In 2013, a man named Doug Evans had a vision. He had watched the Keurig become a household staple and decided the future of humanity was cold-pressed juice. Not just any juice. Juice extracted with precision, force, and technological sophistication that would unlock nutrients ordinary juicing simply couldn't reach.
So he built a machine. It was gorgeous. Matte white, sleek, seven pounds, connected to your wifi, and paired with an app that scanned QR codes on proprietary pre-chopped produce packs, which you'd order directly from the company for $8 each. The machine would authenticate the packet before juicing. If the servers went down, it wouldn't work.
Investors loved it. Kleiner Perkins, Google Ventures, and some of the most celebrated venture capitalists in the world put in $120 million. Wired magazine called it a glimpse into the future of food.
Then in 2017, two Bloomberg reporters sat down to review the machine. One of them picked up the proprietary packet and squeezed it with their hands. The juice came out. Same yield. Same time. Identical result.
The $700 wifi-enabled, app-authenticated cold press machine was just squeezing a bag. Bloomberg published the video. Within months, Juiceroo was gone. $120 million, finished.
The financial services industry has been running the same play for a long time, wrapping simple things in expensive complexity and charging handsomely for the machine.
Hedge funds are active management with a better marketing budget. The pitch is sophisticated: uncorrelated returns, proprietary strategies, access to the best minds in finance. The result, in aggregate, is underperformance against a simple index after fees.
Most actively managed mutual funds are expensive index funds. Decades of data show the majority fail to outperform their benchmark over long periods after fees. You're paying for a team of analysts and a portfolio manager to approximate what you could hold for a fraction of the cost.
Private equity is increasingly marketed to everyday investors as something exotic and elite. In many cases, what you're actually buying is exposure to small, cheap companies. The same companies you could buy through a low-cost small-cap ETF, stuck inside a structure that locks up your money for years and charges you for the inconvenience.
The annuity pitch is that the insurance company can guarantee returns the market cannot. If an insurance company could genuinely guarantee returns beyond what the market delivers, every insurance company that tried would eventually go bankrupt honoring the promise. What they actually do is invest your money in the markets, skim a fee, and hand back a smaller version of what you could have had directly.
The best financial decisions almost never look like anything. They're boring, low cost, and patient. They don't require a fancy machine, a wifi connection, or a proprietary app. A diversified, low-cost, stock-heavy portfolio held for decades is one of the most powerful financial tools available to anyone. It just doesn't have a great pitch deck.
Before adding anything complicated to your financial plan, ask the Juiceroo question: am I paying for a machine that's just squeezing a bag?
If you want to learn more about how we help executives cut through financial complexity and build straightforward plans that actually work, schedule a complimentary Retirement Readiness Review.
-A note from Bjorn Amundson, CFP®
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing contained in the material constitutes a recommendation for purchase or sale of any security, investment advisory services or tax advice. The information and opinions expressed in the linked articles are from third parties, and while they are deemed reliable, we cannot guarantee their accuracy.