How to Recognize Common Investment Scams

The Most Common Investment Scams

First Published Date: September 6, 2010 ADawnJournal.com

We all want to make money. That quest is essentially what makes the world go round. Making good money is important because the more money you make, the easier of a life you often have. Many people will work for their money, but some like to make money even when they are not busy working. This is done through investments. Whether you are investing in real estate, stocks, or bonds, you are making money when those investments make money.

Sadly, there are those out there who also want to make money off of investments, but in an illegal manner. They want to make money off you giving them money for fake investments. This is actually more common than people think and each year it can cost people billions of dollars.

Knowing the scams is a good way to avoid becoming a victim of those scams. So, to help you, I present the most common investment scams out there.

1.   Ponzi Scheme: named after Charles Ponzi, this is a common type of investment scam that has been in the news a lot in the past few years. In the early 1900s, Ponzi was able to get $10 million from investors by promising them 40 percent back. He would use the money from new investors to pay the returns of old investors. This works until there are no new investors and the money dries up. Bernie Madoff did the same thing and defrauded hundreds of people out of billions of dollars over the course of two decades.

2.   Promissory Notes: These are short-term debt instruments that are sold by insurance agents and issues by non-existent companies. The agents promise very high returns of as much as 15 percent monthly with no risk. Sadly, this is not the case as the money is given to the agents and then never seen again.

3.   Senior Investment Fraud: Seniors want to have money for retirement, which leads them to finding investments to help money coming in. Con artists will contact seniors and offer them steady returns, low risk and high rewards if they invest in bogus securities, promissory notes, charity gifts and more. One such scam took $2 million from senior’s pensions and IRAs in Pennsylvania in 2003.

4.   Stockbrokers: Many stockbrokers are honest and love what they do, but some are out there to steal money and defraud individuals. Some stockbrokers will cut corners to gain investors and charging unlicensed fees in order to gain money from investors who are not informed about the law.

5.   Unlicensed Agents: There are some con artists who will say they are insurance agents who can help make you money through investments. However, they will not have any license to do so and therefore are not there to do you any benefits. They will promise very high returns, very little risk, and consistent returns for investors. It is very important that you contact the security regulator in your state to see if the agent is licensed.

6.   Prime Bank: Con artists will offer you over 100 percent in returns through investment portfolios in the major banks on the planet. They will target people and mention secret investments by leading world families and royalty. They will state these are banks and investments that are only open to a few, highly wealthy people and investing in them will yield immense rewards. There is no such thing as secret investments and banks, but sadly these con artists target those who believe in conspiracy theories so governments saying there are no such investments only add fuel to the fire.

7.   Internet Fraud: With the Internet being available to everyone, there is a lot of opportunities for individuals to cheat others. Whether it is through phishing, identity theft, or offering bogus investments, there is a lot of ways con artists can target potential investors on the Internet. In just one investigation in November of 2003, 125,000 victims were discovered, who lost more than $100 million combined. It is important that investors do their research and do not take what

8.   Affinity Fraud: When there is a serious natural disaster, many will come together to help. They will donate money to offer relief to those affected and con artists will have no problem stealing that money. Some con artists will offer you the chance to give money to charities, which will get you a tax write-off. However, they will just take the money and run. Some con artists will also use this method with foreign exchange scams.

9.   Variable Annuities: Many investors do not know what variable annuities are and con artists will take advantage of that. Agents and con artists out to make a buck will use that lack of knowledge to make a lot of money off of investors. It is no surprise that the increase in annuity sales has also come with a big increase in complaints. Con artists and agents will not disclose the very high sales commissions or surrender charges to investors. Many of these bad individuals will target investors, especially seniors, through investment seminars. The problem is this type of investment is not suited for those who are retired. You should only go for a variable annuity if they can keep their investment for 10 years or more.

When you are trying to make money off of investments, it is important that you do your research so that you do not fall victim to investment fraud. You want to make money off your investment, not lose it and never be able to recover it. Talk with reputable agents and agencies and even hire a financial advisor you trust. Also, do your research on who is handling your money and request constant reports on how your money is doing. You are giving someone your money to make you money, and you have a right to know what that money is doing for you. Don’t be afraid to ask questions and get the right investment for you through proper research.

