A Fool and Her Money: One Woman's Story

Three things in life are inevitable: death, taxes and the investment advisers who swoop down as soon as you’ve come into some cash. I know — I learned the hard way.

By Germaine W. Shames

There was no simple answer. Too much trust? Too little savvy? I thought of my mother’s worn sofa, my grandmother’s shabby sweaters, the passed up purchases of good china or jewelry that had allowed them to leave me a generous inheritance. And now it was gone, or nearly so.

Starting Over

If it took me the rest of my life, I vowed I would build it back. For all my insouciance, money had proved a staunch ally, affording me freedom, independence and broad horizons. I would open them wider still.

I set out to learn everything I could about investing. For months I haunted financial Web sites. The challenge was not finding tools but honing in on those that best matched my philosophy and investment style, which is rooted in my personal and social values. Books offered a depth not easily found online. From basics such as Charles Schwab’s Guide to Financial Independence, I gravitated toward the classics of value investing, beginning with Benjamin Graham’s The Intelligent Investor. Research confirmed what I already suspected: By soliciting trades that were unsuitable, my broker violated rules laid down by the National Association of Securities Dealers. I withdrew the remains of my assets from the brokerage firm and vowed never again to let anyone come between me and my money.

Seeking Advice

It was hard to fathom how a certified professional could so cavalierly decimate a portfolio. Needing advice, I called Christopher Tovar, an attorney with Shepherd, Smith & Edwards, a firm devoted to securities law with offices throughout the U.S. What began as a legal consultation soon branched into a swapping of stories.

Chris had come into an inheritance of his own after graduating law school. No sooner did the lid close on his relative’s coffin than stockbrokers began to call. The experience prompted his career shift: He became a broker for a major house. "I spent the next couple of years getting a glimpse of how the industry works," he told me. "The emphasis is on ‘moving the money,’ getting people to buy and sell securities. A lot. They may as well have been telemarketers," Chris summed up, "just better dressed."

Many of the people who contact Chris’s law firm have lost an inheritance through some form of broker misconduct. In his experience, at least half are women over 40, and many have recovered their losses through arbitration. I decided not to sue my broker, which would have consumed too much of my time and energy. Instead I chose to focus on recouping my finances.

A Lesson Learned

But here’s the real lesson: If you’ve come into an inheritance or expect to, hold on to it. Put the money in a certificate of deposit or high-interest savings account until the worst of your grieving has passed. For help, visit a certified financial planner. But pay a fee, not a commission.

My story doesn’t end here. In a sense it is only beginning. At age 50 I am rebuilding the gift passed on to me by two generations of women who knew the value of tenacity. Checking the Dow or sifting through the stock alerts and annual reports in my in-box has begun to feel as natural to me as changing my shoes. Back when even balancing my checkbook was too great a nod to materialism, I could not have imagined spending an hour each Monday glued to a screen filled with streaming stock and bond quotes.

It took losing an inheritance to make money real to me, and investing to uncover my innate aptitude for growing it. At the rate my account balances are rising, I will have the amount of my inheritance back within five or six years-and with it the satisfaction of having proved myself worthy of the gift.

Whenever the markets tumble or a trade goes sour, I picture my mother and grandmother cheering me on. They had dreams for me. With my recent novel getting good reviews, I may already be living the brightest of them. Once death has shown us the true measure of our lives, what is money truly about, if not dreams?

Originally published in More magazine, December 2005 / January 2006.

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