Never Trust Wealth Managers
There is no such thing as "wealth management"
For decades, Kathy Ireland has been portrayed as the image of pure success, a celebrity swimsuit model turned business mogul who turned one form of success into another, more lasting one. And, like most “success” stories, it not only turned out to be fake, but downright fraudulent.
Having graced the Sports Illustrated cover three times, the bombshell launched Kathy Ireland Worldwide (kiWW) back in 1993, quietly building a retail empire that would make her one of the wealthiest models on the planet.
At one point, Forbes - who dubbed Ireland a ‘super mogul’ - estimated her net worth to be roughly $420 million.
As Ireland traveled the world and her former doctor husband worked grueling shifts in the emergency room, the managers promised to take care of all of the couple’s personal and financial affairs, the lawsuit alleges.
‘Winters and Sterling induced [the couple] to grant them powers-of-attorney and to give them full reign over all of their personal finances and income,’ the court filings state. Winters and Sterling took absolute control over all aspects of the financial affairs of Kathy and Greg, promising to do right by them and make them wealthy.’
‘Based on the promises made by Winters and Sterling, Kathy and Greg believed they had millions of dollars invested by Winters and Sterling and that they had extremely significant net worth,’ the suit added. But the alleged ruse came crashing down when the couple, who have been married for 38 years, recently tried to help their son buy a home - only to find their application to co-sign on a ‘modest mortgage’ had been denied.
‘Kathy and Greg now know there are no substantial retirement accounts. There are no prudently managed investments securing their future, as promised,’ the court papers state.
‘There is no wealth securing their retirement and their children’s futures, as they were lead [sic] to believe. Instead, in the wake of [the managers’] misconduct, there was staggering debt, misused credit, secret loans, and missing funds.’
This is very far from a surprise. All wealth management is just gambling. If the managers place the right bets, they look very smart and responsible. And when they don’t, they look stupid and corrupt. But it’s the same thing either way, it’s just dependent upon the roll of the dice.
This is why every story about a successful billionaire involves one or more bankruptcies. The only secret to their success is gambling and their ability to convince people to give them a new stake when the previous one goes bust. And for every successful trillionaire, there are hundreds of similar gamblers who failed on their double-or-nothing bets somewhere along the way.
If you are so fortunate as to acquire or inherit wealth, manage it yourself. There will be no shortage of people telling you that they can relieve you of the burden of it and make you even wealthier while allowing you to focus on what you do best, but the reality is that they will use it to secure themselves a comfortable living on the basis of fees that get charged whether they increase or decrease what they are managing.
This, of course, is why both the wealth managers and the corporations in which they are invested are now seeking to be backstopped by the various national governments, because their whole unproductive house of cards is on the verge of collapsing again.
If you want to get rich without doing anything productive, content yourself with betting on sports. At least then you’ll know when you lose, before you’ve lost everything.
I come from a wealthy family where we have had lots of people trying to get their hands on our money for my whole life. Let me give some examples of common ways that people try to separate you from your money, examples of good ways to invest in yourself, dating and marriage relevant examples that I've seen. This might end up being a pretty big wall of text but I hope that it isn't too gamma and I believe that it will be useful and insightful.
First of all there are always vultures out there even at the entry level of going up the wealth pyramid. People running scam businesses target people buying starter homes in nice areas. You know that new style of home that's about 2,000 sq/ft with no yard. Yeah those neighborhoods are huge targets. The scam businesses know that the people living in those homes between family and home equity can easily raise about $50,000 and when they lose it not have it destroy them enough to start making huge complaints. It will just cause family drama and the scammers don't care about that.
When my wife and I bought our first house we had neighbors who had a business and they wanted to be friends with my wife and I and more importantly to meet my parents. When my wife and I wouldn't make the intro they stopped wanting to be friends. A few years later the wife was arrested for running a scam business and she actually went to jail where I think she still is. So watch for that. A lot of people set themselves back a lot by investing 50g's in these one step above a ponzi scheme "opportunities."
Next when you move up into the neighborhood where the houses are in the $1,000,000 to $2,000,000 range, you get a new set of scammers. These people will be "investors" or "entrepreneurs" and they have an opportunity for you. They want between $150,000 to $300,000 for whatever. They might even have a real company that is about to be listed on the NASDAQ. These ones you get real stock shares that you can track but you have a restriction on when you can sell. They are basically pump and dump scams that barely stay 1 step ahead of the SEC. On these, if you are careful and if you sell the instant the restriction lifts, you can usually come out ahead because the targets aren't the ones who know the game, they are the ones who think that they've bought the next huge tech stock or huge oil stock.
My dad gets mixed up in these from time to time. He had one where he invested like 50k and it went up to $2,000,000 with his restriction lifted but he wasn't paying attention and it went to 0. Now whenever I hear that he's gotten mixed up with one of these, I take over management of it and I sell the instant the restriction lifts. My dad things I'm a genius who is good at investing.
