Evidently, my blogging audience is rather small, because if anyone was reading my blog, then they would know not to invest in anything on my Do Not Buy List. Unfortunately, there will always be crooks out there who con people out of their money. It has been a year since I introduced my Do Not Buy List to the world. Based on what has happened in the last year, it is painfully evident to me that my message is not getting out to the masses. Therefore, I would like to call on all the other Financial Advisor Bloggers out there to reiterate, retweet, repeat and respect my Do Not Buy List.
DO NOT BUY LIST
Private Placements
Structured Investments
Non-Publicly Traded REIT's
Non-Publicly Traded Limited Partnerships
Promissory Notes
Regulation D Offerings
Exchange Traded Notes (ETN's)
Precious Metals
Floating Rate Bank Loan Mutual Funds
A Shares Mutual Funds (unless commission waived)
B Shares Mutual Funds
C Shares Mutual Funds
Why do I have these things on the Do Not Buy List? You will have to go back to my December 2, 2009 blog post to find out. All you have to do is put in 'Do Not Buy List' in the Blogger Search box and you will find it.
Also, what you may find very interesting is how many violations of my Do Not Buy List occurred in the last year. Do a Blogger Search on my Blog for 'Remember When I Said' and you will see all the times during the last year that I pointed out people who fell for things on my Do Not Buy List. These articles are proof positive that items on my Do Not Buy List are indeed things that you do not want to invest in, ever.
Stay safe out there. Be smart about what you are doing with your money.
Thursday, December 9, 2010
Monday, December 6, 2010
Remember When I Said...
Remember when I said do not invest in Private Placements? Regular blog readers of mine will be educated by my Do Not Buy List. Private Placements are illiquid, high risk investments anyway, but the main problem with them is that most of the time, the people selling them are ripping people off.
Now I am not saying that the people behind this Private Placement are necessarily ripping people off, but I would rather let you decide. Read the following article for details:
http://www.investmentnews.com/article/20101203/FREE/101209962/-1/INDaily01&dailycount=1&issuedate=20101203
Apparently, this group was able to raise over $10,000,000 by cold calling people about this offer. What I want to know is who are these poor people who fall for this line of bull? Come on people! Here are the multiple red flags involved in this situation:
Now I am not saying that the people behind this Private Placement are necessarily ripping people off, but I would rather let you decide. Read the following article for details:
http://www.investmentnews.com/article/20101203/FREE/101209962/-1/INDaily01&dailycount=1&issuedate=20101203
Apparently, this group was able to raise over $10,000,000 by cold calling people about this offer. What I want to know is who are these poor people who fall for this line of bull? Come on people! Here are the multiple red flags involved in this situation:
- This is a solicited investment. This means someone who has a financial interest in getting you to buy it is calling you cold. They do not know you and they do not have your best interests at heart.
- This is a Private Placement. Private Placements are highly illiquid and extremely risky. Did I say highly illiquid? This means that you put your money in for in most cases as long as a decade with no chance of getting your principal back before then. Who can stick money away for ten years today? Never mind the fact that you are never getting it back.
- These type of investments appeal to your greed. The sales pitch is to make outlandish promises about returns and appeal to your sense of greed.
- You probably agreed to invest in the Private Placement without ever even reading the prospectus. (In this case, the promoter alleging left out some very pertinent details in the prospectus, so reading the prospectus would not have saved you.)
- I have never heard of even one Private Placement that was profitable. Not even one!
Wednesday, November 24, 2010
Budget Deficit Spin Doctors
I just about fell out of my chair yesterday when I heard a Democratic pundit on TV say that "you cannot fix the deficit problem by cutting spending alone." Come again? As a Certified Financial Planner with a ton of number crunching experience, I find that statement to be totally false.
If I am spending $50,000 a year, but my cash flow from income is only $45,000 a year, then I can reduce my spending by $5,000 a year and solve my deficit problem. I didn't have to raise my income in order to do this which is the equivalent of the Democrats wanting to raise taxes.
This is as simple of a mathematical computation as it takes to solve a spending/deficit problem. The Democratic pundits on TV just do what they always do and that is mislead people into believing their spin on things.
Truth be told, you can reduce the deficit of this country by only reducing spending and not having to raise any taxes. Of course if you truly were to reduce spending in government, then this means that you would have to run it like a business and lay people off from their jobs. Or, better yet, take advice from a Certified Financial Planner and cut spending where you can. The problem is that the Democrats and some Republicans want to protect their turf. These people have never had to be on a budget. Why should they start now? Their thinking is to just stick it to the American people like they have always done.
