The concentration of power that the banks have is at the levels of the great depression. When the balance of power tips too much in favor of the rich, bad things start to happen. This was demonstrated in 2008 with the mortgage crisis. The bottom line is that Wall Street has a gambling problem and nothing has changed since the bubble burst.
Why is this important to me?
I am not doing this summary to waste your time. My vision is to provide concise action steps that you can take right now to improve your financial life. There is an old saying, put a frog in boiling water and it will jump, but gradually heat the water and it will stay in it and die. This is what is happening right now with America’s wealth. The largest wealth transfer in history is happening as we speak and has been since 2005. Wall Street simply cares about bonuses and payouts. Both big companies and banks get big salaries even if they mess up and do a bad job. GE was hailed as one of the great American companies and the share price is half what it was 10 years ago, but the executive management team has made a lot of money.
Where I come from, you don’t get a trophy unless you win. Today’s administration has no interest in the companies they manage. The biggest problem we have now is that for every dollar the United States government spends on wars, defense, rights, and other projects, it borrows $ .43 cents. If the average American did this, bankruptcy would occur in less than 2 months.
Pirates of Manhattan II focuses on target date mutual funds and the fact that banks want to start managing THEIR 401K plans. In this overview, we’ll cover the what, why, and how of target date mutual funds and review performance to make sure you know how to protect yourself.
1. What are Target Date Mutual Funds? – A mutual fund in the hybrid category that automatically resets the combination of assets (stocks, bonds, cash equivalents) in its portfolio according to a selected time frame that is appropriate for a particular investor. A target date fund is similar to a life cycle fund, except that a target date fund is structured to address some future date, such as retirement. These instruments are very complex and can include derivatives and other instruments. Disclosure documents and prospectuses are similar to the 1,900 page health care bill, very complex.
2. Why is it important to understand TDMF? Mutual funds are generally touted and advertised as great investments by the likes of Suze Orman and other financial gurus. When you do your research and see what the rich invest in, the last thing on their list is mutual funds and 401Ks. Suze Orman pushes these instruments as if her life depended on it. Since your backers are large financial corporations, your financial life may depend on it. The question is: Does she invest in these instruments herself? According to her, she only has 3% of her assets tied up in the stock market because “I don’t care if I lose it.” How can she promote these instruments if she does not invest in them herself? What you’ll find is that big companies, wealthy individuals, and savvy investors don’t invest in mutual funds and 401K plans.
3. How does it work? Target date mutual funds are unproven, but there are three factors driving their growth. 1. TDMFs are the default choice now on most 401K plans. 2) At the time of employment, several employers do not meet the employee as chosen to enter the plan. 3.) Mutual funds and 401Ks are not guaranteed.
The media has done a great job of selling unsecured investments to the general public. Dave Ramsey also presents Mutual Funds and says you can get 12% annually. This is misleading because according to Dalbar, the average actively managed mutual fund averages 3.8% per year for the last 20 years. You can invest in GUARANTEED life insurance and annuities and exceed these returns by 2-3% and your return is GUARANTEED. Mutuals are owned by the policyholders and the capitalization requirements are 1 to 1 and not 10 to 1 like banks. Some mutual funds use a leverage of up to 60 to 1. If you remember that the cause of the mortgage crisis in 2008 was due to derivatives being leveraged more than 40 to 1 and now these same banks want access to their cash because of the commissions and money generation. current they offer.
This book is a must-read and it will scare you. Most of the people I talk to have basically “learned impotence.” I hear: “I get my 401K statements and I don’t even open them.” This is a sham and it needs to change. Account retention is as important as account accumulation. Will Rogers said, “It’s my money back that worries me.” Your retirement account must be guaranteed and rock solid. You may have other speculative investments after that, but not your core savings. Another area the book covers is the relationship between big business, the media, the financial press, and your retirement. The mutual fund business is a trillion dollar industry and the sharks know they make money from fees and management, regardless of whether you win or lose.
I hope this short summary has been helpful to you. The key to any new idea is to incorporate it into your daily routine until it becomes a habit. Habits are formed in just 21 days. One thing you can take away from this book is to establish a guaranteed retirement plan. Do your research and be a part of that research on annuities and life insurance. I am not a financial planner, but I do advocate for financial education. I can tell you that I do not have mutual funds and I do not tie my money in 401K plans. This is a road to nowhere in my opinion. I save money on guaranteed instruments like life insurance and annuities. Set a time on your calendar each week and get information.