Scams

Scams are really distractions.

I thought Shiny Objects were distractions.

Oh, those too. But these are intentional ones.

What’s the difference?

The difference is that, as good investors, we won’t be distracted by any types of content, not even by identity theft or scams.

Is that our takeaway phrase?

No, it's not. But THIS is:

You can’t change your life until you change your life.

Isn’t that sort of like “When You Change You” from above?

Yes, it is, DT! And THAT’s GOOD!

Eso es Bueno.

Si, Tomas dudoso!

What we really do not want, in investing and in anything, is to be distracted.

And that what scams can do.

Not everything is a scam, though.

Right, I don't want to imply that everything is a scam because it's not.

It's not like there are bad actors and scam artists everywhere.

Sometimes pitches come to us that are not exactly what we had in mind.

Those are scams, right?

No, that does not make them scams.

Like in the case of this comment about what he called a scam email from an actual service.

"Spammers spam spam spam spam emails despite a "long waitlist because we found your LinkedIn profile compelling.

Sure spammers."

Then there were a few statements of agreement around the ethics or lack thereof, including the idea that this particular service was allegedly sending emails to all the contacts of new subscribers after pinching them during the sign up process.

Getting access to consumers isn't really a scam,

He said "spam", not "scam".

True, DT, but they are very often connected and part of the same deal.

Anyway, it wasn't really a scam. That was a legitimate attempt to drum up business, they just didn't do it very well.

I learned about actual scams when I was an active financial advisor.

How?

Every year, I had to re-certify as having learned senior ethics, or how to deal with older people in a way that is both ethical, legal, and straightforward.

Sounds reasonable.

On the surface, yes! These were people who might be told they needed new roofs for their houses that they didn't need, from a place charging them a ton of money that they didn't have.

And getting them on the hook before later upselling them or just demanding more money, with an inability to cancel or take any action against the caller.

Those kinds of things are scams.

Yep, and there are a lot of investment scams as well as a lot of legitimate investing opportunities.

Like?

Well, the one name in the last 20 years that no one wants to be associated with…

Anymore.

Right, anymore, and that is Bernie Madoff.

That’s the obvious place that everyone goes.

The Ponzi Scheme?

Yes, and in this case the biggest Ponzi Scheme yet!

But…?

But that’s just the other extreme. And extremes are just another distraction.

So, say this with me:

Don't be overly worried. Just be aware.

Don't be overly worried. Just be aware.

If you really need to demonstrate your concern over scams for any reason, focus on the more concerning issues.

Such as?

Such as bubbles, and so-called can’t miss opportunities.

Tell me about 2 bubbles.

Okay, a really old but important one is known as the Dutch Tulip Bubble or Dutch Tulip Mania.

How old?

The 1630s. Long before any email scams or harmful software.

And what happened?

What happened is that prices for some tulip bulbs got really high and then collapsed.

It is probably the first recorded asset bubble in history. But it was not a scam.

What was it?

It was, um, what was that book title?

Irrational Exuberance?

Yeah, that one. That book title is what the Tulip thing was. People wanted to get rich quick without putting anything into it.

Good luck with that!

Yeah, that’s what I’d have told them.

My other example is the housing bubble of the early/mid-2000s which led to the Great Recession, the financial crises of 2007 and beyond.

This wasn’t a scam either, except in the sense that some mortgage products were offered for the wrong reasons.

Why bring it up, then?

Because it’s what is really likely to happen, that is, if anything bad happens, which…

Although possible…

Although possible, just isn’t likely.

But a break is likely, isn’t it?

You’re a fast learner, DT!

What do I mean when I'm talking about scams and investing?

Yes! Please, use your internet service to write a graphic picture. Tell us a story won’t you?

Are YOU being sarcastic?

No. I’m coaching you like you coach our listeners!

You want to be better at storytelling, right?

Yes, DT. I do!

So, tell stories! Pass on your wisdom like you might, some, oh, some "anti-aging" products.

Oh, right! I’ve got the connection, your coachiness!

How should I start?

Once upon a time?

Let’s work on that.

Good call, DT. Let me direct your attention to a bit from a distracting email I got while writing this.

Why do that?

I’m setting up a point.

Oh, okay, go on.

Here’s the mail, with the key identifier thingies taken out so I’m not embarrassing anybody.

