Don’t Fall for This: The Truth Behind Invest Like the 1% Gimmicks [Ep. 20]

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About This Episode

“Invest like the top 1%.”
It’s a phrase that’s everywhere right now, used by influencers, fintech platforms, and self-proclaimed wealth coaches who boldly promise access to strategies once reserved for the ultra-wealthy.

In this episode, Robert and Sebastian take a hard look at that claim. And more importantly, they revisit a far better question: Why are we investing at all?

Is it to brag about the next big score… or to actually reach a long-term goal?

What unfolds is an honest conversation about what wealthy people often do, how certain types of products are marketed, and how everyday investors can avoid traps disguised as “exclusive opportunities."

The Myth of the 1% Playbook

There’s a mystique around the idea that the ultra-wealthy invest in secret ways the rest of us can’t touch. Exotic strategies. Exclusive deals. High-octane returns.

But as Robert and Sebastian point out, that image doesn’t hold up.

In reality, many truly wealthy investors are surprisingly… boring. Their portfolios are built on blue-chip stocks, index funds, bonds, and long-term discipline. They typically aren’t chasing 20% returns in private deals or checking for the next speculative home run. They’re compounding steadily, with tools anyone can access.

So why does “invest like the 1%” have such a pull?

Because it’s marketed to feel exclusive, like you’re joining an elite club. But exclusivity on its own does not indicate whether an investment is appropriate or aligned with someone’s goals.

How Risky Products Get Dressed Up as “Safe”

One of the biggest concerns the guys discuss is language. Words like institutional, collateralized, alternative, democratized access sound secure and sophisticated. They’re meant to. These terms soften the edges of products that may be risky, illiquid, or complex.

And that complexity is part of the problem; investors can’t evaluate what they can’t fully understand. If the only thing that feels clear is the return being advertised, that can be a signal to proceed cautiously.

Leverage makes these products meaningfully riskier. As Robert says, borrowing money to invest can boost gains, but it can also accelerate losses fast. That’s why Warren Buffett’s famous warning, “The three ways to go broke are ladies, liquor, and leverage”, still holds up.

A Real-Life Cautionary Tale

A recent CNBC investigation perfectly captures how these pitches can go wrong.

They highlighted a platform that marketed private investments, real estate deals, specialty credit, and art-backed loans under the banner of “invest like the 1%.” The promise: the potential for higher returns, exclusive access, and a smarter alternative to the public markets.

One investor profiled had put nearly $400,000 into two deals, both promising 20% returns. A few years later, one of those investments is now a total loss, and the other is asking for additional capital just to keep the project afloat.

And this wasn’t an isolated case. Many deals reviewed had either defaulted or were on a watchlist, according to publicly available reporting. Even the platform’s own reporting sometimes didn’t clearly present the extent of the losses until they were publicly questioned.

It’s a reminder that the words “private,” “exclusive,” or “institutional” do not, indicate on their own, the actual risks involved. And what can go wrong matters a lot more than what could go right.

Why “Exciting” Returns Often Lead to Worse Outcomes

One of the strongest moments in the episode is when Robert walks through a simple example:

Imagine two investments:

• One earns a steady 7% every single year for 20 years.
• The other swings wildly, up 21%, down 7%, up 21%, down 7%, repeating over the same period.

Both average a 7% return on paper. Yet the steady one ends far ahead.

Why? Because volatility quietly erodes results. When you lose money, it takes a lot more to climb back out of the hole. Your average return isn’t what grows your wealth, your compounded return does.

This is why “boring” tends to work. Consistency compounds. Chaos doesn’t.

Navigating Alternatives Without Derailing Your Plan

The takeaway isn’t that all alternative investments are bad. Some can have a place within a plan. But they need to be understood, sized appropriately, and evaluated with a clear view of risk.

And if something promises outsized returns with little explanation, limited transparency, or a glamorous narrative attached to it, that’s when caution should kick in.

Robert and Sebastian emphasize that investing isn’t about chasing excitement. If someone wants excitement, there are a thousand places to find it. A long-term portfolio typically benefits more from discipline than from speculation.

Singles and Doubles Win the Game

The guys end with a baseball analogy, an apt one. Wealth is rarely built by swinging for home runs. It’s built through singles and doubles, through consistency, patience, and protecting yourself from the big strikeouts that can set your goals back by years.

Many wealthy people have built their net worth by:

• owning or building a business,
• investing in equities for decades,
• or inheriting money.

Not through one magical alternative investment that promised the moon.

If you’re investing to reach a goal, like retirement, security, or freedom, boring is not only acceptable. It’s powerful.

Watch the Full Conversation

This recap only scratches the surface of the stories, math, and insights in the full episode. If you’ve ever been tempted by a “private deal” or a flashy pitch, this one’s worth your time.

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GDS Wealth Management (“GDS”) is an investment adviser registered with the Securities and Exchange Commission (“SEC”). Registration does not imply a certain level of skill or training. This podcast episode and recap are for general informational and educational purposes only and do not constitute personalized investment advice. The views expressed by the hosts are their own and may change over time. Any examples or illustrations discussed are hypothetical and for explanatory purposes only, and they do not reflect actual investment results. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. No investment strategy— “boring” or otherwise—can ensure a profit or prevent a loss. Discussions of private or alternative investments are not recommendations and may not be appropriate for all investors. Listeners should consult a qualified financial professional before making any financial decisions. For additional information about our services, fees, and disclosures, please visit www.gdswealth.com.