I fear that retirement means I’ll be mopping the bathroom floors in some Wal-Mart until I die. Or maybe I’ll need heart surgery I can’t afford, and I can only stay alive by hooking my femoral artery to an electric pump that I drag behind me on a Radio Flyer wagon until I drop dead. You may have these same fears, if you’re within screaming distance of retirement age like I am.
I also fear that my modest retirement savings won’t be shored up by Social Security payments as I had once hoped. In fact, I now worry that when I retire, the social safety net will consist of Social Security employees creeping around my house at night looking for stuff they can pawn to pay down the national debt. That’s a lot of fear there. It makes people do dumb things. It makes people believe the most ridiculous things.
A lot of generous people out there want to help me overcome my fear. They want to empower me to take control of my retirement destiny. They promise to teach me how to transform my meek, disorganized savings into an army of financial conquest. I’ll need to pay them for this generosity, of course. Nothing worthwhile comes without suffering. Dozens of movie training montages have taught me that.
The thing that makes these teachers so astoundingly generous is that they won’t just help me shoot my retirement fears in the chest like I was Wyatt Earp. They will also teach me how to transform my humble savings into a huge, roaring pile of money, so I can buy opulent houses and Italian sports cars. Not only will I never have to worry about money again, I can make everyone else feel bad because they’re not as rich as me. It’s like these teachers are giving me a horse in a town where everyone rides goats. That’s a lot of greed right there. It makes people do dumb things. It makes people believe the most ridiculous things.
Fear and Greed are two of the four horsemen of bad decision making. Fear kicks you in the stomach, and then Greed punches you in the brain. Together they can make people do and believe almost anything.
For example, there are some dudes on the radio in my town who have been pimping their investment seminars for years. I turn on the radio in the bathroom while I shower, so I hear them on the weekends. They always talk about how much money their students make. Years ago the returns were impressive but theoretically possible. After a while they started talking about bigger returns, which I guess someone could achieve with a lot of luck. Then they began describing returns that you could only reach with a magic lamp or half a dozen senators in your pocket.
While I was shampooing my hair this morning I thought I heard these fellows say that their most effective investment technique is now yielding a 100% return every month. I assumed I was having a stroke, or perhaps hallucinating because a brain-eating amoeba was swimming up my nose. But as I toweled off a few minutes later they said it again.
Bear with me while I illustrate how stupid and outrageous that statement is. Say you took $10,000 and started investing with their technique this month, which is September. At 100% return per month, by Halloween you’re at $40,000, and by New Year’s Eve you’re up to $160,000. By April Fool’s Day next year you’ve passed a cool million, and by Halloween next year you’ve leapt ahead of Bill Gates to become the richest person on the planet.
In a little over two years you’ll own all the personal wealth on planet Earth ($223 trillion). Congratulations. My birthday’s coming up. My Amazon Wish List is updated, and I’d like either Mary Winstead or Allison Janney to pop out of my cake.
Of course this example is carried to a ridiculous extreme. But that doesn’t make it any more ridiculous than what these fellows are saying on the radio. Yes, they include a quick disclaimer that the results discussed aren’t typical and shouldn’t be used to make investment decisions. Their butts are covered. And frankly, I expect low-lifes to be low-lifes. It lends a certain comforting predictability to the world.
I am rather put out with the radio station though. This is an old and reputable organization, and since it operates on the public airwaves I think it bears a little responsibility for what it splashes across those waves. If this is the way it’s going to be, maybe I’ll start teaching people how to double their money every week using my secret, patented method for processing lithium out of cat feces and selling it to battery companies. Sure, it’s just taking advantage of desperate people, but Wal-Mart’s going to need somebody to mop their bathrooms.
Photo by Robert Paprstein
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Photo by ChiemseeMan (public domain).