The Investor’s Bill of Rights: Owning Your American Dream
In his new book, “Investor Coach” Brendan Magee wants to help investors attain the freedom to realize their version of the American Dream.
The problem, as Brendan Magee puts it, is this: “We are investing ourselves into the poorhouse. Without any understanding of how markets work, we hand our life savings over to people we will never meet, are completely in the dark about what is being done with our money, and have no idea whether or not what they are doing with it actually works. Poof! Our American Dream goes up in smoke. Sadly, we never see this tragedy unfolding until it is too late.”
To back up his claim, he cites a national study that shows from 1985 through 2018, the average stock fund investor’s annualized return was just 4.09 percent, while the average bond fund investor’s annualized return was a paltry 0.25 percent. In other words, investors either barely outperformed or underperformed the rising cost of living, which went up annually by 2.49 percent.
With his second book, The Investor’s Bill of Rights: Owning Your American Dream, Magee hopes to prevent people from going down such a destructive path. He wants his clients, their families, and the world to experience the freedom, empowerment, confidence, and fulfillment that results from discovering how the markets actually work.
The book can be summed up with this thoughtful excerpt from the book’s introduction: “In order to put the power and control back in your hands, you have to know what your rights are as an investor.”
For Magee, freedom, power, and fulfillment were not always the words he associated with investing. With a great deal of enthusiasm, he started his career as a traditional financial planner. He felt that helping people know where to put their money and learn how to become affluent was a great way to make a living. However, after several years his enthusiasm turned into confusion, frustration, and stress. Something was missing, but he couldn’t put his finger on it.
“The performance of the company’s fund managers didn’t persist,” he says. “I couldn’t understand how one year this fund would be up, then I would recommend those funds and products to my clients, and then the performance we were expecting didn’t happen. Year in, year out, how could people who were in the media, graduated from the best schools with master’s degrees in economics, in charge of millions of dollars, be so inconsistent and substandard in their performance? These were among many questions I kept asking, but could never get answers.
“So many thoughts crept into my head and scared me to death,” he continues. “For example, what if we really didn’t have any magic formula to offer people? What if, God forbid, someone I convinced to entrust me with their life savings lost 50 percent of their money? Naturally, they’re going to want answers to what happened, and how do I look them in the eye without any real answers as to why things happened the way they did? Lastly, how could I convince people to invest in things I have no confidence in?”
At this point, he had two choices: look for a new profession; or find a better way to help people make better choices with their money. Through what he attributes to divine intervention, he experienced a life-altering event. Down to his last few dollars, he traveled to Cincinnati, Ohio, and listened to an academic presentation about investing. Suddenly, everything changed.
Research from Nobel Prize-winning economists Eugene Fama and Harry Markowitz took all the mystery out of investing. They helped Magee to see that, “All the knowable and predictable information has already been factored into the market and that it is only new and unknowable news and events that will move the market.”
This understanding led to his personal breakthrough.
“I could see that as a planner, unbeknownst to me at the time, I was trained to be a destructive force in the lives of people,” he says. “We were convincing people to engage in behaviors—stock picking, market timing, and track record investing—that were in complete conflict with the American Dream. Worst of all, both the client and I were completely in the dark about it the whole time. It was also one of the most liberating days of my life because I became completely empowered and free. Never again could I be talked into doing anything with my clients’ money, or my own, that was not in our best interests.”
He describes this breakthrough in detail in his new book. He joyfully shares the same education with people on a daily basis through his Drexel Hill-based coaching practice. He does this because, sadly, the problems he overcame more than 25 years ago have only gotten worse.
“Every day people get hit with solicitations about this or that investment,” he says. “At work you get hit with product pitches for your 401(k) plan. On the internet, in magazines, on television, etc., you get hit with suggestions on what you should do with your money, but there is never a conversation about how markets actually work. As a result, people are talked into doing tragic and absurd things with their life savings.
“People are trying to figure out the future,” he continues. “Unfortunately, there is no shortage of investment professionals who are happy to tell you which products are going to be the best over the course of the next five, 10, or 20 years. We already know that there isn’t anyone out there who can tell with accuracy what is going to happen in the next five, 10, 20 years—or even tomorrow for that matter.”
He believes too many people fail to see that they are no longer engaging in investing. Rather, they are speculating and gambling with their money, much like going to a casino or racetrack, where the expected rate of return is zero. Only when they discover how markets actually work do people have a fighting chance to stop gambling and speculating with their money.
With The Investor’s Bill of Rights, his goal is to tip the scales in favor of the investor.
“If I know what my rights are as an investor, and what I should be expecting, it gives me a solid place to stand,” he says. “If the investor knows what to expect, and what they should be seeing and hearing from an investment company, they are not going to be wasting their time, energy, effort, and money with people who are completely in conflict with their American Dream.”
Defining the Dream
Magee is proud to use his years of experience and coaching to help clients. He cites a couple named Joe and Eleanor, who came to him in 2001, seeking advice approximately six years before their planned retirement.
Joe, a government contractor, and Eleanor, a teacher, sought to fulfill their dream of retiring to Hawaii. With their goal in sight, they wanted to meet with their financial advisor and make sure they were in conservative investments. At that meeting, their advisor made some changes and assured them that they “absolutely” were in more conservative investments. Unfortunately, that didn’t turn out to be the case. Within two months of the meeting, their account had dropped by $130,000 and Hawaii was no longer a sure thing.
Then Magee took the reins. Although still shaken by the loss in their retirement accounts, Joe and Eleanor discovered how markets worked, and clearly saw where they had gone wrong in their previous decisions. From that point forward, they calmly knew where their money should be invested. In 2007, just as they originally planned, they were off to start their new life in Hawaii.
Magee says that everyone tends to have a unique definition for their American Dream. Some are extravagant while others are simpler, but no less meaningful.
“For me, helping people achieve their dream is an act of love and generosity,” he says. “It’s not about the money. A life without a purpose is not very fulfilling.”
His greatest hope for people who read his book is that they become empowered to realize their own version of the American Dream.
To purchase a copy of Brendan Magee’s new book, The Investor’s Bill of Rights: Owning Your American Dream, click here. For information on his individual and group coaching sessions, email him at brendan@coachgee.com.
Published (and copyrighted) in Suburban Life magazine, January 2020.
