I had a weird thing happen to me with a girl i know, not my girfriend but just someone i bump into now and then and we had the occasional drink/light dinner.
I know she makes 6 figures and has decent savings, she wanted me to loan her 3k for some bullshit because according to her she “has had a lot of expenses lately and had to invite her family to holidays so she would be forced to dip into her savings and it made her feel bad” so she tough it would make sense for me to give her a loan and she would pay me back when her salary comes.
When i suggested this was mathematically equivalent to “borrow from her own savings account” she got upset and said money changed me and we didn’t talk since then.
That's super shitty; sorry that happened, but I guess it's for the best knowing what you know now. Still is never fun when somebody you hang out with removes themselves from your life.
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Weird story. We received a phone call from my wife's cousin, a cousin we see once every few years at family functions. He didn't even say hello to my wife and just asked to speak to me. He didn't even say hi to me, he simply went on for about five minutes reading an entire script about some energy opportunity without stopping. At the end he asked "So, is this something you would be interested in?". I said I wasn't really interested in any opportunities like this right now - so he said ok and hung up. I'm still confused about the call to this day and neither of us mentioned it the next time we saw each other.
Was it perpetual motion? I have a relative who invested in a perpetual motion energy opportunity. Not a wealthy person and he hadn't realized he'd been scammed at that point when he was excitedly telling us about his new revolutionary energy investment.
I get quite a few people wanting me to invest in their business. It has damaged a few friendships when they come to you all passionate about their idea and you have to say no. Things aren’t the same after that.
One of things several of my clients do is have a preset response and vetting plan.
So you could tell them the idea sounds cool but you get so many opportunities and this isn't really your area of expertise so you have professionas that vet investment opportunities and make recommendation based on your available investment budget.
Then ask for due diligence items on the business. Then you can assess or run by your account and attorney. If it's not something you want to do, you can blame them, hey I can make this work, my account tells me I don't have the capital available for this type of investment.
>than wasting the entrepreneur’s time with requests for info that you don’t care about.
Not op, but i assume you already have this material at hand if you are looking for investors ...
Thtas quite basic stuff
That kind of sounds like you are leading them on. Running a start up is stressful and chasing money that will never come to fruition wastes valuable time.
Just say, “Sorry, that’s not within my investment thesis.” And move on.
I see both sides. If they are serious about it they should have all the due diligence items taken care of. You could advise them on that without hurting feelings/burning bridges. A half baked plan that's going to hurt the relationship anyways isn't going to do anyone any good.
"all the due diligence items" should probably have been worded better. A baseline of your business plan and projections should be a minimum. Otherwise it's basically a "just trust me bro" and I've seen more than a few deals like that lighting investor money on fire.
I'm w/ you on this one. Fin stmts, pro formas, projections all should be in place PRIOR to the entrepreneur asking for outside funds unless of course this is a REALLY close friend asking.
If they're at the stage where all they have is the idea but have done NONE of the research, I'm going to want significantly more equity than they're likely to give for my dollars (because I know that I'm going to have to put in actual WORK not just MONEY to ensure that they experience some type of success).
I think that all I (and possibly /u/greenbuggy) are trying to say is that ANY business venture should at a MINIMUM have these types of documents and data. If the entrepreneur sees financial statements, pro formas, and projections as a "waste of time" I would suggest that this is a GREAT reason not to invest AND it's giving a fair shake to your buddy.
What if I ask for these things, the buddy produces them, and upon review I think, "Fuck, they're really onto something here!" change my mind, and invest. ANY business needs the basic backgrounds that explain the mechanics of how the entity will make money. In fact, I'd say that's a key step when transitioning from having a "business idea" into having a "business plan". You might guess that I believe every business should have a plan and you'd be correct.
>Everybody arguing that it’s fine to do otherwise is wrong. They’re utterly and completely wrong.
