I just had to inform everyone. NEVER NEVER start a college fund for your child. 13 years ago I started one for my child when she was one year old with Morgan Stanley/Dean Witter.
I called, as I remembered it today and had never received any statements in all these years.
I figured there would be a few more dollars in the account after 13 years, after all it is a college savings account that is suppose to earn money and the stock market is UP.
Well, I got a Huge Shock! The amount left in the college fund started with $500 is only $175.00 After 13 YEARS!
So... the fund lost almost 3/4 of it's value! No fees were involved, all just bad investments on Morgan Stanley's part.
How typical of the Wall Street banks. A College (Coverdell ESA account) is eaten up by their Wall Street bad investments for the clients but good investments for themselves as they bet against what they put your money into.
When talking to them today, their attitude was "Oh Well" that is how it goes.
I told him, I had not had a choice of where the money went to and they are the ones who invested it.
He said they had put it in technology stocks in 2000 when the stocks were at the top of their market. He tried to make me feel better saying "Well within 3 years it had gone down to $75 and then it went up to $125. Then it went down again to $88 in 2007 and so it has doubled since then."
I laughed not in a nice way and said, yeah doubled since 2007 but loss about 3/4 over the 13 years! I did let him know what I thought of how they invested other people's money!
His attitude was of complete boredom and could care less about it.
If only I would have put that $500 in gold or silver in 2000, then it would be triple or more in value instead of a loss.
Oh, one other thing... I can't get the $175 until next week. They wonder why people dislike them so much too...
I will NEVER invest money with any Wall Street firm again.
By the way, putting money in an IRA and giving it to a Wall street bank is just like a college fund. When they lose your money it is "Oh well, too bad for you attitude."
I will be interviewing a company next week and will put it up on the blog about a new way of investing with your IRA. It is where you can hold physical gold and silver at home yourself and it is still considered an IRA yet you have the physical personally. I have put the banners for them on the side - Perpetual Assets. It will be explained more next week.
Don't trust anyone with your investment money, (especially Wall Street banksters) except for yourself. That is my opinion.
I learned my lesson... NEVER NEVER GIVE YOUR MONEY TO A WALL STREET FIRM, ESPECIALLY MORGAN STANLEY TO INVEST!
$175 will cover the cost of a textbook.
ReplyDeleteOr a set of used tires for a car to drive at college.
Or several dozen Starbucks coffees.
Yeah, isn't that amazing the cost now a days. What is funny, was I was expecting 13 years ago to have enough in that account for more than one text book. It is so frustrating that they loss all that money. It may not be much to some, but it is a lot to me.
DeleteThe equivalent purchasing power of that money (in todays' dollars, assuming an annual inflation rate of only 5%) is $942.82. That is derived by the equation [(1.05)^13]*500. Were you to use the inflation rate of 10% (which is more realistic), the sum is $1726.14.
ReplyDeleteAssuming the latter example is true, you didn't lose 75%, you lost 90% of your money.
Everyone wants to increase their money, but that always requires a level of risk. If you store your money in a local currency, your purchasing power be inflated away. If you store your money in terms of precious metals, you preserve your purchasing power, regardless of what happens to the local currency you're forced to use. In other words, putting your savings in PMs usually won't garner a "profit" in terms of purchasing power [unless massive distortions suppress this characteristic- something the Fed is actively doing], but you have no inflationary risks and no counter-party risks.
I would recommend keeping an eye on Craigslist or your local coin dealers; buy silver bullion as time and funds allow (a 1-oz. coin can be had for as little as $23-24), and stash it away. It's untraceable, instantly recognizeable, fungible... I've only got about 250 oz. right now, but I'm still buying, and will continue to buy... most likely, it'll be the college fund for my kids, but I've got another 14 years to go of saving.... :)
Yeah, the amount of money I actually loss is huge in 13 years times by your calculations.
DeleteIf this guy had the same interest payment as the banks get on house mortgages, he would have money for one semester.
ReplyDeleteSherrie,
ReplyDeleteI find the contents of your recent post about your daughter's college fund odd. College funds are legally supposed to be conservative in nature. As a former (recovering) advisor I can tell you they should not have bought tech stocks. Typically a college fund would be diversified among major indices which are up about 20% in that 13 year period. Gold would have more than preserved your purchasing power, up about 5 fold in that timeframe.
Yes, I told the guy that too. I asked why they put it in tech stocks at the top? Why did they invest it in such bad ways? I told him that is what I got for putting money with a wall street firm. 13 years ago I had no idea that banks are a bunch of scum bags as I do now. I am still frustrated and upset that over 13 years they did such a bad job! UGH!
DeleteHome educate your children and withdraw all your money out of the criminal banking system. You will have to keep a little in there as they have near total control of your finances through 'direct debit' and debit cards, etc. Silver is the one to invest in as its value is being kept artificially low. Trouble is, when a government gets too corrupt it will confiscate any private individuals precious metals cache.
ReplyDelete