What is Outsourcing?

Outsourcing 101

First Published: September 12, 2010 ADawnJournal.com

The word outsourcing is often a bad word in North America. When people hear it they think of people losing their jobs to someone oversees. However, how much does everyone really know about outsourcing?

Outsourcing is essentially contracting someone out of the business to do something that had previously been done within the business. So, two organizations enter into an agreement that involves the exchange of services and payments. Companies these days can outsource to contractors within the same country, or to other businesses in another nation in an effort to save money. This is called offshore outsourcing and it is very popular among larger companies.

So, why does a company choose to use outsourcing?

1.   The first reason is that it is cheaper. The overall cost for the service to a company is much lower because they can either pay less, or not have to pay benefits. By using off-shore outsourcing, companies can pay the workers there a fraction what they pay workers in the developed world.

2.   The company may want to focus on its core business and therefore leave everything else to outsourcing. For example, the company may want to focus on making paper, so it outsources its customer service to another customer service company.

3.   A company may want to restructure its cost structure. They may want to balance the ratio of fixed and variable costs by moving things outside the company.

4.   Sometimes outsourcing is done in an effort to improve the quality of the service or product of the company. If the company makes computer chips and does not have good customer service, they may outsource the customer service to a company that has better customer service.

5.   The company may want to get access to another talent pool, which can help the company in the long run.

6.   The company may use outsourcing as a way to enhance the capacity for innovation within the company. The company will use external knowledge service providers to help the company.

7.   The company may want to use outsourcing as a way to deal with risk management for some risks, and an outsourced company may be able to handle those risks better.

8.   Some companies will use venture capital as a way to outsource because some countries match government funds in venture capital with private venture capital for new businesses starting up.

9.   There is a tax benefit for companies who outsource sometimes. Countries offer tax incentives to companies who move their manufacturing operations to another country.

10.   An outsourced company is often better able to manage the increase or decrease in production, making it easier for a company to make money.

11.   Some companies, especially for small businesses, there is the desire to outsource work so that work-leisure time can be maximized and balanced. By having someone else deal with computer issues, the business owner does not have to deal with it themselves.

In some cases outsourcing can be bad, but in other ways it can be very beneficial for a country and a company.

Malaysia Travel Blog: Discover Amazing Kuala Lumpur City Tour

Kuala Lumpur Travel Blog: Part 4

Kuala Lumpur Full-Day City Tour – Part 1

On the 18th of December 2018, my first full day in Malaysia was scheduled to start with the Discover Amazing Kuala Lumpur City Tour. The tour starts at 9, but I was expected to be at the Malaysia Tourism Centre (MaTic), No. 109, Jalan Ampang by 8:45 AM.

I took a taxi from the hotel to reach the Malaysia Tourism Centre. The Uber version of a taxi was called Grab. I had to install the app the night before, as Uber no longer operated in Malaysia. It was morning rush hour with moderate traffic.

After reaching the destination, I got a little confused because the Malaysia Tourism Centre was a big area and I was not sure exactly where to wait for my guide. I went inside the building and asked a few people I saw. They pointed me to a spot outside the building, but within the boundaries to wait.

After waiting for a while, the guide appeared. He directed me to the tour car we would be using for the tour. It seemed like I was the only one on this tour – not a bad thing.

The Discover Amazing Kuala Lumpur City Tour was a full-day, six-hour tour which would cover contemporary and ancient attractions in the greater Kuala Lumpur. We would be visiting the Petronas Twin Tower, the Batu Caves, Royal Selangor pewter factory, KL City Gallery, and the National Mosque.

$75000 A Year Buys You Perfect Happiness

Happiness Comes At A Price

First Published: ADawnJournal.com September 19, 2010

The Beatles said Can’t Buy Me Love, and that All You Need is Love but a recent study done by Princeton University found that while you can’t buy love, you can buy happiness. In the study, 450,000 Americans were surveyed and analyzed. Between 2008 and 2009, the study found that there are two forms of happiness. There is the happiness that comes from being content day-to-day and there is the happiness that comes from being satisfied with who you are and where you are in the world. The study was done by economist Angus Deaton and psychologist Daniel Kahneman.

