What really keeps people from building generational wealth?
Many people assume the biggest obstacle to building long-term wealth is picking the wrong investment. But what if one of the biggest barriers isn’t market performance at all – it’s trust?
In this episode of Retire in Texas, Darryl Lyons explores why trust may be one of the most overlooked components of building generational wealth. He explains why long-term financial success is not about perfectly timing the market, but about staying invested long enough for the process to work. He also breaks down the three-part foundation he believes is necessary for lasting wealth creation: trusting the markets, trusting that your advisor is acting in your best interest, and trusting that your advisory team is competent.
But this conversation goes beyond investment strategy alone. Darryl also examines the emotional and behavioral side of wealth building, showing how doubt, skepticism, and broken trust can cause people to hesitate, pull back, or abandon a sound long-term plan altogether. By understanding both the practical and psychological barriers, listeners can begin to see why trust plays such a central role in financial decision-making over time.
You’ll learn:
• What Darryl believes is one of the biggest barriers to building generational wealth.
• Why long-term wealth building is not about timing the market perfectly.
• The three-part framework of trust he believes families need in order to stay invested.
• How broken trust can derail even a well-designed financial plan.
• Why fiduciary responsibility and advisor competency matter in the wealth-building process.
Whether you are trying to stay disciplined during market uncertainty, evaluate the strength of your financial plan, or think more intentionally about the kind of legacy you want to leave, this episode offers a practical framework for thinking about wealth through the lens of trust.
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Transcript:
Hey, this is the Darryl Lyons, CEO and Co-Founder of PAX Financial Group. And you’re listening to Retire in Texas. This information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. Okay, so I was reading a book the other day called The Missing Billionaires and it’s a good book.
I say it’s a good book. Don’t go out and buy it. I feel bad, discounting an author like that, but it is. It is a rough read for most people, me included. And I’m not putting myself on a pedestal by any means, but the financial jargon in there, you can get really lost. And it’s not just one of those things.
You just open up on a beach and just enjoy it. It’s almost like a research book. But there’s a really cool piece in the very beginning, like, honestly, this little piece of information is, to me, mind blowing. And I got to share this with you. And I hope you grasp it the way I did, at least to a certain degree.
Again, the book’s called The Missing Billionaires, and here’s the premise. So, 1900. Okay, you got to kind of frame this up. In 1900, there’s about 4000 millionaires in the United States. Now, let’s assume and it’s not a reach, that 25% of those millionaires had 5 million or more, could have had a hundred million, could have 10 million, but 25% had 5 million or more, multi-millionaires.
You know, the ones like the dads who had the like, groomed mustache, not the white mustache. These are the groomed ones with the ties and the vest and the moms who, what is a Corvette they had to use to the oldest daughter would have to put the Corvette on the mom. And then they do the family picture and then they go to brunch and those types of people.
I hope you can picture that. I kind of picture them on the upper deck of the Titanic. Those types of people, 5 million or more net worth. So that’s about a thousand people. So, about 1900, about a thousand people with this $5 million net worth number. So, you have to ask yourself if there’s a thousand people with 5 million or more net worth how many today then should be billionaires?
And it’s thousands upon thousands. Thousands, I think. I don’t know, maybe 1600 is the number. But regardless it’s depends on I guess what growth rate you use. But let’s say thousands upon thousands, let’s say 2000 doesn’t matter. There should be there should be several thousand billionaires today in the United States.
There are just about 800, according to Forbes. And the vast majority of them can trace their wealth to the 1900s. I don’t know if any of them can, really. I didn’t go that far. So where did all these, if there’s thousands and thousands of supposedly descendants of these, this $5 million club in the 1900s, that should be billionaires today.
They should have a legacy of being billionaires today. Where did they all go? Where are all these billionaires? And so, yes, bad business decisions, stupidity, divorce, substance abuse, dilution. There’re factors there, certainly. But there’s one factor that I think is understated and this book does touch on that, but it’s one that I would extrapolate based on my experience is that answers one of the questions of why there are so many people who fail to stay consistently invested over an extended period of time, decades.
Why are there so many people who fail to stay invested? Why? There’s even, you could even ask yourself like you can even I could blame myself. Like I should have put more money in when I was younger, and I should have left it alone. We can all, almost all of us, say that.
