The Read&Delete I.R.A Month

July, 2000

 

Greetings, shadow investors! 

Today we look into the future...... and shudder, as we review places to put our money-- hoping to find it again later.

Investing is a scary business...... 
Nowadays it's hard enough work just keeping us fed, dry and clothed to the minimum legal requirements, without stressing ourselves out from hoarding our pennies and trying vainly to 'put something away' for our later years. But secretly we all look hopefully towards that glorious day when we can quit our jobs, lie out in the sun, and let the world go by. Retirement---- it's that time we all look forward to--- when we can stop slaving away at our lifelong careers and spend our "nest eggs" on well deserved rest- of sorts. We've all seen those lucky elderly people who can spend their days relaxing out in the park, playing checkers and talking about the old days, until evening comes and they cover themselves with old newspapers and sleep out under the streetlights.

       If you're like me, you probably have a retirement plan that includes an  "I.R.A." (an acronym meaning-- Investments Run Amok) where you put aside a little money each month into an special account "for the future", as administered by an investment "specialist" (like Jack Kevorkian). The IRA is a personal savings account that can pretty much assure you that you will not need to look around for a shopping cart big enough to store all your  belongings in. At least not for a while. An interesting feature of the IRA is that the funds you invest are not taxed until you withdraw them-- and actually need the money. So the feds get their 14-33% when you retire. So, in effect, you are saving up to pay your taxes.

       Most companies have an IRA plan for their employees, as a work benefit. The company will actually "match" a percentage of the employee's contribution to the IRA plan-- in order to keep the workers from keeling over at their desks as they worry about their future. (Most of these plans are referred to as a '401-K', which in itself is an item of conjecture. Does anyone really know the true meaning of '401-K'? My pet theory is that the term '401-K' is part of the secret number of the Swiss bank account where all the money is hidden.)
Once a year these companies distribute an "IRA performance report" that attempts to explain the outcome of all the deposits, transfers, dividends, launderings and embezzlements involved on the road to the end of your rainbow. This report is heavily embellished, and includes a prospectus that can easily qualify as the numeric equivalent to the Siren's song. "104% growth!", you exclaim, "Wow! Sign me up!" No human can resist these numbers, except for the plan's author and the SEC. (Securities and Exchange Commission-- or Wall Street's neighborhood watch committee) Read the fine print. There are more contingencies lurking there than what you can find in Darva Congor's prenuptial agreement-- stuff like-- "Results not guaranteed for any investments made on any day of the week that ends with a 'y'." 

     The company will also distribute a listing of possible investment choices, so you can come up with your own plan for your financial 'future'--- a personal recipe of potato soup for the soul. It is here that you make the choices that affect your well-being to be, as it were, by simply filling out the form.

     Here is a list of some of the IRA investment choices available to the average schmoe on the job:

     Disappearing Equity Fund- This is the 'old money' investment option, putting money into long established, big name corporations that use 'proven' (meaning antique) business methods. These are the corporations that hemorrhage capital and hire new CEO's every year from the management circuit, each one promising to 'turn the company around'. The problem here is- that the company has already turned around so many times that even the stockholders are dizzy, and the management team can't even find North, let alone their organizational plan. The annual report says something like- "We had major growth last year-(at least on paper) but we just can't remember where the money went." The truth is, the money went with the departing CEO, after he strapped on a parachute and bailed out with a splendid severance/retirement package (your money). Don't consider this as an investment. Think of it as a charity.

      Morbid Growth Money Market Fund- all of the fund's reserves are converted into copper coins, which are then buried in moist acidic soil until they turn green. At best this fund's performance is consistent (consistently weak) and usually unable to keep up with inflation. The money market is zero-risk, as compared to most other investment options. Plus, the results are guaranteed. All in all, over time you *will* lose money. 


       The Gee-Whiz-Bang Hot Technology Internet Start-Up I.P.O. Day Trader -- Right Now - Sky's The Limit -Get In Now Before We File Chapter 13- Insider Fund. Otherwise known as the emerging-merging technology market. This is what's REALLY HOT right now. You can choose from a plethora of hi-tech
companies that promise exponentially rapid growth. The risk is manageable here. If the company doesn't go belly up in the next 24 months, they'll be bought out by somebody else, who probably will.

      The Top-Heavy No-Load Clock-Watcher Mutual Fund. (my favorite) This fund will inform you of every dime you have contributed into the plan. Unfortunately, they inform you by mail, each weekly statement costing $.25 in "bulk-rate" postage. (This one really happened to me, I'm not kidding about it.)

     The International Growth Fund. Here you can invest your retirement savings in companies located overseas-- in countries that have a vested interest in blowing us off the map. The potential benefit here comes with time. As more people invest in this fund, more of our financial wizards and MBAs are sent over to 'efficiently manage' the industries over there, implementing new ideas daily (like "work smarter, not harder"),. until all local businesses (and the government) collapse under the weight of their new high efficiency administration. Ironically, this fund may actually save the world.

      Population Growth Fund- This investment can go either way. A lottery is held and each of the group's participants gets to draw three names of newborn infants from a hat. When these children grow up, that fund holder gets 15% of all money they earn. The group participants then realize that their future well being rests upon the future well being of their newborn friends. This is a vested interest fund in more ways than one.

     The DNC (Democratic National Committee) Fund- The money's there isn't it? Who cares where it came from! Just don't ask any questions, and you'll get your share.

Last but not least........

     The Self Directed IRA - At age 65 all of the participants in this fund are given shotguns and ski masks and are instructed to fend for themselves. 

     In my case, it doesn't really matter what plan I use, as the outcome isgenerally the same. (This is a true story) I don't talk about it much, but the first time I put money into the stock market was in October 1987, two
days before the market crash. I was wiped out before the check cleared the bank. A good investment strategy for you would be to watch where I put my money--- then do the opposite. It's not my skill really, it's my luck. I've said it a hundred times-- I have no luck. It could be raining $50.00 bills outside, and I would catch a handful of subpoenas. The last horse I ever bet on (in 1982) was nine lengths ahead when the jockey fell off. I think he was struck by lightning. I bought a lottery ticket once, and matched more numbers to the parking ticket I got while buying the ticket than to the drawing itself.
     But I digress-- again. The point is that there are a lot of roads to choose for the future, and we should all plan wisely for it, whatever our income is right now. The IRA is a splendid way of investing for retirement,
regardless of how I kid about it. Just keep an eye on your plan and whoever is administering it. (If it's Michael Milken-- GET OUT!) In the meantime, I will be prudently putting money away for the boys' college tuition. After that, I'm reasonably sure I'll be able to afford a nice split-level packing crate down by the docks (sea air is good for you) and still have enough left over for a couple of sport utility vehicles. I test-drove a few of them the last time I was in the supermarket. I like the ones that are big enough to hold at least three cardboard boxes of clothes and an old sleeping bag, and wiggly wheels come standard.

Gotta go....... my bookie -- (excuse me--broker) is calling with a hot tip.


Neil