I am ashamed to have been part of it
murtza.org
murtza.org
You also contradict yourself, saying how you feel implying that you feel bad that you helped rich people get richer, then at the same time say that you didn't really help anyone do better than the market (which in 2011 closed at near 0 growth)
I work in finance for a much larger bank than you do, and I take that paycheck (which isn't any higher than what an well paid engineer gets in the valley) and invest it every night in a home, food, and debt. Then I take the spare time I have left over and design software to help mentally and emotionally disabled children.
You can sit around and blog about how sorry you feel about the money you have in the bank, or you can do do something responsible with it and turn it into a real contribution.
This is the story of the fox and the grapes. The fox was trying to get to the grapes. But they were too high for her, she couldn't reach them. So she said "oh well they are not ripe enough anyway" and walked away.
Also, I wanted to write this blog post while working, but that probably would have gotten me fired at the time.
He also recommends passive investing, but a lot of indexes like the SPY and DIA are managed and correctly priced thanks to a lot of firms (probably including some big banks!) at Wall Street.
However, there's still some value in having a human who's somewhat familiar with you and your personality pick up the phone when you call to execute a trade. Most of the value that advisers offer is getting you to stay in the market over time by keeping you from making stupid decisions. They're certainly incentivized to do so, but a lot of investors lose out by making thoughtless, fear-driven decisions to buy and sell. The actual amount that they lose out varies, but I've seen a range of around 2-8% in a number of studies. This [1] says average investors lag the index by 5% a year, which I'm inclined to believe.
Part of the issue that Murtza is likely experiencing is that this psychological function of a financial adviser--getting people to keep their investments in place over the long term--does not feel good. In fact, it feels like lying and it is.
The question for most investors isn't whether they can get a better return by switching to a passively managed fund, but rather whether they have the discipline to manage their own investments when they get scared/exuberant. This is not to say that advisers aren't prone to the same behavioral defects, but it's probably better to have someone on the other end of the phone who will try to get you to explain why you're selling out or buying in.
The problem for a lot of employees--particularly in the private wealth space--is that they think they're getting involved in some mythical "Wall Street," which doesn't really exist. Good advisers are 90% Mom (calms you down when you're excited) 10% psychiatrist (gives you tools to help yourself). They are not investors. They are in the business of preventing harm.
Of course, scummy advisers exist and are the standard. I'm just suggesting they are not the only kind in existence.
Full disclosure: I work in finance in an advisory capacity.
[1] http://moneyover55.about.com/od/howtoinvest/a/averageinvesto...
It sounds like he didn't enjoy his job on wall street. I wouldn't enjoy a job as a facebook developer. We all have our opinions.
I agree with the sentiment, but that's like saying that anyone who works in TV is spending 40 years trying to get people to buy shit they probably don't need. Although I wouldn't desire to build a business which monetizes primarily on selling ads it does a disservice to folk at FB and google suggesting that this is what they do or what motivates their behavior.
Without getting into the issue of privatizing gains while socializing losses, or any of the other crooked shit that's just another day in that industry, the OP makes a perfectly reasonable case for feeling bad about working for his financial firm.
"It was a farce. We were actually not very good at producing returns that beat the market (the standard for measuring performance). What we were good at was applying lipstick, the bank’s marketing materials, to the pig, the bank’s investment returns. Clients paid us a lot of money in fees when there were better ways out there to investment one’s money that are cheaper and generate higher returns (1). None of it made much sense."
I hate when people beat up on something because it's popular at the moment. I honestly see both sides of this. I'm not a fan of certain banking and investment practices and some of that culture, not all of Wall Street. At the same time I feel for the author. The bit where he mentions being fired really distracted people from his main point too which I don't like seeing.
The "clients" know exactly where the money is going, they do know about the returns, there are many reasons that make a client choose a investment, sometimes is about the taxation, compensation, or something more obscure. Sometimes that very same client had to put money there because it owes an awful lot of money to that same bank.
No victims there.
The only reason someone would use such bank products is because they actually owe something to that bank. It's not like you, or me, are investing. Those investments are part of a larger deal, pretty much like "Hey, I give you 500k but you need to open X account with us with XYZ fees, ok?" or "Look, if you don't pay us the 10m you got from us, you need to put at least 2m in that specific investment"
This is not like you or me are investing our savings. This is some obscure, barely legal, deals.
I know we all hate banks lately and rightly so but I feel like a lot of us are blinded by our bias and can't accept a valid point when it comes from them.
That said, I could be wrong but I don't know enough to be sure. I saw a comment from someone in the banking industry that seemed perfectly valid. If its not I'd really like to know what is wrong with it.
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You can't have the cash and the moral righteousness. I know you don't it owe it to anybody, but if you want your post to have any weight, you should. (Alternatively, get off your moral high-horse).
I've known a bunch of people who did the Wall Street thing. They complained about it during and after they were employed. Some left willingly. Not one "returned" the money to society. The effect? More people think "oh, I'll just make some money for now" and spend their youth doing that.
Personally, I have no qualms about Wall Street. Is it moral? Who knows. I'm no one to judge. The people who protest and the people who run it both make good points. But the people who bitch about it after taking the money are just plain hypocrites.
How about the person working for an apparel firm which keeps people in the 21st century version of slavery? Or the people working for governments who either directly or by proxy commit terrible crimes around the world?
I'm not trying to excuse anything, rather I just think it's more complicated than it seems.
A couple of examples:
For the sub-prime mess, people will argue for hours whether it's the fault of the borrowers for taking on more than they could handle, or of the banks for pushing the loans or of the government for encouraging the sub-prime market. Fact is, it's probably a mix of all of these things and we should address all of them.
Secondly, a common argument against veganism is that no matter how much you try to avoid animal products, it's impossible to do so in today's society as animal products are in a lot of innocuous seeming things like film or tires. But this fact doesn't invalidate the vegan's goal of trying to reduce (what they see as) evil as much as possible.
In short, the attempt to find every bad thing or trying to pick out the most bad thing is an impediment to ever making anything better.
I am a low-level functionary on the death star :)
It's hard to argue anything these days because once you show that you understand the shades of gray people think you're wishy-washy or a hypocrite. It's so hard to have real meaningful discussions these days and I've found the best you can do is pick one point, base your argument on that alone, and let the complexity be damned.
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/039332...
But here's the thing - when you don't have money to begin with its hard to quit a job or refuse a job even if you know deep down its wrong. Most people don't have the luxury of being able to listen to their conscience without ending up in the poor house. It's only after you've made enough money to have attained stability (or the oh so rare real savings) that you can afford to do what's right and follow your heart.
All of us want to make the world better but most of us can't afford that luxury. Money in and of itself can't buy happiness but it can buy you time and tools to do the right thing. I'm glad the author got out of there and is doing what makes him happy but I wonder if he'd be doing those things if he hadn't worked for the bank.
But I thought these financial people are "some of the smartest people in America" (OP's quote and a sentiment I hear often)? Surely they could apply their immense talent to other fields. I've been reading all year that there aren't enough capable people to move technology forward and that companies will pay a high price for such a person.
The problem is Wall Street can afford to pay way above market salaries to pull the top grads from the best colleges away from fields they would have normally gone into.