You are correct! Do you know why most people never went to see any advisor? Trust! They trusted the people that came in and sold the plans. They trusted their HR department. It was a scam from the beginning and the average worker, having little or no knowledge about investing, just took the hustlers at their word. The pitch was simple. You Mr. Joe Lunchbucket, put in 6% of your gross and the company will match it. Take an average of 8% annual return, which was the historical figure they used, and viola, at 60 you're rich. That's how it was sold, and the average Joe had no reason, or point of reference to believe it to be false. Corporate America loved it because it was cheaper than funded pension plans. Wall Street loved it for all the obvious reasons. And the government...the government doesn't care either way. They play both ends and get their money and votes regardless of what happens. And the beat goes on!
Video:60 Minutes - Those Who Are 401(k) Screwed & Even Unemployed; Wall Street Racket
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You are correct! Do you know why most people never went to see any advisor? Trust! They trusted the people that came in and sold the plans. They trusted their HR department. It was a scam from the beginning and the average worker, having little or no knowledge about investing, just took the hustlers at their word. The pitch was simple. You Mr. Joe Lunchbucket, put in 6% of your gross and the company will match it. Take an average of 8% annual return, which was the historical figure they used, and viola, at 60 you're rich. That's how it was sold, and the average Joe had no reason, or point of reference to believe it to be false. Corporate America loved it because it was cheaper than funded pension plans. Wall Street loved it for all the obvious reasons. And the government...the government doesn't care either way. They play both ends and get their money and votes regardless of what happens. And the beat goes on!
It wasn't Trust - No one could see it coming. Remember?
It's kind of sad, but it IS a zero-sum game.
Those in the know, banks and lending institutions, did a fair job of feigning surprise, but they tipped their hand a few years ago when they lobbied so hard to change the personal BK laws making nearly impossible to completely liquidate personal debt for the average worker. That was the tell of impending doom.
You can't eat knowlege.
Sure society becomes more technologically advanced and vis a vis living standards increase. But the distribution or as us capitalists like to say-the allocation of wealth- is still predicated upon the inherent competition for financial resources. In a market economy your profit as a seller is my loss as a buyer. That's why net-net China and Wallmart abetted the short term upward mobility of the service sector American middle class. What's better-spend a days wage for a coat or an hours pay?
So while a poor person lives better than yesterday and presumably will live better yet tomorrow there's little evidence that disparity itself has been alleviated. Don't get me wrong-I don't think income equality is needed or important-but whether the pool is stagnant or expanding the mean remains rather constant
Sure society becomes more technologically advanced and vis a vis living standards increase. But the distribution or as us capitalists like to say-the allocation of wealth- is still predicated upon the inherent competition for financial resources. In a market economy your profit as a seller is my loss as a buyer. That's why net-net China and Wallmart abetted the short term upward mobility of the service sector American middle class. What's better-spend a days wage for a coat or an hours pay?
So while a poor person lives better than yesterday and presumably will live better yet tomorrow there's little evidence that disparity itself has been alleviated. Don't get me wrong-I don't think income equality is needed or important-but whether the pool is stagnant or expanding the mean remains rather constant
I have to agree with those who believe in personal responsibility like Cutten, Landis82, emrglobal and Mvic. In a bull market, all these people in trouble now will think they are geniuses. How many people do you know thought the same way during the tech bubble? Logic goes out the window. "Things are different this time" they say. But when things turn for the worse, they put their head in the sand and âhopeâ things will be ok. It is not like we woke up one day and the market was down 40-50% overnight. It takes time. My point is there was plenty of warning to anyone paying attention. Just like there has been in past down markets.
The problem is people spend more time worrying about what latte to get and where they want to retire to instead of actually learning and watching their investments like they should be. How someone can have no interest in educating themselves on something that mean so much to their future is beyond me. As stated, there are plenty of books and resources to learn the basics if people would only take advantage. Asset allocation models based on age should be pretty obvious with a bare minimum of time investment.
Do I feel bad for those who didnât pay attention? Of course. But that doesnât mean it wasnât there own fault for not minding the store. But how anyone who is 60 and only has 250-300k in retirement funds (before losing half) are in a good position is surprising to me. The truth is they were in trouble before losing a lot of retirement funds.
Never expect an unbiased opinion from someone who has a financial interest in your decision. All financial advisors are salesman, plain and simple. Sure some are âfee onlyâ but they are still salesman. There are plenty of low cost investment choices out there. Index funds have very low fees. Granted, many 401k choices are horrible based on the company choices I had before leaving the working world. At the end of the day, you are on your own and better off for it IMHO. The sooner someone takes responsibility for himself or herself, the better off they will be.
