Bitcoin in Your 401(k): Where Are the Customers' Yachts?

What Wall Street lobbies for is guaranteed to not be good for you.

Back in the 1940s, a visitor to New York was taken down to the harbor and shown the impressive yachts belonging to the stockbrokers. Sleek, polished, crewed — the kind of floating palaces that make you think the owners know exactly how to win at life.

The visitor admired them for a moment and then asked the obvious question: "So… where are the customers' yachts?"

That question became the title of a 1940 book by Fred Schwed Jr. — Where Are the Customers' Yachts? — a slim, funny, and brutally honest take on Wall Street's real business model. Warren Buffett calls it the best book ever written about the Street and has been recommending it for decades — not because it's quaint, but because the joke is still true. Eighty-five years later, the names and products have changed, but the basic dynamic hasn't budged an inch.

If They're Offering It, It's for Them, Not You

Wall Street is not in the business of giving away good deals. If they're pitching you a product — a hot fund, a "can't-miss" IPO, a shiny new AI-driven wealth platform — you can safely assume the math tilts in their favor. Rich people don't get rich writing checks — they get rich cashing yours. Head for the exit door when you hear these things.

The more complicated the product, the faster you should run.

And if they want to "innovate" your retirement by adding Bitcoin to your 401(k)? You should be exactly as eager as you would be to contract a case of poison ivy.

And it's not just the products. If Wall Street is lobbying the government to do something, you can be sure it's good for them and bad for you. Wall Street doesn't like the government when it's interfering with them stealing from the public — only when they've ruined everything and need a bailout. You can take that advice to the bank.

You don't need to sit through all the breathless cable-TV debate to know how this ends — get it, and you'll get shafted. Skip the drama and move on to something better.

These promises that it's different this time are like Lucy holding the football for Charlie Brown. You know exactly how it ends, but somehow people keep running up to kick the football anyway.

The Bet That Sank the Hedge Funds

Buffett has been telling people for decades that their best shot at building wealth isn't chasing the latest Wall Street invention — it's buying a plain S&P 500 index fund and leaving it alone. Almost zero management fee. No slick sales pitch. And year after year, it outperforms the vast majority of actively managed funds.

He even put his money where his mouth was. In 2008, Buffett bet a million dollars that over the next ten years, a low-cost S&P index fund would beat a handpicked basket of hedge funds. Ten years later, the score wasn't even close — the index fund returned 8.5% annually while the hedge funds managed a measly 2.2%. The pros with all their models, meetings, and multimillion-dollar fees couldn't outpace the simple bet on the market itself.

So why doesn't Wall Street tell you to buy an index fund? Because the percentage they can charge to manage one is nearly zero. They don't make any money. And if there's one thing you can count on, it's that the Street won't go hungry so you can eat.

The customers' yachts? Still missing. The brokers' yachts? Still gleaming in the harbor. And that, eighty-five years later, is the whole point of the joke.