You have to understand that the moment you start moving up the economic totem pole even on a basic level the Sharks are going to start to hunt you. They are at your church. I'm Mormon who grew up in California and lives in Utah but it doesn't matter if you are Mormon, Catholic, Protestant or Evangelical the sharks are waiting for you the moment you step foot in a church in a well off area. I know that the sharks are waiting for the good Catholics at St. Isidore church in Danville, Ca. When you start going to a church in a good area, you have to be on your guard.
One of the ways that you can quickly identify the scammers and thieves is when a new family moves into the congregation and they immediately get involved. This new perfect looking family shows up and they are volunteering right away and of course they magically happen to have a business or a "wealth" management consultancy or whatever. You see that one a lot.
Higher up the economic totem pole relationships become complicated and have a lot more interest in them. One of my family's closest friends is a family where the husband is a shady finance/real estate guy. He hasn't had any run-ins with the SEC that we know of but some of his friends have. One day my dad was bragging at church that he had just gotten a really big check for a certain amount. We go home and the friend comes over and says that he has a great investment that is a sure thing for the exact amount of my father's check. My mom was gave him the "oh hell no." And here's where it get really complicated, he really is our friend. One of his sons is one of my closest friends and my children refer to him as their uncle. He certainly is a better brother to me than my own brothers. You have to understand with some of these people is that they are sharks and its just in their nature
When it comes to investing some of the things that my family has done that have worked well are: buy a nice home and keep it up to date. In our inflationary environment real estate tends to go up at least at the rate of inflation. When you upgrade the kitchen or master bathroom you can get a dollar for dollar increase to the value of the home plus it won't affect your property tax. You upgrade your home and you get to enjoy it while storing your money in it. You can use your home as a piggy bank. My parents have used their home to fund other real estate ventures, purchases or assets, funding for an extra business they founded, etc. Houses are really great that way.
Next invest in your children. Get them out of public schools. Even well off public school kids are public school kids. Have your kids around a higher quality of kid and family. Plus this gets them around well off kids and helps them build up a social network of people going somewhere. Invest in your kids playing sports and daughters in dance or whatever. This gets them active, off screens and social while building their bodies and teaching them to compete.
Build relationships and use them for your children. Be absolutely shameless about calling in every favor you've ever done to get your children a good job out of college or whatever. The elites and wannbe elites don't believe in the whole pull yourself up by your bootstraps nonsense. That narrative exists to get suckers to sell off their assets to the sharks. I've seen families be absolutely ridiculous the ways that they pushed their children to get hired and guess what? It worked. Now those kids are in their 40's and doing very well. This is doubly important today because White men only get hired to premium jobs if they have major contacts and support ramming through their hiring.
Those are the best investments. House, sports, education, useable relationships.
Now when it comes to dating and marriage this is another place where the sharks will show up. From my family, one of my brothers married an insane gold digger, one of my sisters married a gold digger and career advancer guy but they do seem to love each other and my other sister has 2 gold digger husbands on her resume and is likely looking at becoming a single mom because her current gold digger husband and father of her 3 children is too blatantly stealing the money probably to run away and he's losing interest in keeping up appearances.
When your family starts moving up you are going to pick up people who want a piece of the action along the way. This very much applies to relationships. My family's California house is impressive looking. When my siblings brought their boyfriends or girlfriends over it always made that person want to escalate the relationship. With my wife, I never took her to the California house until after we were engaged. My other brother did the same with his now wife. They didn't go to the house until after they were married. We are the 2 siblings who don't have ridiculous gold digger spouses.
When it comes to dating you should try to marry within your race, religion and economic class. This is even more important if your family is successful. Marry close to your economic class. If your family is well off, marry a girl who's family is similar. This is important because you can also leverage your father in law and your in laws to help you advance. It is a good way to build your rolodex.
If you marry up financially be prepared for a couple of things. First of all she is going to have certain expectations. If you can't meet them it's going to cause problems in the marriage. Second, if she has expectations and her family expects you to provide them, what are they doing to help you get the means to meet them? There's a great line in the movie Limitless where Deniro says, "You didn't have to do that shitty first marriage to the girl with the right father." So if you marry up and your inlaws expect certain things from you then they better be pushing you to their friends to get you a premium job.
Let me say one last thing about the article. Never sign power of attorney to anybody who isn't your spouse and only if you are sick and a threat to be incapacitated soon. Never let anybody borrow money in your name. That always ends in a disaster. There are legitimate financial advisors who will keep your money growing at or slightly above inflation. There are semi legitimate ones who can usually keep your money growing faster than that but there's more risk. If a financial advisor ever asks you for power of attorney or the ability to borrow in your name, run away fast.
That's everything in my wall of text. I hope it wasn't too gamma and that it was helpful. It's based on a lot of stuff I've seen over the years and can keep you out of a lot of trouble.
The "experts" will argue.
"What makes you think you can manage your wealth better than I can?"
-I give a damn, and if it fails it hurts me. It's more than just another account to play around with.