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Hi all,
I think it would be constructive to share our mistakes. This time instead of show and tell everything that we might have done financially in the past, lets limit it to trusting an "expert" that used a unique strategy.
Way back in the early 80's, my companion and I had $5000 in cash to "invest." We went to a lecture on investing. The presenter was a very smooth, entertaining, knowledgable, operator (aren't they all). The only good idea that I benefited from this guy was a list of investment books. I read most of them and that got me started in my education in investing.
Here is how we got taken: One investment technique this guy advocated was factoring, the sale of accounts receivable. He said it was a very profitable, 20%, and been around for hundreds of years. I remember thinking if it’s been around that long, it must be OK. We invested the $5000 and before we ever got a check, the company that it was invested in went bankrupt and obviously lost our money. Furthermore, add insult to injury, by the time this "guru" was eventually arrested and went to jail, we got $5.00 back after all of the litigation process was completed.
The only other time I relied on an "expert" has been reported here in which we all know, getting sold a TSA. From the late 80s to now, I have never relied on a professional.
The point is if you are "guaranteed" more than the market averages with little or no risk year after year with a strategy that you never heard of, in my case, factoring, get out of there fast!
Anybody else?
Have a happy holiday,
Steve
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How Have You Got Taken? Regarding the Madoff case
#2
Posted 19 December 2008 - 11:08 PM
Hi Steve,
The first president of UTLA sold investments in a similiar plan after he was no longer president. That was about 30 years ago or more. As I remember it, a bunch of UTLA members gave him their money. The investments went belly-up. There were a lot of unhappy investors.
Probably the only thing that saved me from a get rich scheme was I really didn't become interested in saving money until late in life so I miss out on all the fun. Best Wishes.
Joe
The first president of UTLA sold investments in a similiar plan after he was no longer president. That was about 30 years ago or more. As I remember it, a bunch of UTLA members gave him their money. The investments went belly-up. There were a lot of unhappy investors.
Probably the only thing that saved me from a get rich scheme was I really didn't become interested in saving money until late in life so I miss out on all the fun. Best Wishes.
Joe
#3
Posted 20 December 2008 - 01:35 AM
Hi all,
Good grief, how many of our sad stories do you want? Let's see, there was my husband's roll-over in the mid 80's that a MONY salesman put into bonds... he wasn't enough of a financial whiz to point out that at our tender age, bonds were not appropriate for an entire portfolio. And then there was our kids' inheritance from great uncle John. That went with a family member that was a broker with a small security outfit in Spokane. We did get a bond for each kid, which was good. But the investments in stocks went belly up -- some sort of a race track deal, if I recall. Our other money with this fellow went into the stock in a new company making a game -- the next Monopoly or Scrabble we were told. We never heard of "penny stocks" before that little adventure. The good news is that one of the kids used his bond money to get out of a little trouble and to buy a lousy car... it did last long enough to get him home from the other side of the country, though he stumbled into the driveway with just 2 cylinders working and the whole vehicle R-R-R-R-R-R-R-R-R-ing like a lawnmower! The other kid has forgotten all about it and doesn't know what happened to his $$. We put it into an IRA with a no-load company for him and we get the statements and don't tell him anything. That's probably illegal, but maybe we'll tell him when he turns 30. Or 35. (Don't turn us in!!)
After the MONY guy I got furious and decided these characters weren't any smarter than I was, so took a yellow tablet and pencil and headed out for hours and hours and hours in the library. And we're still working at it... learning a little more each day.
I sure feel for those guys with Madoff.... spreading your investments out does prevent the annihilation of your portfolio, though, which everyone should know...
JudyS
Good grief, how many of our sad stories do you want? Let's see, there was my husband's roll-over in the mid 80's that a MONY salesman put into bonds... he wasn't enough of a financial whiz to point out that at our tender age, bonds were not appropriate for an entire portfolio. And then there was our kids' inheritance from great uncle John. That went with a family member that was a broker with a small security outfit in Spokane. We did get a bond for each kid, which was good. But the investments in stocks went belly up -- some sort of a race track deal, if I recall. Our other money with this fellow went into the stock in a new company making a game -- the next Monopoly or Scrabble we were told. We never heard of "penny stocks" before that little adventure. The good news is that one of the kids used his bond money to get out of a little trouble and to buy a lousy car... it did last long enough to get him home from the other side of the country, though he stumbled into the driveway with just 2 cylinders working and the whole vehicle R-R-R-R-R-R-R-R-R-ing like a lawnmower! The other kid has forgotten all about it and doesn't know what happened to his $$. We put it into an IRA with a no-load company for him and we get the statements and don't tell him anything. That's probably illegal, but maybe we'll tell him when he turns 30. Or 35. (Don't turn us in!!)
