It was 2 years ago. The lead up to the election was in full swing. Things were starting to heat up. I was an avid reader of Daily Kos and disgusted critic of the Bush debacle. One day I started reading a blogger on dK called Bonddad. He had some pretty gloom and doom things to say. Mortgages resetting. Foreclosures coming. Banks going under.
Who was this guy? I never read any thing like what he was saying anywhere else. I followed links, looked things over and tried to understand. Economics isn't my forte by any means but I'm interested.
After reading several of his diaries and checking out his links, I decided to leave Wells Fargo and move to my local credit union. That took some doing as we had 4 accounts. At a credit union, we had to have 7 accounts because each account required a "share account". But despite the hassle, I felt good about joining a "coop" of my neighbors that lent locally in my hometown.
Then late one night, I read one of Bonddad's insightful and frightening analyses of what was coming down the pike. It sent a bolt of energy through me. More after the flip.
You see my family is a regular working family. We don't have a lot but what we do have, we feel very grateful for. We own a small house, (well actually GMAC owns most of it). And we have a tiny bit in retirement. Not much more than a year's salary a piece, so nothing to really retire on, but nevertheless it means something to us. And I had seen that IRA drop like a rock back in 1998 - losing 50% of it's value in a breathtaking flash. At the time, I wasn't paying a lot of attention as a mother of a young toddler and was shocked to casually open a statement and see the carnage. It hadn't come back significantly in the ensuing years. Perhaps I can't pick mutual funds I don't know.
Anyway, this time I was paying a lot more attention. Perhaps I'm what investors call a "risk averse" investor. I'm willing to play but I'm not too willing to lose. I'm one of those kinds of gamblers who decides before walking in, what I am willing to lose and doesn't budge beyond that. Besides I can't afford it anyway.
So after that Dkos diary, I went immediately down to my credit union to open two IRAs. They issue IRAs as Certificates of Deposit with varying maturities and rates. Nothing special, 2% and the like. I didn't care. Preserving principal was what I was interested in. And I wanted to make sure they weren't using the money to play in the stock market OR in the mortgage market. I asked a LOT of funny questions. They had to call their Vice President. I was assured that my IRAs were fully insured by the FDIC and that they weren't invested in either the mortgage market or the stock market but in other credit unions.
This was in early in 2008. The election was a ways off but the light was glowing at the end of that long tunnel. I contacted all my family members and pleaded with them to take their money out. I forwarded copies of Bonddad's diary entries. They laughed at me. Sadly no one listened.
My little IRAs at my local credit union are doing fine. No losses. No cold sweats when a statement comes.
No huge returns either, its true. And thats just fine with me. I might be willing to get back in. And I might not, at least until the system seems a little more stable. I am realizing that the system is sort of rigged to favor the "investor class" who can hire professional advisors. Those in the know. And I'm definitely NOT one of them.
I realize that many have not been as lucky as I. I am truly truly sorry. But I also feel I need to give kudos and thanks where they are due. I couldn't have done it without dKos and most especially Bonddad. So from the bottom of my heart,
THANK YOU Bonddad. THANK YOU and GOD BLESS YOU. All hail the genius and courage of Bonddad for his financial reporting IN ADVANCE of the Wall Street debacle. And All hail dKos for being an accessible venue where I could come to learn and act.
It saved my family's tiny little IRA. And perhaps others as well.
GOSH! The Rec list! My first time. Wow! Thanks so much.