But this happens all the time. So, what is the, there’s a lot of roadblocks. Like I said, it’s stupid. Stupid behaviors, habits. Bad business. There’s a lot of things, but there’s one that I could probably say. Yeah, this is probably the main one. And so, I had to think about, like, what’s the main reason people can’t weather these cycles of the markets?
Or they even fail to get started. A lot of times it’s failure to launch or it’s failure to stick through the ups and downs, the bear markets and the scary times, the wars. What is it? Because a lot of these millionaires that should be billionaire families messed up? Certainly, good legal work would have been a part of that.
I get that, but the reality is, is that the biggest contributor to preventing wealth to materialize over time is trust. It’s trust. You know, building generational wealth is just not about being a market timer. It’s just sticking around long enough.
That it works. Why does it work? It works because this is a collective system of businesses that are led by individuals incentivized for these businesses to grow. And these businesses are the same businesses that produce products and services that we all consume. That’s the market in a nutshell. That’s why it works. It works very well, but people fail to engage in this and to stay invested over extended period time because of lack of trust.
Let me break that apart a little bit more. It’s not well, let me explain the types of people there, because there are several different types of people here. So, when we talk about trust, it’s a loaded word, but let me describe some of the type of people that have various approaches to trust. Let me talk about the one type of people, group of people that never trust anyone.
They don’t trust doctors, they don’t trust police officers. They sure as heck can’t trust the stock market. Everything’s corrupt. The whole thing’s rigged. It’s gambling. Honestly, that group of people will likely be in poverty for generations because the capital markets reward trust. They just do. And if that trust is expressed in your investment in the stock market, it’s rewarded.
But it’s also expressed if you treat people with respect in their profession and you trust them, but there are a group of people that will never trust anyone. Those people will not build generational wealth. I know those people. Typically, you know, they’re just not going to do business with us because they don’t trust us.
They don’t trust anyone. If that’s you. Thank you for listening. I appreciate it. But there are people, and actually my heart breaks for them because they’ll never build generational wealth unless they learn to trust. Because it’s the glue that makes this whole thing work. Then there’s the second group of people. Of course, that always trust everyone.
We know those people. They just, you know, any vitamin, any get rich quick thing, any Iraqi. Or I want to say I would say more like any random currency, any bitcoin, anything like there’s just so much out there that can just pull somebody’s attention and then they just blindly trust it.
They get burned enough, then they learn to help. But the real group of people I want to talk about are people that are kind of cynical. They’re not naive. They’re just careful. I think this may be just a Texan thing, but I don’t think so. But it’s people who, like, I don’t know about that JFK thing.
I don’t know about that Fauci guy. Those are the type of people that or my bro’s like, I get you. It’s again, I know it goes even as far as it’s not even a Republican and Democrat thing because I’ve seen ranchers somebody moves in next door, buys a new ranch next to somebody else’s property, and there’s like, they’re going to I don’t trust them.
They’re going to build, they’re going to develop it. Like it’s just it’s just in our DNA. It’s just this healthy skepticism. But trust can be earned. That’s at least the benefit of this. These are called skeptical Texans. At least trust can be earned. It can be lost. But there is that opportunity. And so, I think that’s the group of people I’m talking to.
So, I don’t want you to give up on skepticism. I don’t want you to get up, give up on questioning or challenging. That’s what makes us all great. But at the same time, there’s this appetite to trust and recognizing that that’s how this whole thing works.
So, what do we trust? For us to win in this long term wealth building game? For lack of a better word, you got to trust the stock market. I know it’s not predictable, and I know it’s not smooth. I know it is a child with a yoyo on an escalator. And you’ve got to trust that escalator is going to go up long term. Nobody has certainty. Nobody has certainty. But the probabilities. And I talked about this in a previous show. And the evidence supports that long term it’ll work out. Can’t guarantee anything.
I think let me say this differently. I have conviction that those who maintain that steady trust throughout the ups and downs, that the market’s going to work itself out. I have seen in the last 30 years doing this that they build more wealth than those people who have usually not manufactured a thesis but have heard something that’s slightly credible with some half-truths. I’m thinking of a family right now that abandoned their investment long term plan five years ago.
