Book Reviews

Uninvested: How Wall Street Hijacks Your Money And How To Fight Back [Book Review]

Robert “Bobby” Monks is a serial entrepreneur who has founded and led nineteen businesses in the financial services, real estate, media, and technology sectors. He was chairman of Spinnaker Trust, managing over $1 billion in assets; chairman of Institutional Shareholder Services and Proxy Monitor, the two largest corporate governance and proxy voting services; and founder and director of Atlantic Bank. Monks is on the board of ProPublica. He lives in New York and Maine.

He is blowing the whistle on Wall Street, giving middle class Americans the low down on how they’re being fleeced of their retirement money—and what they can do about it. Bobby can discuss the Department of Labor’s pending fiduciary rules, what he feels needs to be fixed on Wall Street, why it is vital for individual investors everywhere to start asking their money managers the right questions, his perspective on proxy voting, among other topics.

 

Uninvested: How Wall Street Hijacks Your Money and How to Fight Back – Book Review

Every month our financial statements arrive, and every month we glance at them, trying to understand, hoping that we’ll come out ahead. But most of us have no idea what’s really going on or the costs involved. According to Bobby Monks—who has been a banker and borrower, investor and entrepreneur—financial firms and money managers have complicated the investing process to keep us in the dark, profiting from our ignorance.

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Having dealt with the financial sector throughout his career, Monks has seen it all. In Uninvested: How Wall Street Hijacks Your Money and How to Fight Back, he reveals how, when, and why the relationship between us and our money managers became corrupted—and what we can do to fix it. Monks shows how the system works not only against us as individuals but also against society at large. Without our knowledge or approval, our money is diverted into the pockets of CEOs and misappropriated, promoting business practices that contribute to economic inequality, political dysfunction, and environmental woe.

Monks’ experiences give him a unique perspective on how we got to this point. Drawing on original research and interviews with key figures such as Vanguard founder Jack Bogle, legendary investor Carl Icahn, and former congressman Barney Frank of the Dodd-Frank Act, Monks teaches us how to take back ownership and control of our money. As he writes:

Even in the decades preceding the most recent downturn, very few investors enjoyed financial success equal to that of their money managers. Given this, I have long wondered why investors don’t pull their money out of the system en masse.

I suspect that it is because most feel powerless. Unaware of the implications of their investments and unable to penetrate the excruciating complexity of the system that facilitates them, many seem to seek refuge in their money managers’ aura of sophistication, pretense of competence, and projection of certainty. It seems to me that most investors are simply sleepwalking through the investing process. They have become uninvested.

When we outsource our investing, we sacrifice control—but not responsibility. My goal in writing this book is to convince you that the best (and only) way to fix this broken system is to awaken a critical mass of engaged investors and recruit them to participate more fully in the investing process.

If you have money in a 401(k), IRA, mutual fund or pension fund, the answer is: yes.  In fact, investors like you are forfeiting hundreds of thousands of dollars, even millions, over a lifetime. Why? All because financial firms have rigged the game, gouging middle class Americans with outsize fees they collect and keep – whether or not they deliver returns.

He reveals exactly what happens to the money we invest – and why so much of it ends up in the pockets of CEOs and money managers. More importantly, Monks reveals how investors can protect themselves and help fix the system. With a singular inside perspective developed during a career as banker and borrower, investor and entrepreneur, Monks charts the evolution of American investing, the rise of the monolithic financial intermediary complex, and exposes the incredibly high costs – financial, political, environmental, and social – of the prevailing “outsourced” model of investing today.

In addition to weaving together the broad economic, political, and historical factors that drove investors into Wall Street’s clutches, Monks gets into the nitty-gritty, discussing:

  • The dark side of low-cost index funds. Though index funds have helped lower fees superficially, they degrade the value of corporations, enabling irresponsible corporate behavior and widening economic inequality;
  • Why picking stocks is great – even for novices. Cutting out the middle men, buying stock in companies in which you believe, and participating in corporate governance through proxy voting is the best path to financial and ethical investing success;
  • Why investors are the only solution. Forget about politicians, regulators, and accounting firms. Investors are the only force large, rich, and powerful enough to take on the financial industry.

Uninvested - How Wall Street Hijacks Your Money and How to Fight Back - Bobby Monks

Uninvested: How Wall Street Hijacks Your Money and How to Fight Back by Bobby Monks