Hello, Congratulations! You’ve completed your pledge drive. Your combined pledges total $0.00 for [fill in the charity name here]. That’s amazing! We’ve sent an email to your pledgors indicating where they should donate and how much based on their pledge amount. I’m sure you’ll want to reach out to them directly too. Thank you for taking on such a big challenge. You’re making a huge impact.

Sincerely, Mr. Generic.

Is that a charity scam?

Not a lawyer, DT. Not going there.

Okay, it's not amazing. Um, about that point you were setting up. I hope it was about beauty products.

Nope, sorry. This email was about a fitness thing.

Connect, please.

But let’s suppose it had been about a financial thing.

And?

And let’s further suppose that you considered paying attention to it as working toward your goals.

You need better goals, then.

Agreed, DT, but still, this happens.

We allow ourselves to spend time with a mail from a business owner like the above, or something the postman brought, or something from one of the many government agencies...

Or even worse,

I’m listening.

Financial Scam News!

Brilliant. You’ve connected!

Do you have an example of such Financial Scam News?

I do, but it’s an important piece of next week’s show about the SEC. So, I’ll hold off on that one for now.

The What?

The SEC – Securities and Exchange Commission.

It's something that's designed to separate you from your money and give you nothing in return.

It is?

No, that was just a bunch of words that were sitting in the unedited script like bogus debts.

Be careful not to be too quick to judge there. They might be identity thieves!

Really?

No, that's another distraction. They happen all the time!

Remember, this is always going to be relative to your goals, so stay focused on that.

Just learn to ignore the distractions as well as any bad business practices.

Yep, and it isn’t easy. People will not understand you when you do.

Why not?

Because they’re trained to think a certain way, which is not the way of success. And they want you to think that way too, so that they don’t feel alone.

I never feel alone.

Even when you’ve been scammed?

Huh?

You were thinking we wouldn’t take a second break. But our listeners need that pattern interrupt.

Right. Let’s do it.

The Titanic is unsinkable!

What?

I said, The Titanic is unsinkable!

I think there’s some evidence about that not being true.

Yeah. I don't remember any consumer alerts. OK, then, how about this? Romance Scam! Nigerian Princes!

Kuf.

But just getting attention like that is not a scam.

Or was it?

Well, I suppose the Titanic could have been just one of many business opportunities, if they knew it was not unsinkable, and they knew about icebergs and such…

Which they didn’t.

Which means it wasn’t a scam. They weren’t intentionally lying.

But they were distracting people.

Yes! Like what recently happened with the GME thing.

The What?

The Gamestop going to the moon thing from early 2021.

Everyone got caught up in the side story about how the short-sellers…

Those un-patriotic jerks…

Careful, DT. Shorting can be a good strategy sometimes.

All right, the side story?

Yes, how the short sellers just couldn't take home those millions of dollars as a quick profit. They had to be stopped and they, the GME/Wall Street Bets people, were going to see to that.

Billions Of Dollars!

No, not billions, don't get carried away, DT.

Okay, so what really happened?

Well, a very popular online trading service put a halt on trading that stock, and depending on who you believe, shorted out…

No pun intended, there, I hope, Thou elvish-mark’d, abortive, rooting hog!

No, that was an accident, Richard the Third. I was going to say that they had shorted out the whole plan.

But they didn’t?

Nope. They stopped trading because of a pretty obscure federal trading rule.

Which you’re not going to go into.

Nope! That’s been done and that’s not what we do here.

You mean adding noise is not what we do here.

Right, and that would just be adding noise. Like phone scam calls or telemarketing calls or other common scams or imposter scams.

Pyramid schemes?

Any type of scam!

We simply want people to cut that noise out, like, like…

Like noise-cancelling headphones?

Exactly, DT! Cut it out and focus! Make monthly payments to your investments, not your debts!

When you can see what you’re doing, and you’re not looking at distracting things, whether or not they might be scams, then, then, then…

What?

Then you can THINK!

Oh! And remember to do better the next time.

And what do you do in order to remember?

You practice remembering, and you remember to practice.

Because…

ALL YOU NEED TO DO IS PRACTICE, AFTER WHICH YOU’LL GET GOOD!

¡Gracias por escuchar! ¡A la prochaine!