. Perhaps, you are not much of a risk-taker, and the very idea of investing terrifies you. You don’t just want to throw your money away on an investment with no guarantee of success. You’ll stick to the stable bonds, thanks for asking. Maybe you like a little risk—or a lot. You find yourself gravitating towards more risk, more reward stocks.  

Whatever the method, one aspect rings true for all investors: you want to make money. With a litany of wealth management firms all offering to aid you in this quest, you may find yourself wondering which firm is best. Which firms can you trust with your hard-earned money, and how do you know that their methods work? Keep reading to discover how one founder and CEO has shaken up the financial advising world with his unique method.  

The Story  

After a quick stint as a personal trainer, Jerry Fetta reoriented himself to work in traditional financial advising. Once he found his footing in the wealth management world, he had an epiphany. He says, “Four or five years into the game, I start learning what wealthy people actually do, what the top 1% actually do. And I was likethis is nothing like what I’m telling people to do right now. 

He realized that what he was telling people what to do with their money wasn’t the most effective way to build wealth, it was just the most traditional. He left corporate America and started Wealth Dynamicswhich champions a new way to financially invest, modeled after what the top one percenters and Fortune 500 companies do. In only a few years, he grew his business from nothing to a multi-million-dollar company.  

The Discovery

Fetta first began with the idea to look at the past as a reference for the future. But how can what the rich did 100 years ago affect what we do today, especially in a field as ever-changing as finance? Yet, Fetta felt that if he could examine the data, he could find a pattern. And he did.  

Fetta started his process by studying a savings chart of the top 1% over the past one hundred years, from 1913 to 2013. The chart revealed that the wealthiest were able to save about 40% of their gross income, a shockingly high number. As he said, “It led me to ask, ‘Where are they putting it?  

In conducting more research, Fetta found another pattern. He discovered that the top 1% and Fortune 500 companies were placing their tier one capital (meaning, the highest caliber of their reserves) into whole life insurance. At first, Fetta was confused—he was always told that life insurance is a terrible investment. “This must be a mistake,” he thought. “Life insurance is the devil.”   

The Model 

When Fetta delved deeper into how whole life insurance was designed, he found that it has a very high cash value. What does he mean by this? He explains, “If I put in $1,000, I could borrow 900 of that 1000 today. […] And that $900 was still going to grow,” as if it were still in the account. Now, he realizes that this is a similar method to what banks do with your money. And now you can do it for yourself.  

Wait a minute—why was that high cash value important? In Fetta’s opinion, you can take out $700-900 of that $1,000 and use it to invest in something else, such as real estateall the while, still growing your original pile of $1,000. Listen to the podcast to find out more details on Fetta’s model for success and creating what he calls a “positive spread” between your interest rate and your annual compounding rate.  

The Concepts 

Once they are able to save that 40%, the rich spend their money differently from us. On the Making Bank Podcast, they discuss how the successful mindset reorients your view on investments, and how you need to acquire that view to amass your wealth in a more effective way. Perhaps you are told to look into mutual funds, your 401Ks, etc. But if the rich aren’t investing in those areas to amass their wealth, why should you? And, if so, where should you put your money?   

Fetta lists things such as real estate, small business equity, trusts, and life insurances as areas in which they invest. He notes that “60% of their net worth” is in small business equity. But what do these areas have in common? Firstly, the wealthy are interested in investments, not financial products. Secondly, they are looking to find investments that are tangible, something that they can control and has been proven to work time and time again 

The Mindset 

Behind all of this is the idea that returns back to the theme of the Making Bank Podcast: successful mindsets. The wealthy views investments in a different capacity than as we may doThey are thorough in their research, and they—or someone advising them—have intricate knowledge of how certain financial items are structured.  

Instead of accepting what they’ve been told, those who are successful dig deeper, as Fetta has done, than just the surface level. They push to know more. They care about the fine details and not just accept what’s easiest or most convenient 

While investing can sometimes gain a reputation of poor gambling, the wealthy view it in a different manner. They don’t always just ride on the newest, shiniest thing that comes along. They understand the balance of stability and risk. Whether consciously or not, the wealthiest of the past 100 years have continued the same pattern, over and over—and it has always worked for them. Why can’t it work for you? 

This is a Contributor Post. Opinions expressed here are opinions of the Contributor. Influencive does not endorse or review brands mentioned; does not and cannot investigate relationships with brands, products, and people mentioned and is up to the Contributor to disclose. Contributors, amongst other accounts and articles may be professional fee-based.

Tagged with: