The Recession Is Over... If You're on Wall Street

07/22/2011 12:40 pm ET | Updated Sep 21, 2011

In my last column, "Playing Russian Roulette," I spoke about the sheer folly of encouraging those in or nearing retirement to catch-up by investing as much as 40% of their nest egg in the stock market.

I wrote the column in response to recent articles in the mainstream financial media promoting the concept, as if it makes perfect sense to make up for your gambling losses by doubling your bets.

To me, it's appalling that anyone would advise those who are already retired to gamble their life's savings on the volatile, risk-filled world of Wall Street.

But my message -- that Wall Street is unstable and potentially as explosive as nitroglycerin -- is really not age specific. The stock market can (and will) blow up in your face at any age.

For most Americans -- and Wall Street goes to great lengths to hide this truth -- the stock market is a promise unmet.

The success myth promulgated by the financial services industry is like a casino showcasing its big winners, without mentioning that the prize pool derives from the much larger multitude of losers who generate huge profits for the operators, but who themselves walk away worse off than if they had stayed at home.

Money isn't the only price that the Wall Street casino extracts from most investors

Peace of mind is surely as much a toll. When it comes to steep ups-and-downs and hairpin curves, the stock market is unrivaled by even the most infamous amusement park roller-coasters.

Yet the roller-coaster metaphor only goes so far. For while both Wall Street and theme park thrill rides will set your head spinning and sometimes rocket your stomach into your mouth, only one guarantees a safe, predictable, rapid landing back where you began. The other never does.

The Wall Street propaganda machine is so mighty and so effective, that most Americans continue to buy into the myth that the stock market -- over the long-term -- is the best place to grow personal wealth. That's the case, amazingly, even for the tens of millions of Americans whose own money-losing experiences repeatedly prove otherwise.

It's time to let the "Big Secret" out of the bag: You Are Not Alone. Your eyes, and your individual experiences, are not deceiving you. King Wall Street really is not wearing any clothes. Those who say it is are too afraid to admit that they too have been snookered by the promoters who always get paid, whether you win or lose.

There are loads of numbers and statistics to validate my point. (Although I'll bet that most people reading this column don't need me to reaffirm what their own stock market misadventures have already proven.)

Here's an example of the reality versus hype facts that Wall Street wants you to overlook:

The stock market has plunged more than 45% -- TWICE -- over the past decade. You may not vividly remember the sting of the last crash, but don't fool yourself into thinking it isn't going to happen again.

Even in bull markets, if you are like the average investor, you will wait too long to buy and then compound your misery by selling after the bubble has inevitably burst. What money you do manage to preserve could very well be subject to fees and taxes that will chew up a hefty chunk of what should have been yours. What's left, the scraps, will be your only financial legacy.

So why do most Americans continue to cling to the notion that Wall Street offers them the best hope of wealth creation?

The main reason is that no safe, non-volatile alternative has yet been able to penetrate the fortress that Wall Street and its promoters have successfully built around the collective consciousness of the American public.

Put another way: There may be a better mousetrap, but it won't do you much good if you are prevented from knowing it exists.

After investigating more than 450 different financial products and strategies, I know a better way does exist. It works for old and young alike. It works for those who start out rich and those who start out wanting to be rich. And, best of all, it has worked flawlessly for more than 160 years.

My research led me to conclude that Wall Street has brainwashed the American public into believing we must accept risk and volatility in order to grow a sizeable nest-egg.

Of course, I've taken a lot of flak for taking on the financial fat cats. But the $100,000 cash reward I've offered to the first person who can show they have a better strategy remains unclaimed.

As Benjamin Franklin noted,

"You will observe with concern how long a useful truth may be known and exist, before it is generally received and practiced on."

Make no mistake: If you don't know what your retirement account will be worth in 10 or 30 years, you don't have a financial plan. And if you don't know how much income you can count on from your investments in retirement, you don't have a plan. You are gambling.

So whether you are in or nearing retirement, or just starting out on your career path, I urge you to do your research and leave the roller-coaster rides to the amusement parks. Let Wall Street grow even richer using someone else's hard-earned savings.

New York Times bestselling author Pamela Yellen is the founder of, a website dedicated to helping people achieve lifetime financial security and self-reliance. As president of, she's helped hundreds of thousands grow their wealth safely and predictably.