401K destroyed the market

Way back 20 something years ago I remember working at a company that had just gotten large enough to get 401k offered to it's employees.

I remember being packed into the conference room and a group of bankers whom I had never met before had a presentation about 401k's I sat and listened to their presentation and then was handed a form to fill out so I could have money deducted from my pay check to go into the 401K.

I passed on the offer because I did not understand where the money was being invested. When I asked my Father who is an accountant he told me it was being invested in large fortune 500 companies like the DOW group.

Yesterday it dawned on me, nearly 20 years later that the investments of everyones money in these fortune 500 companies was a scam. I always felt that by investing in a company you were showing confidence in the company. But when a banker sells you on a 401K and gets to play with your money and invest in companies with out your approval it is a manipulation of the market. The money from millions of people gets tossed around like a gambler in las vegas who has 2 girls on his arm and a tall glass of scotch. They dont care about the peoples money they only care about making a profit. Well I guess that is the American way, but to me it is the destruction of the free market and the destruction of America.

I remember the old saying, "if its to good to be true, then it probably is" Well any time someone tells me that they will provide a retirement fund to me for only a few dollars a week, that to me is a scam. For some reason though the 401K and many other retirement investment programs are widely accepted as the standard.

In reality the investment of money in companies should be a personal investment done after research and building a confidence in the company. It should not be handled by bankers in a mutual fund that can go belly up. I prefer to keep my money in the bank where it gains a small amount of interest, and at any time I can take it out and secure it. It may not gain as much value as some of these scammers offer, but at least I know it can't go down in value and I can get it out in less than 5 min.


[edit on 27-5-2009 by robwerden]

From the time I was 18 the company I had worked for was continually pushed 401k enrollment and purchasing company stock. I always declined, partially because I was 18, but mainly bc I just didn't understand how they could take care of my money better than me, honestly who is more concerned with my future, me or a bunch of people who don't even know me. I also don't play the stock market for that reason, essentially whatever you put in is a loss unless you take it out at the right time, otherwise it has always seemed like a game to me, a game in which little people always lose. I did find it incredibly comical when the company began doing poorly (it has recently went out of business) and everyone that maxed out their stock options where shaking in their boots and the money I would have put into it was sitting happily in the bank. I understand that scared money doesn't make money, but I still have my scared money plus interest.