My Dad's Perspective
By Mark Bradford
I am just about an easy-going guy as you can meet.
Sure I get excited when I am in charge of something or other similar times, but for the most part I’ll just move over or stay out of the way when people try to use their perceived power on me because, quite honestly, life is too short to bother with the small stuff.
I have always believed most of what people told me anyway. My dad said “Save your money, son” and so I did. My mom said “Eat your vegetables” and so I did. My professor told me”Invest $250/month in the stock market and you will be a millionaire at the end of 40 years because the stock market returns about 9 percent annually, give or take.” So I did.
In fact, my wife and I invested $500 every month, through thick and thin and sending three kids to college. Like the rest of us, we watched as our life savings seemingly disappeared this past winter, even though they were placed in "safe" mutual funds. Being the easy-going guy that I am, I just shrugged and said, “Give it time, it will come back.”
So I did. That was OK until I watched a 60 Minutes episode in which they detailed how all the mutual fund managers were getting rich despite the bad economy. All of it was and still is perfectly legal, of course. They were still charging 3-5 percent management fees despite incurring huge losses through blatant mismanagement of MY money.
MY money. I have a son who is a budding investment guru. His “practice” portfolio (which included $50,000 of our family money) took a dive this past winter, too. But his losses were approximately equal to or less than my “professionally managed” funds. So, a college kid still wet behind the ears was able to think just like “seasoned pros” who supposedly have my best interests at heart.
My ass, they do. It suddenly occurred to me that every does time I was paying 3-5 percent fee just to dump money into their fund, I was losing money and they were taking (not making) it. They were the ones living the high life and vacationing in Hawaii while I spent two months trying to figure out how to pay an unexpectedly high tax bill.
Then it occurred to me that I didn’t HAVE to let these overpriced underachievers invest my money for me. If I was going to lose an automatic 3-5 percent upfront, I wanted to do it myself. I already had my Internet brokerage account and access to CNBC (my guess is the fund managers are drinking lattes and not watching Squawk Box in the morning). I am able to track the market on my own and, in fact bought the financials at historic lows and have a selling strategy in place.
And I don’t charge myself 3-5 percent. So, I called my IRA mutual fund holder and told them to get me out and send the cash to my discount broker. I filled out all their indecipherable forms and am now waiting for the cash to hit my Internet account. In fact, I have been waiting two weeks for these highly paid mutual fund managers to write a check and get it done. Great service.
When that happens, I will work with my son to choose the most effective accounts for long term growth and stability. I will have my ups and downs and I will make mistakes. But I can pretty much guarantee that if anyone gets a chance to live in the Hamptons on my 3-5 percent this time, it will be me.
When I was in high school in the 1960’s it was a popular phrase to say “Stick it to the man.” Little did I know “the man” would be disguised as some greedy mutual fund manager and that he would bleed me slowly and make me like it.
My change of heart is just my way of sticking him. And I hope others do too.
By Mark Bradford
I am just about an easy-going guy as you can meet.
Sure I get excited when I am in charge of something or other similar times, but for the most part I’ll just move over or stay out of the way when people try to use their perceived power on me because, quite honestly, life is too short to bother with the small stuff.
I have always believed most of what people told me anyway. My dad said “Save your money, son” and so I did. My mom said “Eat your vegetables” and so I did. My professor told me”Invest $250/month in the stock market and you will be a millionaire at the end of 40 years because the stock market returns about 9 percent annually, give or take.” So I did.
In fact, my wife and I invested $500 every month, through thick and thin and sending three kids to college. Like the rest of us, we watched as our life savings seemingly disappeared this past winter, even though they were placed in "safe" mutual funds. Being the easy-going guy that I am, I just shrugged and said, “Give it time, it will come back.”
So I did. That was OK until I watched a 60 Minutes episode in which they detailed how all the mutual fund managers were getting rich despite the bad economy. All of it was and still is perfectly legal, of course. They were still charging 3-5 percent management fees despite incurring huge losses through blatant mismanagement of MY money.
MY money. I have a son who is a budding investment guru. His “practice” portfolio (which included $50,000 of our family money) took a dive this past winter, too. But his losses were approximately equal to or less than my “professionally managed” funds. So, a college kid still wet behind the ears was able to think just like “seasoned pros” who supposedly have my best interests at heart.
My ass, they do. It suddenly occurred to me that every does time I was paying 3-5 percent fee just to dump money into their fund, I was losing money and they were taking (not making) it. They were the ones living the high life and vacationing in Hawaii while I spent two months trying to figure out how to pay an unexpectedly high tax bill.
Then it occurred to me that I didn’t HAVE to let these overpriced underachievers invest my money for me. If I was going to lose an automatic 3-5 percent upfront, I wanted to do it myself. I already had my Internet brokerage account and access to CNBC (my guess is the fund managers are drinking lattes and not watching Squawk Box in the morning). I am able to track the market on my own and, in fact bought the financials at historic lows and have a selling strategy in place.
And I don’t charge myself 3-5 percent. So, I called my IRA mutual fund holder and told them to get me out and send the cash to my discount broker. I filled out all their indecipherable forms and am now waiting for the cash to hit my Internet account. In fact, I have been waiting two weeks for these highly paid mutual fund managers to write a check and get it done. Great service.
When that happens, I will work with my son to choose the most effective accounts for long term growth and stability. I will have my ups and downs and I will make mistakes. But I can pretty much guarantee that if anyone gets a chance to live in the Hamptons on my 3-5 percent this time, it will be me.
When I was in high school in the 1960’s it was a popular phrase to say “Stick it to the man.” Little did I know “the man” would be disguised as some greedy mutual fund manager and that he would bleed me slowly and make me like it.
My change of heart is just my way of sticking him. And I hope others do too.
By Mark Bradford
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