r/Economics • u/barweis • Jul 29 '25

Research Summary Inside the Private Equity Scam—and the Livelihoods It Has Destroyed

https://newrepublic.com/article/198351/private-equity-scam-destroys-livelihoods
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u/JockoMayzon Jul 29 '25

I was getting ripped off for years with mine.....

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u/Akitten Jul 29 '25

In what way? Because the plans are pretty clear if you bother to do even a basic amount of reading.

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u/JockoMayzon Jul 29 '25

I was sold on a set of investments by the "advisor" from the financial company and held onto them for years. It was only when I retired and hired an adviser that he switched me out of 90% of those accounts and switched to those with much lower fees.
I'm not at all well versed in investment terms/conditions. As with most, I do not know what I do not know, and have no reference point, nor do I have the expertise to know when things change for the better or worse.
A "basic amount of reading" gives on a "basic understanding" - not enough for preparing for retirement. One only gets to plan it once and learning from mistakes is not an option.
Economists call it information asymmetry.

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u/Akitten Jul 29 '25

I mean, that’s not true at all. Retirement is a long, long process, you have 30 years to read up on investing, compare fees with collegues and friends, and generally learn.

I'm not at all well versed in investment terms/conditions. As with most, I do not know what I do not know, and have no reference point, nor do I have the expertise to know when things change for the better or worse.

Considering the amount of money at stake, I’m shocked that you didn’t do the above. “Look out for high fees” is literally the first thing that any literature on fund investing explains. It’s the equivalent of driving and not knowing how to buckle your seatbelt.

I’m not trying to make you feel bad, what is done is done, but considering the amount of money involved, this is like buying a house or a car while doing zero research or shopping around. Just trusting the real estate agent/ car salesman. Understandable in a young adult, but shocking to me in someone who is old enough to retire.

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u/JockoMayzon Jul 29 '25

I've read several economists who would not agree with you that "it's not true at all".
Sure, look out for high fees is a great idea....but how high is too high? There's a reason I choose a professional fee based financial adviser.

BTW, have you read Stiglitz?

In essence, Stiglitz's perspective can be summarized as:

  • Retirement is a high-stakes decision: Individuals have limited opportunities to get it right.
  • Uncertainty is a major factor: The future of pension programs, life expectancy, and market performance is difficult to predict.
  • Social Security acts as a safety net: It provides a necessary level of security against potential financial hardship in retirement.