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When research says "the market returned 10% over 80 years," what does that actually mean for your retirement? Most DIY investors make critical assumptions about expected returns that create serious retirement planning problems.

This episode breaks down the troubling gap between advertised fund performance and real investor results. We examine research from Dalbar and Morningstar showing retail investors consistently underperform stated returns by 1-2% annually—which can mean missing out on 15-50% of potential gains depending on the asset class.

You'll learn why compound annual growth rate (CAGR) calculations don't reflect your actual experience as a periodic investor, how behavioral mistakes like panic selling and performance chasing sabotage results, and why social media success stories create dangerously unrealistic expectations.

Most importantly, we explore practical solutions: understanding money-weighted returns, accepting realistic performance gaps, focusing on adequate savings over chasing returns, and why income-focused investing shifts the conversation from rates of return to sustainable retirement cash flow.

Chapters:

[00:00] Introduction: The Return Gap Problem
[01:10] The 15% Fund Paradox: Why Your Results Differ
[03:27] Dalbar Research: The Disappointing Truth
[06:18] Morningstar's Findings: Missing 15% of Returns
[07:58] CAGR vs Money-Weighted Returns Explained
[11:09] The Rebalancing Drag Effect
[15:25] Behavioral Mistakes: Fear & Performance Chasing
[24:31] Social Media's Distortion of Expectations
[25:53] Practical Solutions for Realistic Planning
[27:43] Income-Focused Investing: A Different Approach
[29:27] The "Saving Too Much" Question Answered