The study discovered that having more money will not increase the contentment you feel on a day-to-day basis, but it will increase the overall satisfaction that you feel in your life.

Not only did the study find that, but it also found that there is a specific dollar amount that gives you the most happiness. Once you go over this dollar amount, the amount of happiness and satisfaction you feel does not increase anymore. Once you hit the plateau of $75,000, your day-to-day happiness no longer increases. So, if you have $1 million, you will have the same amount of happiness that you have at $75,000. Your overall satisfaction can still increase though.

One interesting fact is that the happiness you feel will be based on your income and where you are in a specific country. For example, in the United States, you would need to earn $163,000 in New York City to have the $75,000 level of happiness. In Chicago and Pueblo, Colorado, you would need to earn $84,750 and $62,000 respectively.

This doesn’t mean you are going to buy your happiness with things but money will help you feel better in your life. When you are living paycheque-to-paycheque in your life and you are wondering how you are going to pay your bills, you are often not very happy. However, as time goes on and you make more money, you will begin to feel better and happier. Waking up in the morning knowing you won’t lose your house will make you happier and more content. When you know you have enough money to go out for food, to buy some of the things you want and to go on vacation, you will be happier.

Now, that all being said, if you are going to be happy with your $75,000, then you cannot decide to just go and live a $100,000 lifestyle. You need to live within your limits because if you don’t you are going to suffer financial stress that is going to lower your contentment and happiness. Remember, live within your limits and that way you will be happy. In American right now, millions of people are living outside of their means and that puts immense financial stress on their lives and their families. You do not want that, so make sure you have your happiness at a price you can afford.

If you don’t make $75,000 you can still be happy, but that $75,000 limit is something you should shoot for to be financially happy and emotionally content within your life.

What Is A Reverse Mortgage?

Reverse Mortgage, Home Income Plan, or Equity Release Schemes

First published: ADawnJournal.com May 24, 2010

Home equity release schemes are becoming more and more popular Canada, Australia, the U.K., the U.S., and other countries as a way of boosting retirement incomes for those people who are finding it difficult to live comfortably on their govt. pension and have a significant amount of their wealth tied up in real estate property. They are referred to by a number of names colloquially, of which one is the “reverse mortgage”. This title has come about because just as a mortgage sees you paying money bit by bit towards the end goal of owning a house, an equity release scheme allows you to withdraw from a pot of money that you have paid into, with the end result being that you own none of your house, and will gain nothing from its sale.

One of the most popular ways to conduct a home equity release is to sell your home to financial institution who will then lease it back to you. You benefit from an immediate cash lump sum, which you can add to the govt. pension and any other pension you receive in order to pay the rent. If you have paid in a significant enough amount to your mortgage you will be able to use some of the cash lump sum to pay off the remainder of what you owe to the bank. If you are mortgage-free, you will have the entirety of what the financial institution paid you to do with as you see fit. It is important to find a reputable institution with whom to carry this out, however, as institutions have been known to default on their own mortgages, leaving their tenants in a situation of real difficulty.

There is some controversy over the morality of offering an equity release scheme, as many people consider that the deal is “mis-sold” by the institutions who offer it. Quite often, the amount that is paid for the house is less than two-thirds of its actual value, and that much less than the individual would be liable to receive if they were to sell it on the open market. What they gain from this is the opportunity to stay in their own home, but as mentioned above, the institutions offering equity release are not always wholly reputable.

If the sum total of all of this is to make equity release schemes look like some sort of scam, then that is not the intention. It is merely to say that when looking into home equity release systems it is generally beneficial to do a bit of background work, finding out from past customers how reliable, efficient and trustworthy the institutions you have spoken to are. If you get a deal from a reputable institution the equity released will allow you to use a more pro-active method of wealth creation which will potentially leave a lot more money for you to bequeath in your will should you wish to, or to enjoy retirement in style otherwise. It is worth speaking to an independent financial advisor to get more specific information to your case.