“The new road will be more effective – you need to pay for that,” says the municipal worker handing out the notice.
“But it won’t” you protest. “The new lanes will attract more cars, the pot holes will re-appear, and the lines will fade. So it won’t be more effective, just more expensive. In truth, you are putting a levy on driving – you are tolling road users for something they already own!”
The municipal worker ponders this for a moment.
“You are right”, he admits. “You better hope that doesn’t happen with this road.”
And as he slams the door behind him, you can hear him shouting “Good luck with that!”
You phone up your friend Wayne next door, and together you appeal to the Constitutional Court, but without luck. Wayne says “I’m OUTA here’’ and heads off.
You return home – you have a meeting with your financial adviser.
He examines your investment strategy.
“I see you index,” he says.
“Yes I do. This way I own all the shares in the market, I earn the market return, and it gets me where I need to go, conveniently, and at low cost.”
“Okay…but what if I offer you funds that buy the cheap shares and sell the expensive shares, to give you a better return.”
All good and well – until you hear that you have to pay extra to use these fund. Why, you ask?
“These new funds will be more effective – you need to pay for that” says your financial adviser.“
“But they won’t”, you protest. “These funds will attract so much money that they become the market; they will buy and sell both the cheap and the expensive shares. All those investors will then end up earning the market return. So it won’t be more effective, just more expensive. In truth, you are putting a levy on saving – you are tolling investor on something they already own!”
The advisor ponders this for a moment.
“You are right”, he admits. “You better hope that doesn’t happen with your funds.”
And as you slam the door behind him, he can hear you shouting “Good luck with that!”
