Pay Me Money to Lose Your Money: Yin Yang Economics Part 5

If you're interested in investing money you probably already figured out the fallacy of hiring someone to earn you money. Seriously, think about it. If someone came up to you and said, "Pay me thousands of dollars to lose your money over an extended amount of time," would you hire them?

You might not, but interestingly enough the vast majority of Americans already have and still are. What makes it even more bizarre is that a lot of these Americans actually go out of their way to find someone they wouldn't ordinarily trust and happily agree to pay those strangers thousands of dollars knowing full well that the strangers may or may not make them more money. In fact, under certain circumstances these types of Americans rejoice and praise the stranger for making them no money at all. We call this stranger an investment expert, advisor and pretty much every name on the planet depending on how much we love or hate our expert. So why would anyone hire such a person to gamble with their hard earned money? Are we retarded?

Gosh, I don't think we are but sometimes I really wonder. So how did this above scenario all come about? Well, it all started when someone thought it was a good idea to sell pieces of paper called degrees that essentially say, "I know you don't know me, but trust me, I know what I'm doing. That's why you ought to hire me." The idea caught on so well that you now have millions of people lining up and slaving away countless hours away from family and friends and spending thousands of dollars on institutions that give them these degrees. There are many kinds of degrees, they range from Bachelor of Arts to Masters to PhDs and so on and so on. I've got quite a few, none of which can land me a job in this economy ironically enough. How many degrees do you have?

Anyways, once a person finally gets a finance degree they figure that someone somewhere would trust that the piece of paper that they slaved away for will get them a job where they can finally be in the position of being paid money to manage someone else's money regardless of whether they lost or earned money for their client. If you don't believe me, you ought to read, "Full of Bull" by Stephan McClellan, a former wall street trader. He reveals what really goes on when you hand your money over to investment firms. Anyways, the average American thinks that when they hand their money over to so called "financial advisors," the financial advisor only makes money if they make their clients money, but that's not true in most cases. Sadly, the majority of Americans think this way and don't even bother reading the fine print on all those contracts to see if this is indeed how their investment firm actually make their money. So what is one to do?

Well, you can give up the idea that someone who doesn't really care about you or know you will go out of their way to make you huge loads of money while you sit on your butt and eat cheetos all day because chances are they want to sit on their butt and eat cheetos all day too. Which kind of makes me wonder, if you were to sneak into the offices of these so called financial experts would you find cheeto dust all over their desks? haha. Seriously though, investing in the stock market via 401ks, Roth IRAs, etc, is really no different than gambling. Here's how I see it.

When you go to a casino in Las Vegas, you can quickly blow a thousand bucks in less than a minute. The odds are terrible, but it's the minute hope of getting more money then what you put in which keeps the gamblers gambling. After all who doesn't like the appeal of getting something for nothing and doing nothing? Sounds pretty sweet to me until you finally lose all the money you put in. Investing in the stock market is the same as gambling. The only difference is that instead of losing money over the course of a minute, you stretch the period of loss out over the course of decades and hope and pray that when it comes time for you to actually use that money, the money is still there for you when you take it out. Some lucky Americans will be able to retire during a time when the price of their stocks are high, but I would say is it's incredibly hard to predict when you will need your money back and whether the market will be behaving favorably during the time you need to withdraw your cash.

One of the most disconcerting ideas about the stock market is that majority of the people believe the stock market will always be up when it comes time for them to withdraw the money to use to pay their future bills. Another is the idea that a boom in the stock market equals a healthy economy. I have found the exact opposite to be true. America used to have one of the largest and wealthiest middle class population in the world, but not anymore. The gap between the rich and the poor grows ever larger and no one seems to notice if they make more than $40,000. It seems to me that with each roar of the stock market the middle class is shrinking all that much more.