Madoff Only The Tip Of The Iceberg

I sometimes find that real life is so fantastic it would never be believable as fiction. Take Bernie Madoff. Here is a guy who somehow got a reputation as a financial genius. He managed to get people to give him billions of dollars to invest without any oversight and as long as he returned profits they never questioned him.

We all know the rest of the story. One day people stopped investing and his Ponzi scheme came crashing down. Now it turns out he may never have invested a cent, he just sent out transaction statements showing the investors making a big profit and everyone slept well. The latest in this story came from an investigation hat says he may never have made any trades at all.

Red flags must have been going up all over the place but greed blinded the people who kept putting money into his hands. What they received was money from other investors in a giant pyramid scheme with Bernie skimming millions off the top.

Now comes word of a missing fund manager in Florida. Arthur Nadel left a cryptic note for his family and disappeared. Apparently his fund bilked $350 million out of its investors and he either went off to commit suicide or just went on the lamb. Either way it was another scheme where people were blinded by greed and never asked the right questions.

I guess it was only a matter of time before the super-rich were knocked back down to normal. I always figured it would be some sort of cosmic karma that did it but it apparently was their own negligence and greed. On second though maybe that was the karma at work?

For most of us, the idea of giving millions to someone we hardly know to "manage" for us seems pretty crazy. I would figure people with that much money spent at least some time investigating and vetting any fund or asset manager extensively. I guess it just shows how little those who become rich really "deserve" their wealth. The myth of the hard working billionaires is fast being put to rest.

I always like listening to super rich peolle who speak of their fortunes as though they did something either incrediblly clever or somehow just worked hard enough to get the fortune they hold. In reality, most rich people either inherited their wealth or gained it through a series of fortunate events much of which they had nothing to do with. For the doubters, read Malcom Gladwell's "Outliers". The "self made millionare" is usually only a partial truth.

If hard work was all it took to get rich, then welfare mothers holding down two jobs and raising a family alone would be in the Fortune 500. Hard work only results in sweat. Success comes from both hard work, luck and circumstances more than anything and much of that is beyond our control.

Meanwhile, there are a lot of foolish rich folks out there just waiting to give you their millions and not ask questions. If you have no scruples and a good wardrobe, go for it! Maybe a few more Bernie Madoff tales will finally wake people from their slumber and get them to consider exactally what they are doing with their money.