Forum Post: Small Investors: Walk Away From Wall Street!

I’m going to walk away from Wall Street – and take my money with me.

I am a small investor, with enough inherited capital to get my kids through college and fund a decent retirement. I’m something of an expert in my own field, and have a good lay-knowledge about other topics such as finance and economics. But I know my limitations, and so I have an advisor who disperses my legacy among an array of funds. I am politely asked to approve movement in or out of any fund and I habitually grant it, despite my having no real understanding of what I’m investing in. My modest annual reward is to stay ahead of inflation, earn a couple extra percent when times are fat, and not suffer the worst when times are bad.

Preserving my limited capital, I am told, is a worthy achievement. And I would probably accept it as such if Bankster culture didn’t so obviously illustrate that there is real money being made on my money, and that of millions of small investors like me. Supercomputers usher my dollars around the world day and night, stirring up volatility and then exploiting the fitful ups and downs in the same split second. If I could trace one of my own hot bucks, I’m sure I’d find it earning a Frankfurt pfennig betting against Greek bonds before I have coffee, tuppence on London gold while I drive to work, a nickel on a lunchtime layoff in Ohio, a thousand Yuan on a Chinese toy manufacturer’s third shift, and 9/10ths of a cent on the endless gush of Saudi crude. I’m sure it occasionally even gets diverted through a Sicilian laundry or Afghani opium market.

Extrapolating from the obscenity of their wealth, I have no doubt that the Banksters are divvying up at least a dollar’s annual profit from my dollar, including the three to six percent I get. I don’t fault them. The gazelle doesn’t cry foul at the lion’s strength and speed. But against the Bankster’s superior information and ability to act on it, I can only be a gazelle, relying on the arbitrary safety of the herd to nervously nibble my daily ration of sweetgrass. If I want any more than that, I shouldn’t live on the savannah.

Despite being a victim of the sour job market, I have felt unaffected by the Bankster arrogance until the economy started taking on water again in August. I grumbled to my advisor about getting off the rollercoaster. My loss of faith, I told them, was not in our economy’s ability to recover, but that the eventual winners wouldn’t include me. His answer, couched in axioms and assurances, was essentially that I am lucky to be earning my trifling portion. Asserting that I must have greater hope than simply to tread water indefinitely, I was politely – even pityingly – rejoined: What choice do you have? that is, where else but the financial markets can a small, unsophisticated investor put his money where it will at least be protected against inflation? Just sign ze confession.

The implicit lack of an alternative has always led to my tepid decisions to move my money around the market and hope that my advisor’s self-interest would keep the Banksters from draining me. But the explicit, condescending positing of the question shattered my self-imposed helplessness, and actually made me consider the question beyond its rhetorical intent: What are my choices for earning a return on my capital, on and off of Wall Street?

It turns out that, while my capital amounts to the tiniest drop on Wall street, it is considered real money on Main Street, where many solid small businesses are starved for capital to expand or improve. Even on its heels, America is as full as ever of innovators and entrepreneurs who don’t think that the world owes them a big IPO. Best of all, I can understand what they are talking about: opening a pizza shop, developing a useful iPhone app, In my own case, I have decided to build a maple syrup business on some property I own in Vermont. I know what the product is, I know how it’s made, I know who buys it, and I know what it’s worth – and the potential return beats my paltry Wall Street small investor’s wage.

In a healthy economy, financial markets play a crucial, but not central role. In our current dysfunctional economy they have crowded the stage to play a dangerously disproportionate one, having become their own bubble – and when this one pops, I don’t want to be close. So this investor is walking away from Wall Street, and I hope others like me will do the same.