They are Going to Take Your Money
Nov 16th, 2008 by Wes
I was thinking about this statement today. My father is a conservative man. He got a college degree, worked for the same company for over 30 years, had a very successful career, saved his money in pension and retirement accounts, raised three kids, sent them all to college and retired at the very young age of 53. He did everything he was taught. He has spent the last 10 years or so enjoying his retirement in Boise and snow-birding to Arizona in the winters. He plays golf nearly every day and has achieved his goals. As far as risk tolerance goes we’re completely opposite. The activities and business ventures I have embarked upon in my life have given my father ulcers. About a year and half ago I bought my first piece of land in Nicaragua. Over the dinner table one evening my dad looked up from his plate and all he said was, “They are going to take your money.” Now, I did not exactly know who was going to take my money. Was it Daniel Ortega? Was it the government? Was it the developer? Was it some Nicaraguan off the street? It didn’t matter; my dad thinks someone is going to take my money. No one has taken my money yet.
So I am sitting here as the DOW drops another 2% and my dad’s lifetime savings has lost nearly 50% of its value over the last 12 months. Who is taking my Dad’s money? Is it President Bush? Is it our government? Is it the bankers and hedge fund managers? Is it the guys on Wall Street?
Look at the graph below: This is the 10-year history of General Motors stock. If I spent my lifetime working at GM hoping for my pension and 401K to support me in my retirement I would have to ask the question: Who took my money? Where did it go? If I managed to buy 10,000 shares of stock over a 30-year period and retired in 1998 at the age of 55 with $900,000 I would have thought I could play golf the rest of my life. Now my portfolio is worth $20,000 and I have to get a job at the age of 65.
Someone answer this question please: Who is taking my dad’s money?
