So there we sat, my wife and I, looking at the young man sitting across the table, smiling at us. “Well, you have made it” he said. “Now it is time to decide how best to invest it. Tell me a little about how you would like to spend your retirement.”
The word “spend” made me a little nervous as our nest-egg had been laid by a very small chicken. “We have thought about it” we said “and have decided that we would like to concentrate on having a place to live and eating, if you think we have enough to do both.”
“That would depend on your risk assessment” he replied. “Would you consider yourselves risk takers?’
“Maybe a little. We’re here aren’t we? Chuckle, chuckle. That’s when I realized he was no longer smiling. I had always thought Investment Advisers had a good sense of humor, given their fees and commissions. But in retrospect, I have never had anyone tell me an Investment Adviser joke.
After a pregnant pause he asked “Do you have any experience in the stock market?”
“No, not really” I replied. There was one time that I got a tip on an start-up that manufactured slide rules. It was an untapped market I was told. No one else was making them. For some reason, they never took off. I think it was the marketing philosophy. Standing outside of Walmart with a sign and a cane didn’t work very well.”
“I think something conservative would be best for you. Low risk, moderate gain. Properly managed I see no reason that we couldn’t grow your investment to a point that you could travel a little from time to time. Perhaps a two night stay in a Motel 4 in Moline with a comped dinner at Chipotles and a free tour of the public library. How does that sound?”
“Excuse me” I said. “Don’t you mean Motel 6?”
“Oh no, that would require an upgrade. I don’t think we can support that.”
“Do you get a commission on any trades you make?” I asked
“No, I don’t. If I did, I could make a lot of trades and cost you a lot of money. I work on a flat guaranteed fee.”
“What does it guarantee?”
“That regardless of market fluctuations, my kids will still go to college.”
“What happens if the market suddenly drops?”
“Well, then we would have to make some adjustments”
“What kinds of adjustments?”
“Well, for instance, do you really need two cars? But let’s not worry about all that. Why don’t I put together an investment portfolio and we can get back together and go over it?” Reaching into his pocket he took out two logo pens and a business card. “Here” he said. “These are for you. If you have any questions, just call me.
Standing, I reached in my pocket and said “and this is for you” handing him my card and a slide rule. If you need any more, let me know.
From the archives. First published March 2014