Uninvested: How Wall Street Hijacks Your Money and How to Fight Back
August 05, 2015
In Uninvested, Bobby Monks urges us all to wake up and take control of our money and our investing.
"Most Americans have surrendered control over their financial futures to investment professionals who win even when they lose. In this clear, concise, compelling book, Bobby Monks tells why and how to reclaim power over your money from brokers and mutual fund managers who put their interests ahead of yours."
—Paul Steiger, executive chairman of ProPublica and former managing editor of The Wall Street Journal
Wall Street is systematically taking advantage of millions of Americans. Regardless of whether they deliver good returns or not, our money managers make fortunes for themselves by charging us high fees that come right out of our collective pockets.
In Uninvested: How Wall Street Hijacks Your Money and How to Fight Back (Portfolio; August 2015) Bobby Monks urges us all to wake up and take control of our money and our investing.
Why is it so hard to know what happens to our money once we hand it over to money managers? Where does it go, who is managing it, and why are there so many fees? The bad news is that investors are getting systematically fleeced. The good news is that Uninvested can help change that.
The problem is two-fold: most money managers aren't truly invested in their clients' best interests. And because most investors are overwhelmed by the complexity of the financial system, they've ceded control to money managers, divesting themselves from the process. Monks arms readers with strategies for renegotiating their deal with money managers and protecting their portfolios. He also empowers investors to help fix our broken financial system with an urgently needed call to action.
During his career as a banker and borrower, investor and entrepreneur, Monks has had the opportunity to witness firsthand the evolution of American investing and the rise of the monolithic financial intermediary complex. Drawing upon original research and interviews with key figures such as Vanguard founder Jack Bogle, legendary investor Carl Icahn, and former Congressman Barney Frank, Monks explains how the financial sector got its hands on so much of our money, why this is the moment for reformation, and why investors are the one and only force powerful enough to fix the system.
- How money managers are exploiting investors: Fees are so high that investors may forfeit hundreds of thousands of dollars, even millions, over a lifetime. And the default financial services business model is fundamentally unfair: investors pay fees to money managers who keep the money whether or not they actually deliver returns. And, because of system's incentives, many money managers focus on gathering assets rather than making money for their clients.
- How we got here: In 1950, 97% of public equities were directly owned by individual investors. Today, 75% of public equities are owned by institutional investors via mutual and pension funds.
- The problem with low-cost index funds: Though index funds have led a trend toward lower fees, they don't solve all of our problems; they reduce the value of corporations, enable irresponsible corporate behavior, and drive widening inequality between America's 99% and 1%.
- Why picking stocks is underrated—even for novices: Cutting out the middlemen, buying stock in companies in which you believe, and participating in corporate governance through proxy voting is a valid path to financial and ethical investing. Rather that outsourcing the entire investment process, you can pay for advice when and if you need it.
- The importance of choosing the right money manager: It is vital to know how to choose financial firms and money managers that have a fiduciary duty to their clients.
- The reality of 401ks, IRAs, and the "corporate match": While the 401k and IRA can be useful tools, investors need to go in with eyes wide open. Tax advantages and employee matching policies can obscure the impact of high fees and conflicts of interests—even kickbacks—pervasive among these investment types.
Uninvested is an optimistic call to action for investors to fight back and maintain control of their financial health, values and future.
ABOUT THE AUTHORRobert "Bobby" Monks is a serial entrepreneur who has founded or led multiple businesses in the financial services, real estate, media, and technology sectors. He was chairman of Spinnaker Trust, managing over $1 billion in assets; chairman of Institutional Shareholder Services and Proxy Monitor, the two largest corporate governance and proxy voting services; and founder and director of Atlantic Bank. Monks is on the board of ProPublica. He lives in New York and Maine. You can follow Bobby on Twitter or on Facebook.
For more information, please visit: http://www.bobbymonks.com