Wednesday, April 20, 2011

Time to Invest in a Ponzi Scheme? Why Not?

Hey Everybody!  Let's Invest in a Ponzi Scheme!

This sad posting from CNN today about retired bus drivers putting their "life's savings" of $200,000 into a Ponzi scheme and losing it all.

At this point I give up.  Yes, put all your money in to one single investment.  And yes, trust the first fast-talking smoothie who comes along.  And yes, why not expect something-for-nothing?  After all, everyone ELSE is on the gravy train, why not YOU!


But this sort of thing illustrates the one problem with the 401(k) and IRA generation - many people simply don't know how to handle money.  And a legion of con artists and investment counselors will shortly relieve them of that burden.

In theory, the idea of being "empowered" with wealth is a swell idea.  But we have to first wean an entire generation off the idea of living the cash-flow lifestyle.

We will see many, many more stories like this in the future  - as more and more people retire with IRA and 401(k) savings and simply withdraw it all at age 59-1/2 (and not think about the tax consequences) and just buy a Porsche, or give it to some flim-flam man.

And then what do we do?