Bernie Madoff is the investor who bilked billions (that is with a "b") from hardworking people by pretending to have a computer system that took advantage of stock market swings. The total of money swindled reaches totals close to $60 billion.
A recent book written by Sheyrl Weinstein profiles Bernie though 20 years of a personal love tryst that she enjoyed. In the end, the charitable trust she represented lost all the money they had placed with Bernie. Sheryl, her son, her "old" mother and friends all lost everything they had with Bernie. Apparently Bernie has Tourette's Syndrome which causes an involuntary blinking of the eyes. Sheryl also discloses in her book that Bernie apparently wasn't well "endowed" physically. She gave him the nickname of "Winky Dink". Being branded with a name like that made her feel good and it is downright funny.
The lesson learned from being associated with "Winky Dink" is "never trust all your money with one person". Bernie was so beguiling that many of his clients placed everything they had with him to manage. He produced phony monthly statements for over 30 years and when he finally confessed, his clients lost everything. Actually I have a mistrust of anybody wanting to manage my money. My trust can be earned over time, but that takes signifant effort.
The second lesson is to invest in "good stuff". A CD at your local bank doesn't pay the highest rate of interest but it is insured up to $100,000. Government backed mortgages such as Ginnie Maes are gauanteed by the full faith of our U.S.Treasury. Some municipal bonds can be purchased that are insured. If you buy stock, buy something with a future, not gold mines in South Africa.
My point Grasshoppers is that we should learn from "Winky Dink". If an investment sounds too good to be true, it probably is. Never place your money with one investment firm. Buy good "stuff". Pretty simple huh?
So ends my first contribution to my wisdom effort. Stay tuned!
Love,
Dad