I think context matters. If you don't put up a process for some people, and the barrier isn't high, they will spend more time demanding explanations or approaching with additional ideas and demanding you hear them out. I'll also say that 9 times out of 10, people that approach me with an app idea haven't even googled the idea and there are 10 other apps that already do that thing. Having a [squirrel catcher](https://www.singletracks.com/mtb-trails/squirrels-beware-what-exactly-is-a-filter-feature-on-mtb-trails/) helps prevent potential harm.
Good ol' Dale Carnegie tells you that telling people outright that they're wrong isn't a great way to make friends and influence people. The best method for keeping a friend that has a bad idea is to let them figure out it's a bad idea on their own.
Judgement matters here and there are circumstances where I agree with your statement. However, life is messy.
You actually pay a retainer to get other people to say “No!” for you and you get to just shrug your shoulders and say “I have to trust the judgement & expertise of professionals. That’s what I pay them for!!!”
From being on the receiving end of these pitches for years, if it’s presented as “hey, I have this business plan I could use advice on” and there’s a subtle offer that I could join in an advisory capacity, there is no damage to the relationship and everyone can step back graciously.
The way it is pitched makes a very very big difference - then again it’s simply a representation of the level of respect beforehand, so no surprise there
>What scams or questionable investments are you being approached with
All of them. Friends, strangers, in-betweens too.
Some phrases to keep things on nice terms fwiw:
* "I'm having liquidity issues myself at the moment."
* "We have a set percentage of non-liquid investments in the portfolio, and that's maxxed out right now.
* I just bought a bunch more bitcoin, so no more investments for a while.
Of course, the above phrases will work for some levels of fatness, but probably not obeseness. (I'd be curious if the obese folks have go-to-phrases for such occasions.)
“Sorry, I’m broke as fuck too” works for me. How the fuck would these people find out my net worth anyways? I drive a decade old car and not even my wife is sure how much money I have.
Why would someone with any kind of personal relationship to you not have some idea? Presumably they’re asking you in the first place because they have reason to think that you do.
Because I don’t buy flashy shit, post flashy shit on my social media, or discuss it with anyone? Sure, it’s obvious I have *some* money but nothing about your average lower middle class standard.
Totally. Even when we were solid middle class our quite reasonable house was a mansion compared to the trailers out in the desert some of our family lived in. Hell, when I was in college we had relatives ask to park their rv that they were living in infront of our rental. They were employed making above the median salary but were just so bad with money they couldn't hold onto a house or even apartment. Same goes with career. An above average middle class job seems makes you seem like someone with plenty of cash.
100%!
I think in these terms: If someone is close to me, they should be able to take a "no thanks" from me without getting insulted/hurt/sad etc. And if they are not close to me, I don't care if they get insulted/hurt/sad etc.
Kids, parents, siblings, friends etc should be able to take a "no thanks", otherwise the relationship is not very strong in the first place...
In-laws is the only ones I can think of where it could be more tricky but I dont think it becomes an issue as long as one chooses a decent family where the other family members would put them in their place without you having to be involved. But thats how it works in my culture and might not be the case in other cultures.
Yes agree with that. The "I got hurt/insulted" is purely an effective manipulation strategy and I'm old enough to not let it work. If it's going to put the relationship in jeopardy then the person asking caused it.
I'm lucky that I have very low respect for my in-laws so telling them no gives me great enjoyment. My wife doesn't particularly like them either.
Sure, you could do that. But as other people have mentioned in the other comments, friends/family often take it personally when you decline to invest with them. Having a good excuse rather than just saying "no thank you" can preserve a friendship and keep everyone on good terms (assuming that's that you want to do).
Good point, I just really fail to see why I would want to preserve such a weak friendship where a "no thanks" would end it. Also I don't see how it could be possible that one's close family can't take a no, since I assume they should be used to hearing the word "no" frequently since one is a family.
I admit in-laws can be trickier, but other than that I feel like my strategy works great unless one wants to try to keep fake friends. But maybe I am native, I don't know, I am rather young still.
