Monday, October 31, 2016

Betting on the Ponies

He said, "It will cost thirty euros a year."

I was examining the documentation I had printed off the internet while in a friend's kitchen. "That's without BTW. The actual price is 36 Euros a year."

My friend sighed. "When investment funds come knocking, it means they need money."

"So," I began to calculate, "If I deposited 650 Euros into a fund account, that is supposed to make a return of 5.42 % in a year, their mega dream publicity, then I will supposedly just maybe make most of the 35 Euros to cover the annual charge to manage the funds, and okay I realize that calculating the acruement of the money is more complex than what I simply defacto added up for a 12 month period. I mean I'd need to throw in a r and an n and a plus plus and some parentheses, a line and an x take it to the 2.  Back to basics: I can take money out or deposit money in and it will cost me 0.20% or is that 20 cents on the euro? So in fact to deposit 650 Euros I will have to actually deposit more likely 780 and then 36 Euros charge to manage my money? A deposit of 650 Euro will most likely cost me 816 Euro for the potential to earn 5.42% on 650, then watch it sink and float around the ocean of hypotheticharts? Do people sign on the line in astonishment after a weak cup of coffee and a near two hour waste of their time in a cell used by the banking investment specialists, for all the good intentions of the deficient in a few areas investors?"

My friend sighed, "Why are you considering this?"

"I am not considering this, I am merely curious about this phenomena." I went back to my calculations, after all the bank employee had suggested it, like I knew he would, when I specifically asked about another pension plan.

He said, "You can withdraw money anytime, but it will take two days to clear."

Ah, but he did not say I would not get 100% of the withdrawal, no, I was perhaps reading that I would get 80 cents per euro. "This is how they chip away at deposits. It seems to me that one is guaranteed to lose money."  I said to my friend. She shrugged as she stirred the pan on the stove. The man had indicated to me that a loss on 10,000 Euros, since I had asked about the challenge of financial devastation, would render the deposit to something like oh say 9,860 and then so on down the line, a slow bleed, so when do you want to take your money out, 80 cents on the euro, a quarter more or less of 36 Euros, and make a run for the hills?

My friend sighed. "Buy a lottery ticket."

Ponies. I had a friend once who regularly bet on the ponies.  I asked her if I gave her 20 dollars, would she place a bet for me?  She eyed me suspiciously.  We eyed each other suspiciously. I mean who was being honest?  She could place the bet on any pony and tell me I'd either won or lost.  She might pocket my money, all the winnings, she might be on the straight, she didn't want the responsibility of me gambling, losing or winning, she might want a percentage for the work.  She said I should come with her one day and place my own bet, which was the best answer.  I never did, too chicken, but a bank has the back up of well designed folders with diagrams, and small print about liability.

He said, "For 400 Euro, we will examine and select the best portfolio mix for you."

Instantly I imagined what that would be: A short look at my bank account statements and then the subsequent printing out of package 6D forms for the single middle aged lady. I mean, who are they kidding?  Something special for me? I looked over the information from the internet. It looked graphy, pie-y and official, it had the name of the investment manager on it, real personal.

Last year I followed some classes on Coursera on investments and it was plainly stated by the nice professor at Harvard that the only people who really do well with investments are institutions with big budgets and plenty, a mountain range, of dimes to spare. What next?  Well, next week I'll go back to the bank to look at mortgages their way. This should be most entertaining.

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