Five years ago, they said, no, I’m out. I’ve got this thesis. I lost trust in the whole market five years ago. I don’t know their million would probably be worth a couple million, so I don’t, you know, who knows? But the people who win long term, they weather those uncertainties. Now, they still maintain their skepticism.
It’s not like they’ve just abandoned that. But they weather, they trust. And I know it’s heavy. They trust that over time the market’s going to work themselves out. But that’s not all that’s required for this wealth building machine to work for families long term. The second is you’ve got to trust your guide. So that’s where I feel the pressure of an advisor and having an advisory team is it’s incumbent upon us as advisors to not just earn trust when we get a new client and we’ve earned their trust, that’s just the beginning of the relationship.
We’ve got to maintain the trust in every conversation and every email we send out. We got to think about fonts. We got to think. We talk about sleep around here because if you don’t get enough sleep and you come across as, you know, uncertain or not communicating well, that trust can be broken pretty quickly. I mean, it’s little things. I mean, for somebody who’s a guide, the advisor.
You as an investor, trusting that we are working in your best interest. And when there’s a thought or an inclination that that no longer is the case, then it’s very, very difficult for somebody to accumulate wealth long term. So that’s a huge responsibility for the advisors to ensure that their behavior is not such where we don’t it’s not rooted in we just want to tell people what they want to hear. Of course not. But it’s rooted in maintaining that trust because.
If it’s broken, it could break down somebody’s ability to accumulate generational wealth. That’s why we operate under this fiduciary umbrella. It’s not the end all be all. But the fiduciary umbrella says that we’re going to act in our client’s best interest. And not all advisors do that, by the way, they don’t operate under a fiduciary umbrella. We do.
We believe that’s the starting point. That’s the table stakes. But it’s an important one, an important framework. So, trusting the markets has to happen, trusting the guide, that the guide is looking out for your best interest, but also making sure that the advisors are competent, that they have all the tools and resources. The investment thesis is good that the people participating, the investment strategy, whoever role, whatever role they play there, they know what they’re talking about.
I find that not everyone needs or expects the advisor to know everything because it’s really just it’s a there’s a lot of stuff, but if you don’t, you know where to go. And it doesn’t, it’s not too difficult to find the answers. But you’ve got to make sure your advisor knows what you’re what they’re doing. I’ve got to tell you, this is probably the pain point for me because I believe working with an advisor helps.
If that advisor has a fiduciary approach and they’re competent and in the family trust that the market’s going to work out. I do believe that a family can accumulate a lot of wealth over time. I do. My only challenge is that when the advisor is incompetent and I see that sometimes in the marketplace. And so I think it’s, if you’re not a PAX client, then, you know, just continue.
Just ask the advisor tough questions and making sure that you’re getting good answers. Challenge them. I don’t expect them to be perfect or, you know, be a stock market genius by any means. But I do think it’s healthy just to periodically do the check of competency, because I do find advisors that build a business just solely off relationships.
And I find value in relationships because I know that’s really important. But I still think that this third leg of competencies is critically important, and that’s really that how I’ll land the plane, is a three legged stool of trust. So, for somebody to not have, let me say it this way, for somebody to build generational wealth over an extended period time, they’ve got to trust the markets work.
They’ve got to trust that their advisor is looking out for their best interest, and then they’ve got to trust that the advisory team is competent. And without those three, that three-legged stool, then people just have some doubts. They hesitate, they pull back or they just completely override the plan. They’re just like, I’m just, I’m an amount that skepticism starts to build up a little bit more.
And so, at the end of the day, this whole stop market thing, this collective group of businesses that produce products and services that we all consume, led by CEOs and executives who are incentivized to grow the businesses, those typically have proven not to fail people. People fail people. And it’s a byproduct of trust. And so, I think it’s important for us to all recognize that this idea of building well, through the market can be done.
And my hope is that, you know, the wealth that you’ve built today, if your intention is to create generational wealth, that you’re thoughtful about, it, you’re not a statistic. Like, you know, one of these missing billionaires. But you can leave an inheritance for your children’s children by using the market as a tool. And then, of course, constructing the appropriate, trust and legal documents to ensure that it passes down to the next generation.
We’ll cover that in another podcast here soon. But the ones that learn to trust again, continue to be skeptical, but trust long term. Stick with it. The stuff works. And remember, you think different when you think long term. Have a great day.
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