I had a dollar.
I put it in the bank.
“Are you crazy?” someone said. “Banks barely pay interest. Put it in a CD. That’s where you make money.”
So I put it in a CD. I made some money. And I put the new money into more CDs.
“Are you crazy?” someone said. “Look at the rates. And you’re locked up for months. A money market fund is where you should be.”
So I found a money market fund. And soon I had more money. Which I put into another money market fund.
Until –
“Are you crazy?” someone said. “Money markets are for saps. The stock market, historically, gives you better returns.”
So I put my money in the stock market. I picked large, safe companies. And soon I had more money. Which I thought was good.
“Are you crazy?” I was told. “Get into tech stocks. Those dinosaur stocks are a thing of the past. Tech stocks. That’s the place to be.”
So I invested in tech stocks.
And soon I had more money. Gleefully pursuing the next big thing
“Mutual funds, kiddo,” I was told. “Let them do the work. You can’t pick these tech stocks yourself. Find a mutual fund, ride the tech wave. That’s the ticket to big, big money.”
So I put my savings in mutual funds, riding the tech wave. And soon I had more money. And I thought this was good.
And then the wave crashed.
“Get out of tech stocks!” I was told. “They’re falling like an anchor! Energy stocks. That’s the safe place to be. There’s this firm called Enron. Get in. Hurry.”
So even though I had less money than when I was riding the tech wave, I transferred the funds into energy and Enron. And I thought this was safe.
And then it wasn’t.
“Run for the hills!” I was told. “Those no-good creeps! They lied. They cheated. Their balance sheet was fake. Get out of Enron. Buy real estate. It’s the only safe place.”
So I grabbed my money, even though it was less than what I invested, and I jumped out of energy and landed in real estate. And I bought a house. And I thought I was safe.
“Sell it,” I was told.
Sell it?
“It’s worth more than you paid for it. Sell it and buy another one.”
So I sold it and bought another one.
“Sell that one, too,” I was told. But what goes up can come crashing down
Pretty soon, I was selling them before I closed on them. Sometimes I didn’t even have the money in hand to pay. But banks would lend me money, even more than the house was worth, and on paper it all looked good.
Until it didn’t.
“Bail!” I was told. “It’s a sub-prime mess!”
So I tried to sell the houses, but nobody wanted them. So I lowered the prices, but no one could afford them. So I walked away from them and got nothing for them. And now I had much less money than when I started with the houses.
“Might as well invest in banks,” I was told. “They’re the only ones who have any money.”
So I invested in banks. And I thought I was safe. And then came last week.
And banks went under.
“Run!” someone said.
Where could I run? Where were they going? I was tired of listening. I was tired of believing. I decided to cash in, call it quits, take my investments and head for the sidelines.
So I took everything I had from years of following the “hot” advice, years of CDs, money markets, tech stocks, mutual funds, energy, housing and banking.
And I counted it up.
And I had a dollar.
Contact MITCH ALBOM at 313-223-4581 or malbom@freepress.com.
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