As to trying to help others, most just wonât listen. Another thread said if Warren Buffet or whomever your investing god is told you personally to get out, only a small percentage would actually listen. I agree with that. People just donât listen and they never will. All you can do is offer an opinion and take care of your needs. They only learn the hard way. Sad but true.
Good trading and mind the store.
BM
The problem is people spend more time worrying about what latte to get and where they want to retire to instead of actually learning and watching their investments like they should be. How someone can have no interest in educating themselves on something that mean so much to their future is beyond me. As stated, there are plenty of books and resources to learn the basics if people would only take advantage. Asset allocation models based on age should be pretty obvious with a bare minimum of time investment.
Do I feel bad for those who didnât pay attention? Of course. But that doesnât mean it wasnât there own fault for not minding the store. But how anyone who is 60 and only has 250-300k in retirement funds (before losing half) are in a good position is surprising to me. The truth is they were in trouble before losing a lot of retirement funds.
Never expect an unbiased opinion from someone who has a financial interest in your decision. All financial advisors are salesman, plain and simple. Sure some are âfee onlyâ but they are still salesman. There are plenty of low cost investment choices out there. Index funds have very low fees. Granted, many 401k choices are horrible based on the company choices I had before leaving the working world. At the end of the day, you are on your own and better off for it IMHO. The sooner someone takes responsibility for himself or herself, the better off they will be.
As to trying to help others, most just wonât listen. Another thread said if Warren Buffet or whomever your investing god is told you personally to get out, only a small percentage would actually listen. I agree with that. People just donât listen and they never will. All you can do is offer an opinion and take care of your needs. They only learn the hard way. Sad but true.
Good trading and mind the store.
BM
Personal responsibility is a great tag line, and sounds fantastic.
The problem with it is that it only represents one side of the coin, and doesn't delve into the massive fraud, lack of disclosure and rigged racket that is the retirement and pension system that's been set up in the exact manner to provide a one-sided, fee-based system of continuous benefits for Wall Street institutions, providing a lucrative income stream to them, in good times and bad, with the individual investor who has played by all the 'rules of the game' bearing the sole risk of market downturns.
In other words, the house can't lose, and prospers from fees, commissions, etc., even during the most tumultuous times, no matter how horrid the advice they dispensed for how long, in an area they are supposed to have a degree of competence and expertise and professionalism in.
The congressman in the 60 Minutes piece can't even get a frickin' bill on the house floor that would simply mandate that ALL fees charged to investor accounts be disclosed, because of the incredible strength of the Wall Street lobby!!!!!!!! WTF!!! Is that too much to ask for?
This is not a reciprocally fair system of exchange. The game is rigged badly, and the deck is stack terribly against the average investor.
The problem with it is that it only represents one side of the coin, and doesn't delve into the massive fraud, lack of disclosure and rigged racket that is the retirement and pension system that's been set up in the exact manner to provide a one-sided, fee-based system of continuous benefits for Wall Street institutions, providing a lucrative income stream to them, in good times and bad, with the individual investor who has played by all the 'rules of the game' bearing the sole risk of market downturns.
In other words, the house can't lose, and prospers from fees, commissions, etc., even during the most tumultuous times, no matter how horrid the advice they dispensed for how long, in an area they are supposed to have a degree of competence and expertise and professionalism in.
The congressman in the 60 Minutes piece can't even get a frickin' bill on the house floor that would simply mandate that ALL fees charged to investor accounts be disclosed, because of the incredible strength of the Wall Street lobby!!!!!!!! WTF!!! Is that too much to ask for?
This is not a reciprocally fair system of exchange. The game is rigged badly, and the deck is stack terribly against the average investor.
Wallstreet not disclosing fees = Wallstreet stealing money from customers' accounts
Can't you go long inverse funds in your IRA? I liked the 60 video...my fav show after all these years. Glad it exposes wall street for what it is.
However, as someone who has spend big bucks and lotsa time learning the market, I believe that there are no free lunches. Knowledge is power. No one was complaining when they made all that money in their homes, or IRAs.
Personally, I beleive retirement is abit overblown. People are living way longer today, and maybe working part time beyond 60 is not such a bad thing...imho
However, as someone who has spend big bucks and lotsa time learning the market, I believe that there are no free lunches. Knowledge is power. No one was complaining when they made all that money in their homes, or IRAs.
Personally, I beleive retirement is abit overblown. People are living way longer today, and maybe working part time beyond 60 is not such a bad thing...imho