Smell What Goldman is Cooking?

I guess life at Goldman Sachs has gotten a tad stressful.  As you’ve probably heard, this Goldman executive Greg Smith, who has made millions for years, decides he’s been wronged and exposes what others on Wall Street have been bitching about for years: Goldman may not have their clients’ interest as a top priority.

Greg Smith’s accusations are comical. In fact, other Goldman employees must have had a good laugh as well. I mean, Goldman employees called the foolhardy clients “muppets,” right?  Institutional investors placed Goldman in such high esteem that Goldman could basically name their own fee structure.  Why do you think that these highly intelligent and sophisticated clients would defer decisions to Goldman? Just remember my mantra: the more complicated/slick the investment, the higher the fees you can get away with. Generally, when the investment option is simple, its fees are transparent. When an investment appears opaque, the built-in fees are difficult to compute.

On a side note, I know a couple of Goldman Sachs partners, and they are some of the nicest gentlemen I know. But try asking them to divulge a story or two about the “guts” of Goldman over drinks. Forget about it. I’ve gotten no information, and I’m usually pretty good at getting folks to open up. I’d have better luck getting stories from a CIA agent.

My point is that when a Goldman robot finally blows the whistle,  you now know that no corporate secret is safe. Whistle blowers are everywhere and they can’t wait to talk.  Do you know what the repercussions will be from the Goldman Sachs expose’?  To start, I smell a congressional investigation in our future. Next, more disclosure of fees and commissions. Commission disclosures won’t stop with investments;  they will migrate to annuity products.  Commission disclosure forms signed by annuity buyers are inevitable.  As a result, it may be tougher for an annuity salesman to talk you into a sub-par product. Just make sure you know the forms you are signing!

Pay It Forward:

“If you love what you do, you will never have to work a day in your life.” Sounds wonderful, right?  I think we carried this a little too far when educating our youth. We now have way too many singers and not enough trained electricians. Life is not easy. It takes a good salary by both parents to raise a family. Let’s get a little more realistic with our college kids.  I love the headline from The Onion on this topic:  “Man Who Loves What He Does for a Living Needs to Borrow 50 Bucks.” Says it all.

Earl E Bird

I'm Earl E. Bird and I am very concerned about saving for my senior years. I am amazed at the stumbling blocks that exist when saving for retirement. That's why I take my time when making decisions on building my nest egg.

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