(Just between you and me)
Ten years ago, Elon Musk posted an under-the-radar blog post outlining his intentions for a young company named Tesla Motors:
I think it was a pretty brilliant idea and I’m going to put my own spin on it. Thanks, Elon.
So, what am I doing here? What’s my “secret master plan”? Well, it’s pretty simple: I want to move people. Two sets of people need moving, to be precise.
The first group, longshore workers, really need help investing. A simple proof is in their 401(k) investments (but it’s not their fault!). They’ve been set up to fail with a bogus retirement savings plan at work. The investment allocations longshore workers have settled on are both too expensive and are mostly actively managed funds, a double whammy I have outlined here.
Improving the financial outlook for longshore workers as a whole is a big goal of mine for three reasons:
- As a casual in Seattle I have spent ten years on the waterfront with longshore workers and I’ve gained many close friends, and I have a major affinity for the union working class.
- I love sticking it to The Man. Honestly — this isn’t about being a “disruptor” for the sake of disrupting; the workforce has a major grievance here (whether or not they know it today).
- The stars have aligned and I can seriously help, well, a shitload of people. If given the same situation, wouldn’t you do the same?
Helping longshore workers improve their investing and financial planning decisions ultimately helps their cause as union workers because they can be much less dependent on immediate income from employers when it comes time to collectively bargain on contracts. Imagine a coast-wide union where each member has an adequate emergency savings account, a healthy retirement savings rate, and a properly invested portfolio, within the 401(k) and outside it. That is a beautiful thought if you’re pro-union and root for blue collar workers. That is truly sticking it to the man. A financially strong union will elevate its bargaining power, and its cause, without a doubt.
The second group of people who need to be moved are the employers. That’s a tricky target, but when it comes to 401(k) investing they need to be moved to change the options available to union members. The costs alone are unacceptable for a plan of its size, which I’ve previously outlined. You can’t help but feel in your bones that it’s by design once you think about it.
This is a long-term project I am uniquely qualified to start. The longshore 401(k) plan alone is over 1.5 billion dollars — $1,500,000,000. A 1% improvement in investment returns within this plan would represent a $15 million windfall to union members in just the first year alone. It’s possible we can get there by simply overhauling investment options alone, and this doesn’t even include better returns due to improved investing behavior!
The potential effect of better investment options and better investing decisions is truly staggering. You can do the math on what that would mean for the average member, or you can see the individual effects here. Being part of that potential future is what I’m aiming for, but I can’t get the membership there by firing blog posts off in the the internet abyss. It starts with, for the lack of a better term, investing solidarity among members/clients.
I’ll just lay it out like Elon did:
- Use unique position as fiduciary investment advisor / longshoreman to help longshore families invest and plan for their goals, despite current 401(k) pitfalls
- Work with those clients to lobby leadership and employers to bring awareness of shoddy investing options and framework
- While doing above, eventually earn direct seat at the table so members have an expert, fiduciary advocate in this battle
- Don’t tell anyone.