Keep it Public
Keep it Public
Let's talk about the importance of Keeping it Public in regards to investing for a second. Most Ponzi schemers are going to try and appeal to your greed and offer you an investment (don't make me laugh) that pays you a 12% return. Nothing pays you a 12% return! They are lying to you. Sorry, I had to be blunt. It is funny how most Ponzi schemers offer 12% returns. That must be the magic number or something that makes people agree to give all their money to a Ponzi schemer. Perhaps, by saying 12% it automatically hypnotizes people into believing it is real. Trust me. There isn't anything that pays 12% guaranteed.
I like to watch American Greed on CNBC. They always trot out these people who lost everything. They invested all of their money in something like a Private Placement that pays 12%. Your first clue is that a Private Placement is not a publicly traded investment and you cannot track your investment! Your second clue is that it pays 12% guaranteed. (Remember, nothing pays 12% guaranteed.) Those two things alone ought to snap you out of your mental funk. The victims of these Ponzi schemers will say things like this on American Greed..."He was a nice guy. I trusted him. He went to my church. My brother-in-law recommended him." All of which are horrible reasons to invest your entire life savings with anyone, much less a Ponzi schemer.
Diversify Your Financial Advisors!This actually might be a smart thing to do. Wealthy people know and do this. Why shouldn't you? Never give all of your money to one financial advisor, especially if they are trying to get you to invest in something that is not publicly traded!
If you invested some of your money with someone like me and ALL of those securities were publicly traded, then you will be able to check up on someone like me. You should get a statement from a custodian and be able to walk into their lobby and ask to see what is in your account and compare it against the statement you received from both your advisor and your custodian. Further, you should be able to log on to the custodian's web site 24/7 and see your investments, specifically the prices and their values compared against the statements that you received.
However, if you are investing in that 12% Private Placement, then where are you going to go to see your money? Nowhere that's where! You will only get statements that are "made up" by the financial advisor who sold you that garbage. You will never know the true value of your Private Placement, because in the first year he will be paying you that 12% he promised, so you will be happy and unconcerned. Sooner or later however, that 12% will stop. That's when you start noticing his new Lamborghini, his nice million dollar house and fancier digs for an office. By the way, Ponzi schemers can be women too. We had one about 20 minutes from my office recently who made it on CNBC's American Greed.
By the way, should you really be investing your money with someone who is living large? It might mean that they care more about themselves than you and they just might be a Ponzi schemer. Another tell tale sign is if you walk into their swank offices and you find out that it is a shrine to themselves. They just might be a Ponzi schemer.
Listen up my friends. You will get taken to the cleaners if you invest in something that is not public and there is no way to track your investments. Hence the reason for the sub-title of my book: "The Reason You're Stupid." Nothing personal, but if you invest in Non-Public investments that you cannot follow, then you have no one to blame but yourself.
Do yourself a favor. Keep it Public when it comes to investing. You will be glad you did. Sorry to be so blunt, but somebody has to tell you how the cow ate the cabbage.