Ever since I can remember, I’ve been told how to invest and grow my money.  The stock market.  Mutual funds.  IRAs, 401(k)s, blah blah blah.  By doing so, I’m told, I can expect a good rate of return over the long haul, making my money “work for me” (a nice bit of bullshit wordsmithing that means precisely nothing) instead of hanging around doing nothing.  This way, when I get old enough, I can Retire.  Ahhh, what a word.  Retire.  Days spent leisurely sipping lemonade on the porch – that’s what retirement seems to mean, at least according to the commercials.  Oh, and golf.  Lots of fucking golf in peach-colored pants and white belts.

I fucking hate golf.

That’s the Mantra.  Invest Your Money So That You Can Retire In Luxury.  It’s beaten into our heads in school and on TV and in interminable HR meetings where they serve stale bagels and some low-level schlep from whatever firm handles the company’s 401(k) drones on about money markets and investment categories.  The Mantra, unfortunately, is bullshit.  The people who are retiring in luxury?  That’s the assholes who are taking your money to “invest”.  They get to retire in luxury, usually by 45 if they want to, but why bother?  Most of the jobs those douchebags have by that point is just going into the office for a couple hours, then playing golf with clients and expensing it all.  Who pays for that?  Why, the money you gave them, and that they did something with to make themselves money.  Those ridiculous bonuses those banking executives get paid that the country was all up in arms over two years ago, but has now taken a back seat to oohing-and-ahhing over Oprah’s half-sister?  Where do they come from?  Your money.  My money.

Let’s say Firm A has 1,000 clients, mostly people like you and me, some money we drop into a 401(k) or IRA or whatever.  Let’s say that’s 990 of those clients are people like that.  The other ten are high-rollers, millionaires and billionaires.  Each of the 990 of us have 10 grand invested.  Power in numbers!  Look at that!  We have nearly 10 million dollars invested!  Sweet!  The other ten guys, however, have 10 million apiece invested.  Who is the investment firm going to try to keep happy?  You, with your ten grand, or Mister D. B. Moneyfucker, with the 10 mil?  Guess who gets the great returns the company touts in their 500 page incomprehensible prospectus?  Hint: it ain’t you.  Why share the wealth equally?  That’s for Communists.  The big money gets the lion share of the rewards, because if one of them gets pissed off, they take a lot of money with them.  There is no chance that all 990 of the little guys leave.  Just won’t happen.  We’re programmed by talking babies and former Law & Order prosecutors that investing our money is The Smart Thing To Do.  The question they aren’t answering is this: who is it Smart for?  It’s definitely smart for them.

Want a good laugh?  Ask an investment guy what to invest your money in, like the 401(k) dude with the shitty bagels.  This is what they all say:  Diversify.  Some small cap, some large cap, some equity, some bonds.  Depends on your acceptable level of risk.

Wow, that was really fucking helpful.  Thanks, asshole.

It cracks me up.  I ask them that question on purpose just to hear that answer.  We have an Investment department where I work.  I’ve asked each member of the department at one time or another that question, and get the same answer every time.  They don’t tell you what THEY are invested in, because if too much attention gets paid to something, that means it’s money-making potential is gone.  Those people that watch Jim Cramer or that lunatic woman on the Oprah network now, what’s her face, ORMAN, damn I remembered, those people are deluding themselves.  Here’s why.

I’m a big shot investment dude.  I just made a shit-ton of money short-stacking Chilean ice beans.  The early, big-money making days are over, and now I want to get out.  But I need someone to sell them to, somebody who doesn’t know shit about ice beans and can be convinced that they are a CAN’T MISS investment.  We get those people that used to work with us who are now on TV to shill for us.  But why would they do that?  Because my firm advertises on their show, or at least the firm I use to handle my big-money investments does, and they help keep Jim Cramer in expensive-but-somehow-cheap-looking suits.  Manus manum lavat, as the old Romans said.  One hand washes the other.  But that money has to come from somewhere.  It’s not coming from the bonus pool.  It’s not coming from Mr. D. B. Moneyfucker.  It’s coming from the small fry, the mutual funds where they pool together a bunch of little investments and can skim whatever is necessary from the top.  Who’s going to miss it?  If I’m getting a 5% return on my money in the Good Times and just chalk off my losses to The Bad Times, how am I to know what my investments are really doing?  Are there fees?  How is the investment firm making money?  They don’t need to answer my questions.

True story.  I’ve been putting money into 401(k)s for, what, 15 years?  Sometimes 10%, sometimes 5%.  I can’t touch that money unless I’m old enough or want to get hit with serious penalties.  I might as well not have it.  It’s like getting married to a beautiful woman then giving her to someone else until you get older.  You are giving up the utility of that money for the promise of future gains.  Anyway, I’ve been putting that money away.  During the Good Times of the late 90’s, it got up to a certain level, then has gone up or down a little based on how the market was doing.  I just added up my income, or at least a rough estimate of it, and applied 7.5% (a good average of my investment strategy over that time period) to it.  It’s less than the current balance of my various IRAs and mutual funds.

Oh, but look at the struggles of the market over the past couple of years, surely that’s what drove the balances down.  Uh, no.  They went down a little, it’s true.  But not a ton.  Anyway, the market is cyclical, and the boom and bust cycle is normal.  It’s going to happen for the rest of my life.  In theory, I get enough ahead during the good times that the bad times just take a portion of the outrageous gains I’ve made previously.  Except that I don’t make outrageous gains.  I’m too small a fry.

So, essentially, I am giving up my money now, giving it to someone else, and letting them play with it.  I was told that when I got my money back, it would be so  SO MUCH MORE.  I might even be a MILLIONAIRE.  At this rate, I will, so long as I make 10 million over the course of my life and put 10% away.  I’ll get a million dollars back.  I liken it to a church.  If I give them 10% of my money now, here on Earth, after I die I’ll get all this cool shit.  That’s a pretty fucking horrible sucker’s argument, if I fall for it.

Over the last two years, I’ve changed my strategy.  I put 1% into a 401(k) out of habit, but the rest goes into a savings account that bears a small rate of interest.  I can take the money out any goddamn time I want to.  My bank balance doesn’t go down when the market takes a shit.  It stays right where it is.  I like that a hell of a lot better.  I use some of that money to pay additional principle on my mortgage, reducing the amount of interest I’ll be paying over the course of the loan.  Unless I can get a rate of return higher than the interest rate of the mortgage, there isn’t a fucking point in investing it.  I’d be putting money away for under a 5% return (which any investment person will tell you is good) while paying 6% interest on a loan I have out.  This isn’t a sound fiscal strategy.

Yeah, I’ve decided.  I’m just going to keep my money, thanks.  If there is something left over in those accounts when I get older, great, but I honestly don’t expect it.  See, the money those bankers get paid and the Buffets of the world make has to come from somewhere.  I’ve decided that I don’t want it to be me anymore.