Wall Street Robbery!

We need to stop giving our money to Wall Street. They don't need it. They already bought their fancy cars and fancy houses. We'll need it to eat when (if!?) we retire someday. They're just the parasitic middlemen making their riches at the expense of us, the investor.

And here's the kicker - we don't need them. Successfull investing isn't as complicated as the industry would like us to believe. If we can nail down a few basic principals and steer clear of the daily market "noise", we'll by far surpass the vast majority of all other investors.

The financial services industry, the croupiers who skim money off every transaction that takes place, represent 27% of the earnings of the 500 giant corporations that compose the Standard & Poor’s 500 Stock Index link . They took $600 billion dollars in 2008 (that's almost a quarter of the government's entire annual operating budget.). We paid them that. We let them take that.

They make money whether we do or not. In many ways, they’re like the House in Vegas – they always win because the game is fixed to their advantage. They’re able to do so because they exploit the opaque nature of investing and play on our emotions, fears, and ignorance. Well, it's time to call their bluff.

Wall Street traders, financial news networks, money magazines all make money by convincing us to churn and burn. Buy and sell. They need to convince us that it’s possible to predict a hot stock, buy, predict when it will get cold, and sell. If they can’t convince us of this, there are no trades to make commissions on, no hot financial news to report, and no new investing strategies or stock picks to feature. They’ll go poor because we’ll stop paying. And that money, our money, will stay in our pockets and grow for us.

It’s important to always remember this bias. Everything around the financial services industry has this bias to convince us to buy and sell. Their existence depends on it. Always view their advice through their self-serving lens. If we stop buying and sell, flipping and flopping, they’ll go out of business. They’ll do anything to prevent that including lie, steal and cheat.

Here’s the truth most everyone doesn’t want us to hear. We can successfully invest for long-term goals by simply buying a low-cost index mutual fund that tracks the S&P 500 and a low-cost index bond fund. That’s it. It really is that simple and boring. But if we do that, a huge majority of the middlemen in financial services are no longer need. They want to be needed and will do anything to convince us that they are. They’re not.

The really smart people who are not swayed by some self-serving interest (people like John Bogle, Warren Buffet, David Swenson, Burton Malkiel) all come to this same conclusion. And the beauty of investing is the proof in the history of the numbers. All the evidence (and here is another good summary of the proof) points to this same conclusion. The vast majority of investors are best suited to this simple stock/bond low-cost index fund strategy.