Unfortunately for Democrats and Republicans alike, the American people are paying attention. In the past, nobody paid much attention to Congress, but now they have taken notice. If they simply raise taxes and do not cut spending, then the American people will do the cutting in terms of Congressmen in the next election.
If I am spending $50,000 a year, but my cash flow from income is only $45,000 a year, then I can reduce my spending by $5,000 a year and solve my deficit problem. I didn't have to raise my income in order to do this which is the equivalent of the Democrats wanting to raise taxes.
This is as simple of a mathematical computation as it takes to solve a spending/deficit problem. The Democratic pundits on TV just do what they always do and that is mislead people into believing their spin on things.
Truth be told, you can reduce the deficit of this country by only reducing spending and not having to raise any taxes. Of course if you truly were to reduce spending in government, then this means that you would have to run it like a business and lay people off from their jobs. Or, better yet, take advice from a Certified Financial Planner and cut spending where you can. The problem is that the Democrats and some Republicans want to protect their turf. These people have never had to be on a budget. Why should they start now? Their thinking is to just stick it to the American people like they have always done.
Unfortunately for Democrats and Republicans alike, the American people are paying attention. In the past, nobody paid much attention to Congress, but now they have taken notice. If they simply raise taxes and do not cut spending, then the American people will do the cutting in terms of Congressmen in the next election.
Tuesday, November 23, 2010
Are You Kidding Me?
Are you kidding me? Where in the heck do these alleged 'advisors' find these poor people who fall for this line of bull? Once again, yours truly has been proven correct. Right in my local area, a lady allegedly sold Promissory Notes guaranteeing returns of between 15 and 20% for the last seven years. Are you stinking kidding me? What kind of person (in their wrong mind obviously) would give anyone a penny to invest in something like this? I will let you answer that question.
Remember when I said that Promissory Notes were nothing but Ponzi Schemes? Check the Archives of my Blog for my Do Not Buy List posting.
The Ponzi scheme that I am describing above was alleged to be as high as $100,000,000. Okay, let us ponder this for a moment. One hundred million dollars divided by an average investment of say $100,000. This means that there could have been as many as 1,000 people who invested in this alleged Ponzi scheme. A thousand people! Are you stinking kidding me?
Forgive me, but are there that many greedy people out there? I know. I know. Some of the people who fell for this were simply stupid, but the truth is that most of them were greedy and stupid. Yet, they will be the first in line yelling for their money back. Somehow, I do not feel much sympathy for them. It is not like they invested in the stock of a major corporation or a mutual fund. They should have known that this was too good to be true. Come on, man!
Do not try and tell me that these people were duped by this Ponzi scheme. Totally untrue! They were greedy and believed what they wanted to believe. You will never convince me otherwise.
Another clue for the clueless is when your 'advisor' suddenly owns two houses, expensive jewelry, a new art collection, exclusive pianos, high dollar automobiles and is taking extravagant vacations to exotic places. When you see changes such as these, it may mean that you and your money will soon be parting ways.
Remember, Promissory Notes = Ponzi scheme. Never forget it.
Remember when I said that Promissory Notes were nothing but Ponzi Schemes? Check the Archives of my Blog for my Do Not Buy List posting.
The Ponzi scheme that I am describing above was alleged to be as high as $100,000,000. Okay, let us ponder this for a moment. One hundred million dollars divided by an average investment of say $100,000. This means that there could have been as many as 1,000 people who invested in this alleged Ponzi scheme. A thousand people! Are you stinking kidding me?
Forgive me, but are there that many greedy people out there? I know. I know. Some of the people who fell for this were simply stupid, but the truth is that most of them were greedy and stupid. Yet, they will be the first in line yelling for their money back. Somehow, I do not feel much sympathy for them. It is not like they invested in the stock of a major corporation or a mutual fund. They should have known that this was too good to be true. Come on, man!
Do not try and tell me that these people were duped by this Ponzi scheme. Totally untrue! They were greedy and believed what they wanted to believe. You will never convince me otherwise.
Another clue for the clueless is when your 'advisor' suddenly owns two houses, expensive jewelry, a new art collection, exclusive pianos, high dollar automobiles and is taking extravagant vacations to exotic places. When you see changes such as these, it may mean that you and your money will soon be parting ways.
Remember, Promissory Notes = Ponzi scheme. Never forget it.
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