1 hr 5 min
How to spot a con (#221) The Fat Wallet Show from Just One Lap
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- Education
I find it odd that so many people fear the stock market and then get lured into financial scams. Inspired by James, who is trying to keep his clan from being conned, we help you figure out when something is just not right.
Here are some tips to get you going:
Find out if the company or product is registered with the Financial Services Conduct Authority (FSCA). This is not foolproof, but it takes a diligent kind of con artist to steal money in this way. It does filter out a lot of the scum. Run the opportunity through the Just One Lap five concepts filter: At the end of this experience, will you own an asset? Will you earn income on that asset and will that income compound? Will the returns beat inflation? Compared to what your index of choice did over the same investment period, do the returns seem too good to be true? The promised returns are a huge red flag. If you’re new to financial matters, it’s hard to know what’s a lot and what’s a little. As a rule of thumb, when an “investment opportunity” offers monthly returns, be very suspicious. It’s industry practice to quote returns for a year. Google not just the company or product (that’s usually fairly easy to control), but also every individual’s name associated with the product. Scammers love getting away with scams, so they tend to circle back. If you find media articles about the legitimacy of the product and the person you’re dealing with tells you they’re taking legal action against the media house, be very suspicious. This is an old trick to put potential investors at ease. Remember, you don’t have to be in the right to bring legal action. We also spend a little time on helping you think about alternative, unlisted investments and the place they should have in your portfolio.
Subscribe to our RSS feed here. Subscribe or rate us in iTunes. James
How do you know you are investing with a fraud? More importantly, how do you convince your friends or family that they are going to get fucked?
A friend of mine invited me to listen to a guy that is willing to invest your money through his company. The returns are absolutely amazing! 77.64% for the year in 2017!
To the untrained ear, this guy sounds lekker. He explained that they move the money to America and use a computer program (that his son developed) to predict the market. The level of risk is then adjusted by the amount of gold (held at the bank of England) in a portfolio. They do all of this at a fee of 1%.
I asked him a few questions about custodian accounts, insurance, brokerage, total investment cost, TAX and all kinds of clever shit you and Simon spoke about on the show. I could see this guy has no idea what I am talking about and then he referred to an ETF as an "Electronic Traded Fund" then I knew this is a fucking keeper! He told me that he is not here to convince or force anyone to invest with him. But there he was, trying to convince people to invest with him.
I am convinced this guy is a fraud, but my friends are not and eating up every word this guy is saying. My friends have family invested with him and have seen returns so now they are true believers.
What do I do?
Win of the week: Martie
I enjoy your writing and podcasts. Think the fact that you do not come with a background in finances makes it easier for the ordinary person to relate to you. And the fact that you have learned so much about finances gives us hope that we can do it too. Definitely an inspiration.
You and Simon are a mean team and I am really glad I discovered you.
Ani
I have an option to take a pension backed loan. Each month, the payment will be deducted from my salary. Should I default, they will take the money from my pension.
The interest rate for the loan is prime minus 1%, and there are no registration costs (which would be a minimum of R35000 according to the bank should I apply for a 2nd bond).
We are expecting the renovations to cost betwe
I find it odd that so many people fear the stock market and then get lured into financial scams. Inspired by James, who is trying to keep his clan from being conned, we help you figure out when something is just not right.
Here are some tips to get you going:
Find out if the company or product is registered with the Financial Services Conduct Authority (FSCA). This is not foolproof, but it takes a diligent kind of con artist to steal money in this way. It does filter out a lot of the scum. Run the opportunity through the Just One Lap five concepts filter: At the end of this experience, will you own an asset? Will you earn income on that asset and will that income compound? Will the returns beat inflation? Compared to what your index of choice did over the same investment period, do the returns seem too good to be true? The promised returns are a huge red flag. If you’re new to financial matters, it’s hard to know what’s a lot and what’s a little. As a rule of thumb, when an “investment opportunity” offers monthly returns, be very suspicious. It’s industry practice to quote returns for a year. Google not just the company or product (that’s usually fairly easy to control), but also every individual’s name associated with the product. Scammers love getting away with scams, so they tend to circle back. If you find media articles about the legitimacy of the product and the person you’re dealing with tells you they’re taking legal action against the media house, be very suspicious. This is an old trick to put potential investors at ease. Remember, you don’t have to be in the right to bring legal action. We also spend a little time on helping you think about alternative, unlisted investments and the place they should have in your portfolio.
Subscribe to our RSS feed here. Subscribe or rate us in iTunes. James
How do you know you are investing with a fraud? More importantly, how do you convince your friends or family that they are going to get fucked?
A friend of mine invited me to listen to a guy that is willing to invest your money through his company. The returns are absolutely amazing! 77.64% for the year in 2017!
To the untrained ear, this guy sounds lekker. He explained that they move the money to America and use a computer program (that his son developed) to predict the market. The level of risk is then adjusted by the amount of gold (held at the bank of England) in a portfolio. They do all of this at a fee of 1%.
I asked him a few questions about custodian accounts, insurance, brokerage, total investment cost, TAX and all kinds of clever shit you and Simon spoke about on the show. I could see this guy has no idea what I am talking about and then he referred to an ETF as an "Electronic Traded Fund" then I knew this is a fucking keeper! He told me that he is not here to convince or force anyone to invest with him. But there he was, trying to convince people to invest with him.
I am convinced this guy is a fraud, but my friends are not and eating up every word this guy is saying. My friends have family invested with him and have seen returns so now they are true believers.
What do I do?
Win of the week: Martie
I enjoy your writing and podcasts. Think the fact that you do not come with a background in finances makes it easier for the ordinary person to relate to you. And the fact that you have learned so much about finances gives us hope that we can do it too. Definitely an inspiration.
You and Simon are a mean team and I am really glad I discovered you.
Ani
I have an option to take a pension backed loan. Each month, the payment will be deducted from my salary. Should I default, they will take the money from my pension.
The interest rate for the loan is prime minus 1%, and there are no registration costs (which would be a minimum of R35000 according to the bank should I apply for a 2nd bond).
We are expecting the renovations to cost betwe
1 hr 5 min