If you recall, I recently made a trip to New Orleans. We stayed at the Hilton Hotel – Riverside – which was strategically located across from Harrah’s Casino. When rain struck the city, we took it as an opportunity to stroll through the surrounding slot machines.
An Epiphany of Sorts
A few minutes earlier I was sitting in my hotel room watching TV while Miss Blinkin was getting all pretty. Every other commercial was for Fidelity Investments or TD Ameritrade. The constant theme of the commercials was to assist a hand in your journey to retirement. It doesn’t take a rocket surgeon to realize that these companies profit from their services but their goal is to grow with you. Simply put, their goal is good.
A Donk of Sorts
While I was watching these commercials, I was reminded of a conversation I had with a financial advisor. He had a client who was unhappy about commissions and fees. Specifically, he was being charged $50 for an institution to house his IRA. He overlooked the thousands of dollars his investments gained and withdrew his money only to earn less than a hundred dollars the following year. He essentially paid thousands of dollars to avoid a $50 charge. This is the irrational behavior that drives me nuts.
A Question of Sorts
As I was walking through Harrah’s, I was forced to watch people pour money into slot machines. Slot machines that will likely leave them penniless. These people have NO CLUE how the slot machine works or what the odds of winning are. But still, donk after donk continues to pay to play. Actually, the donk that wants to avoid a $50 brokerage fee is the same donk that puts $50 into a slot machine without a second thought.
- How come companies that help you save for retirement have to advertise harder than casinos that want to take your money?
- Why do people freely spend money at casinos yet view the stock market as a gamble?
To get an idea of how much money casinos take from people, lets look at the men behind the business.
Edward Johnson III
In May, Johnson stepped down as Chairman of Fidelity Investments. Ned joined his father’s company in 1957 and became President in 1972. Ned is responsible for rapidly increasing Fidelity’s market share by offering funds for nearly any investment strategy.
Ned is ranked #44 on Forbe’s 400 with an estimated net worth of $6.5 Billion.
Sheldon is Chairman and CEO of Las Vegas Sands Corporation. As far as hotels and casinos go, he is the man. I want to add that he has donated A LOT towards Cancer research which I greatly appreciate.
Sheldon is ranked #8 on Forbe’s 400 with an estimated net worth of $21.5 Billion.
Tell Me How This Makes Sense
A college drop-out amassed 3x the net worth of a Harvard graduate. The guy that openly tries to take your money has more success than the guy trying to help grow your money.