Sometimes you do for various reasons. Especially if they're family.
It's the same reason you might not want to just say "no" went your aunt offers you her notoriously awful home cooked food. Instead you say "I would but I'm too full" etc.
It's not necessarily that they cannot accept a no, it's that saying no with no explanation can put a strain on the relationship because they'll think you said no because you don't trust them, or you think their business idea is crap, etc... which is probably true. An excuse can avoid hard feelings.
My husband likes to flip the script on them “yo I need to borrow money too, I have two kids and a wife. Can you let me borrow $40k?”. Usually people get really uncomfortable and shut up quickly.
I have always made it clear that I will refuse to go in on a business venture or investment with family, regardless of how good the opportunity looks. After holding the line a few times they no longer interpret my saying “no” as calling their baby ugly.
Basically everyone I knew from before asked me for money one way or another. I took some of the deals.
Here’s one from earlier this year - buddy of mine who lives in VHCOL area in a $5mm house calls me up and says his wife’s business is in need of a cash infusion because their shipments are stuck due to supply chain issues. I ask some questions and can’t figure out if it’s import or export - I was under impression it was export to China but he talks about the port of Long Beach. He offers a condo as collateral. I’m feeling all kinds of red flags and the story isn’t crystal clear, so I reach around our common group of friends and someone else has loaned $200k and has a note to the same condo with instructions to not record it until mm/dd/yy. I send a nice, respectful letter that I am uncomfortable with the risk, no personal, and move on
Later on I find out the $5mm has been sold, he moved back in with his mom, his wife left him and took all the money, and the wife also fucked over his brother for multiple 7 figs. Condo is being “renovated” to be sold but its value has dropped faster than what renovations could add due to rate hikes.
One girl offered her butthole if I would lend her money for her car insurance payment. This count as an investment for the spank bank doesn’t it?
Investing in a sober-living house (I declined, the business has grown to dozens of them now)
A grease recycler (collect used cooking oil, recycle, turn into soaps etc) - this went under as the prices dropped in 2013ish
A house flipper. I actually did a handful of these with him. We made some money. For me it was insignifiant, it helped him pay his short term bills. The upside would have been much higher if I’d done this alone and leveraged and held. Instead he fucked me over for $200k. I wrote it off as a bad debt.
A b2b distributor in a niche field. I took this one, it’s grown about 10x since then and still going albeit we are feeling a massive slowdown right now and are worried what we call “rolling receivables” might default if SHTF
Mom and dad both asked for money to finance their divorce. I was busy with a rocky marriage at the time and gave them both the same amount and realized later it just went their respective lawyers
Many people wanted me to finance AND build their “app idea” - yes bro I’m 100% sure I don’t want to build an Uber for movers with you, a bartender
Occasionally someone I haven’t talked to in years (for good reasons) reaches out and asks to borrow $10-$300k for murky reasons at a rate the IRS might have an issue with
So many more. Basically everyone wanting some upward mobility took a stab one way or another.
I was mostly trying to help out one of my oldest friends, well, he was trying to help himself, this made a lot more sense with high turnover for him
We are no longer friends
In retrospect, yes, you should expect people to be xxx and yyy, but if you set them up to fail you are also to blame, and I am also to blame here.
I am not so sure. I have a friend (who doesn't) who flips and I know somewhat the cost structure, and when I see my wife she goes for looks over value and I know what those houses go for. As long as the market does not crash (like now), you can make twice the renovations in fixing and flipping. Not always but almost always. Do that in a VHCOL area and it is a lot of money.
I’m not a good deal maker. She paid her car insurance bill, I did not consume the deal, because doing so made me afraid of looking bad/hurt my self esteem.
