Every day we read about another Ponzi scheme which was sold to unsuspecting individuals for amazing amounts of money by self proclaimed “Investment Advisors”. Some of the sums of money, such as in the case of Bernard Madoff, are truly staggering. To have absconded with $65 billion is, to me, inconceivable. Mark Dreier who is only in the hundreds of millions looks like small change in comparison.
In Montreal there is the story of ‘Uncle Earl’ who spent somewhere in the $75 million range of other people’s money living the lavish life, never once thinking that this money actually was not his, but he, of them all in recent times is the one who is the most despicable. To be chasing after widows and old women for their total assets, including visiting them in the hospital to convince them to give him their money, sometimes on their deathbeds, goes beyond words.
The big question is, what is it about human nature that makes one so gullible as to invest such substantial sums of money with only one money manager. We are always instructed to spread the money around, as history has shown us, things are not always what they appear, and they best way to protect oneself is to invest comfortable sums of money in numerous places.
Over the years we have heard of some stunning stories, which leave readers with their mouths agape, of the deceit and cunning used to separate normally intelligent people from their money, the only difference being this time around, that the sums are greater than we have ever heard of before, and the utter gall of the perpetrators to live such openly lavish lives knowing there is no way the money could ever be repaid. How could they possibly expect that they would not be caught?
This note to the blog is short and sweet, and a simple message for all of you, spread your investments around. Do not let anyone convince you that they know better than everyone else. If the market is at 6% and someone offers you 18%, you should question the investment, and question whether or not they are a licensed investment counsellor. Check and see if there any complaints about the person or the firm. Don’t, above all ,allow anyone to bully you about how you should invest your money, and if they do, run.
If someone brags too much about their success, probably it is only in their imagination. Like anything else, usually it is the ones who are bragging who are in fact NOT successful. The ones who truly are, don’t need to brag, they already know.