After the MONY guy I got furious and decided these characters weren't any smarter than I was, so took a yellow tablet and pencil and headed out for hours and hours and hours in the library. And we're still working at it... learning a little more each day.
I sure feel for those guys with Madoff.... spreading your investments out does prevent the annihilation of your portfolio, though, which everyone should know...
JudyS
#4
Posted 20 December 2008 - 08:44 AM
How about being sold a two tiered annuity while I was still in my 30s? The one with the never ending surrender charge.
I'm not sure if that is an example of being "taken" as much as it is of my being "ignorant."
I'm not sure if that is an example of being "taken" as much as it is of my being "ignorant."
#5
Posted 20 December 2008 - 12:49 PM
QUOTE(apteacher @ Dec 20 2008, 08:44 AM) 
How about being sold a two tiered annuity while I was still in my 30s? The one with the never ending surrender charge.
I'm not sure if that is an example of being "taken" as much as it is of my being "ignorant."
Hi Tony,
I was sold two of those and paid 6000 in surrender fees to get my money out.
One thing that I have learned is that we had to pay the tuition to learn this stuff. Hopefully the word has gotten around to avoid these terrible products.
Have a great weekend,
Steve
#6
Posted 20 December 2008 - 01:40 PM
Hi again,
It doesn't surprise me that none of the pros or experts who are paid by the financial industry have come here and reported what they invest in personally let alone their personal financial mistakes (Scotty is one exception that I am aware of).
In contrast, on the Bogleheads forum, Swedroe and Ferri, two authors that we greatly admire around here, report many mistakes. The message is clear, nobody is invulnerable and it displays strength in character of Swedroe and Ferri, that one is not always right. It clearly reveals MASSIVE differences in professional culture between the forums.
Steve
It doesn't surprise me that none of the pros or experts who are paid by the financial industry have come here and reported what they invest in personally let alone their personal financial mistakes (Scotty is one exception that I am aware of).
In contrast, on the Bogleheads forum, Swedroe and Ferri, two authors that we greatly admire around here, report many mistakes. The message is clear, nobody is invulnerable and it displays strength in character of Swedroe and Ferri, that one is not always right. It clearly reveals MASSIVE differences in professional culture between the forums.
Steve
#7
Posted 20 December 2008 - 01:59 PM
QUOTE(sschullo @ Dec 20 2008, 01:40 PM)
Hi again,
It doesn't surprise me that none of the pros or experts who are paid by the financial industry have come here and reported what they invest in personally let alone their personal financial mistakes (Scotty is one exception that I am aware of).
In contrast, on the Bogleheads forum, Swedroe and Ferri, two authors that we greatly admire around here, report many mistakes. The message is clear, nobody is invulnerable and it displays strength in character of Swedroe and Ferri, that one is not always right. It clearly reveals MASSIVE differences in professional culture between the forums.
Steve
Biggest mistakes:
Paying a broker to execute trades before I opened an account at Schwab.
Not buying Berkshire Hathway at 40,000.
#8
Posted 20 December 2008 - 03:47 PM
Intruder,
I got a tip after the 1987 crash that Microsoft stock was $39 dollars a share. If I bought $10,000 at that time, I would have had several million at the high of the tech bubble in 2000 a mere 13 years later, but I don't count, could of, should of, would of, as mistakes.
I count real money that was lost, gone, vanished and feeling the pain of it.
Steve
I got a tip after the 1987 crash that Microsoft stock was $39 dollars a share. If I bought $10,000 at that time, I would have had several million at the high of the tech bubble in 2000 a mere 13 years later, but I don't count, could of, should of, would of, as mistakes.
I count real money that was lost, gone, vanished and feeling the pain of it.
Steve
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