Money Management

The New York Stock Exchange has always been seen as a trusted investment institution where people become rich. The Stock Market has produced many millionaires who followed the right stock advice and invested in the right stocks at the right time.

Many average Americans have followed suit and put their faith in the stock exchange as a trusted wealth producing institution. They are happy to include their S & P Fortune 500 stock or two in their 401K or retirement plan.

Choosing the right investment often times is left to the professional financial planner or broker's investment research and 401K advice by trusting average Americans. The planner tries to diversify the investments. Sometimes they include gold or other precious metals because they know the gold price will rise during difficult economic times such as a recession.

The old adage "It takes money to make money" is true on Wall Street. The more money one has to invest, the better stock portfolio can be created. The average American has to count on their 401K portfolio that the company offers. Many long term employees bought shares in their company stock year after year.

In 2001 the average Americans learned a hard lesson with the highly touted Fortune 500 Enron stock. Whether you were an employee of the company or whether you or your investment consultant decided to include Enron as one of your investment opportunities, the collapse of the Enron Corporation destroyed these investors and their retirement planning dreams.

A friend of mine confided in me that he really took a hit with the Enron collapse, and he has to keep working beyond his planned retirement date. The Enron Employees lost everything.....their job, their 401K, and all their stock holdings.

Due to the greed and manipulation by the corporate heads of the company, the Enron collapse had an estimated loss of $618 million and eliminated $1.2 billion in shareholder equity. This should have been a warning to all investors.

WARNING: Greed and manipulation is a part of corporate America! We may never know how many individual lives were affected by the Enron collapse, just as we never know how many average American families' lives have permanently been altered by the abuses of corporate America in the housing and banking crisis of 2007-2008.

In a recent conversation with my brother he shared with me that his company's stock shrunk to $0.97 per share down from a high of $57.00 (December 2006). His company's stock portfolio was going to be the means by which he would pay for his three boys to go to college. But all he has left is a penny stock. I didn't need to ask how many shares he had; it wouldn't make a difference.

In 2009 the same corporate greed of the last two years reaches far beyond Houston, Texas, where Enron was located. Across America, from California to New York average American families who had pinned their hopes and dreams for the future on their stock and 401K investments have lost everything including their jobs and their homes. By now 8.5 million Americans have lost their jobs.

"Who do you trust?" Where can the average American go to invest in his/her future? Are we ever again able to believe corporate America, Wall Street Brokers, the New York Stock Exchange, Banks, Financial Planners to direct us to a place where one can locate a high yield safe investment? Does anyone have any other investment ideas as where to put their money?

Will my brother's stock ever reclaim the $57.00 value it once had? Can the average American trust themselves with an investment program of their own? Are they willing to do their own investing? Are banks and their 3% return on CD investments of $10,000 for 30 months the answer? Does the average American have that kind of cash flow to give to Banks?

What's the difference between a 3% return on $15,000 investment and a $15,000 return on a $3 investment? The first answer is cash flow. Most Americans may be able to afford the three dollars, but definitely not the fifteen thousand, and especially not for thirty months!

A lot of people are against gambling for a lot of different reasons. But the stories of Enron 2001, and corporate America 2007-2008, whom we thought we could trust have gambled away our money with reckless abandon with unregulated hedge funds for their own profit taking.

Which is worse -- to risk your own money or to give your money to someone else who could possibly gamble it away? What is the difference of investing your money in a low risk high yield Pick 4 investment-win or lose, or give your money to a stock broker who could gamble it away?

Every successful investment system is based on KNOWLEDGE & STRATEGY. If an investor of any kind gains this knowledge and learns the strategies, they can be SUCCESSFUL, too. But does the average American trust him or herself enough to handle his or her own investing? Or are we stuck with Corporate America?
Dr. Benjamin Spock once said: "Trust yourself. You know more than you think you know."