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Here’s the conventional personal finance wisdom people have been told to follow, by bestselling books, expensive financial planners, and celebrity financial gurus:

  1. As early as possible in your 20s, save a steady amount from every paycheck. (A typical recommendation is 10% of pre-tax income.)
  2. Invest those savings in a diversified portfolio of stocks. Watch this portfolio grow over decades via the magic of compound returns. (A typical forecast of expected return is 7% above inflation, annualized.) Also, try to buy a home as quickly as possible, the value of which will also appreciate faster than inflation.
  3. Then, based on all that asset growth, enjoy a safe, secure, comfortable retirement at age 65.

It's a nice story. In practice, however, this formula is broken, as has been repeatedly proven in the past 15 years.

American savings rates are not simply inadequate; they are currently heading us straight towards a national retirement crisis of Titanic proportions. In an alarming report from the National Institute on Retirement Security, Dr. Nari Rhee finds that “the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households." A short retirement indeed.

As for the promised “magic of compound returns,” the rabbit is still sitting, unmagically, inside the hat. Over the past sixteen years, through two major crashes since 2000, the S&P has returned roughly 2% per year above inflation, annualized; home values have offered similarly meager growth over the same period. Think about this for a moment. Sixteen years is roughly a third of a typical worker’s working life. Two percent real returns over such a long period are hardly the makings of a safe nest egg. No wonder 46% of American investors (defined as those with $10,000 or more of investible assets) currently fear outliving their savings, according to Wells Fargo and Gallup.

In short, the rosy story the personal finance industry has painted for its clients for decades is now looking like a tragedy or a farce.

But is there an alternative?

We believe so.

The main asset most Americans possess, after all, is not the several thousands of dollars in their 401(k), nor their (overleveraged, often underwater) home equity. There are several key assets, available to nearly every American of sound mind, that far outpace these both in terms of general availability and predictability of returns. One such asset is their earning power, which offers a net present value (NPV) of around $2 million, projected over a lifetime, for the typical college-educated person entering the work force, and $1 million for the typical high school graduate. What other $1 million to $2 million asset do most American workers possess?

And here's the key: It is much easier, and less risky, to increase one’s earning power than it is to increase one’s returns via savings and traditional investing.

Why? While personal finance industry focuses obsessively on rate of return (often promised at an optimistic 7%), the actual money one gains is much more dependent on your asset base. Five percent growth on an asset base of $3,000 (the typical American household’s retirement savings) stacks up to $150—just enough for a few months worth of the lattes that many of us were told to forego over years in order to save that money up. Five percent growth on $2 million (the NPV of a middle-class worker early in her career) is $100,000.

But how do you grow your earning power?

Instead of investing in stocks, bonds, and homes, which have offered such meager and volatile returns over the past decade and a half, in our book The Last Safe Investment, we propose you should instead invest in True Wealth assets, including what we call Super Skills. These are the most universally valuable and sought-after skills, relevant and highly rewarded no matter what career or industry you’re in.

They include, but are not limited to, sales skills, networking and people skills, writing and persuasion skills, and the skills associated with creating a longer, healthier life for yourself (which can add years or even decades to your earning power, in this new age of rapidly-expanding life spans). It’s hard to know what the stock market will do over 40 years. But it’s easy to know what will increase your earning power over 40 years, no matter what the stock market and wider economy are doing.

And by “earning,” we don’t just mean money. What is all money for, after all? Most people we talk to say they want more money for three simple reasons: freedom, happiness, and safety.

The very same Super Skills we recommend you invest in, also help you “earn” more happiness, freedom, and security in your life. Someone who knows how to sell and persuade will always find work (security), and will usually be able to succeed at small business or self-employment (freedom.) And being on top of your career game—the ultimate promise of the Super Skills—converts your work life from something barely tolerable (the current state of the typical American’s job satisfaction) into something fun, exciting, engaging. And yes—happy.

Bryan Franklin and Michael Ellsberg are co-authors of The Last Safe Investment: Spend Now to Increase Your True Wealth Forever, which was released today. Franklin coaches CEOs on business strategy and leadership. Ellsberg is author or co-author of four books including Education of Millionaires: Everything You Won't Learn in College About How to Be Successful.