Ron Paul Economics: Invest in Retirement with No Fees and Avoid Wall StreetSubmitted by jrehmann on Wed, 06/20/2012 - 10:49
Dear Fellow Ron Paul Backers:
As a former Morgan Stanley i-banker (1585 Broadway) and an M&A banker through 2010, I have been close to the crisis and witnessed many of the excesses of the street. I write this to propose an alternative to the current investment ecosystem.
Presently, there are about $50 trillion in assets under management globally. The average management fee is 1% annually, which equates to $500 billion in fees to asset managers. What do these investment managers do to warrant such an enormous fee? While I believe there is value in a financial planner, I see the compensation they receive as disproportionate.
What if there were an asset class in which Americans could invest that delivered 8% annual returns with a very low risk profile, could be verified to have a positive environmental impact and social impact, and most importantly, had zero fees? What would the interest be?
I pose this question because I'm graduating from INSEAD, a top global MBA program, and I am very keen to create a new paradigm in investment management that:
1) Delivers 8% returns, no fees and very low risk (inflation protected)
2) Avoids the Wall Street structure (highly compensated individuals deliver sub-average returns for consumers)
3) Provides benefits to the environment and communities
As Americans look to the crony capitalism on the street, the 0.5% returns on their savings accounts, and the coming inflation and mismanagement of the economy, I believe there is latent demand for a free market solution that provides financial returns without environmental and social degradation.
Investment in sustainable forestry is an asset class that is uncorrelated to the financial markets, has experienced multi-decade slow growth, benefits the environment and rural communities alike. I have a wealth of research on why this investment makes such sound, long-term sense. And if you want some confirmation also from other smart money, Harvard's endowment has invested in hundreds of thousands of acres of managed forests.
I would like to pursue this opportunity, but it will require investment in order to launch the venture with the appropriate scale. Please share your thoughts on the kind of support Ron Paulers would have for this type of alternative asset.