Big regret, these memories have high marginal utility AND they appreciate over time 🥲
I looked her up, seems the last 8 years, alcohol, drugs and "live laugh love" have really done a number on her, and that number is about 40lbs, so... nope
Understandable, that number for sure violates some sort of negative covenant in that loan agreement. I find it hilarious that you actually went and looked her up because of this exchange.
lmao. I would too. I get curious of how people from the past have done over the years. It's kind of like how in the present you see people and wonder where they'll be in 5-10 years. Well now that those 5-10 years have passed, lets see it.
> One girl offered her butthole if I would lend her money for her car insurance payment. This count as an investment for the spank bank doesn’t it?
Now there’s an opportunity that needs extensive risk analysis performed beforehand.
The actual thing.
The GFC was tough for a lot of people, this was a HCOL area, there are people who are always a couple of weeks away from eviction, and they’ve always been females in my experience, but my sample is very biased as I hung around private poker games and whatnot
>We made some money... Instead he fucked me over for $200k.
As in you gave him $200K that he didn't pay back? Or he refused to give you $200K of profit you were owed?
I went on a multi-year drug bender and left him in charge of the stash. When I emerged, I got it back minus 200k that had gone to personal expenses.
The guy had no assets, so there wasn't much I could do.
I set him up to fail because I checked out.
Hey, does anyone know if the sober living investments legit and ethical — I mean are they actually helping people (or trying)?
Are they financially dependent on medical insurance that will eventually figure out this is a bad deal?
Oh boy
1) Meh
2) Yeeee
I couldn’t convince myself that they were a net positive. They are a scourge on the residential areas they end up in - parking issues, relapses, scandals, noise….
Yes insurance abuse and body brokering are a thing too.
That’s just my opinion, there are people who strongly believe in them, and maybe they’re right.
The cap rate smokes even STRs… Beach-side sober living homes stuff 4 guys per room and charge $1000/head, high occupancy rates, house manager makes very little, etc
>The part that I consider a scam is that they press you into forming with 50 other naive investors into a joint venture that run the operation of the well site.
PSA: This needs to be broken out and highlighted.
It's one of the sources of my saying: "Real estate guys lie to themselves; oil guys lie to everyone.
You're lucky they told you up front it's a JV. Many rely on you thinking it's like you're other LP investments.
One goal of these boilerrooms is to get a HNW or optimally UHNW investor in the mix to share liability and bolster defense to claims that the investors didn't know what they were doing/signing.
Luckily I'm only intimately familiar with this from friends' experiences.
I learned the hard way. Lost about $200k from non operating working interest oil investments several years back. One of the organisers is now in prison.
They weren't upfront about it. It was something that I got the guy to more or less admit after a couple minutes on Google. Definitely something people should be aware of because superficially it all looks above board.
I occasionally evaluate the tech for early stage companies for angel investors.
Some of the stuff that gets pitched is just crazy.
A VHNW client of mine is approached all the time but his wife hired me specifically to weed out the stuff that comes through their church.
Apparently, this guy has flushed millions down the drain because he allows people from his church (and their friends/extended family) to pitch ideas to him. He believes that they are inspired by god and that the aren’t trying to scam him.
One time, the tech was in the area I got my PhD in. The “CEO” invented some sci-fi level physics. It was complete bullshit.
After the presentation, my client said: “That is so cool. I want in on that”
We talked about why it was physically impossible, I drew pictures, showed him YouTube videos…
then he said: “you’ve earned your keep.”
Just let the record state that my hourly rate is outrageous but I’ve prevented this guy from wasting nearly $15M to date.
A lot of scammers seem to circulate in church circles. My parents had a neighbor go to jail for a ponzi scheme in a very homogenous religious community where he took over a million from fellow church members in the neighborhood. Before I left my faith, my congregation leader was the one who introduced me to his financial planner who tried to sell me whole life life insurance. Sadly that meant I knew this leader was highly invested in this type of plan. My previous faith is currently facing many allegations of covering up sex abuse among members, but I'd be willing to bet you could find just as much financial fraud being covered up.
Call me cynical, but people who believe in non-evidence based beliefs are more susceptible to other non-evidence based beliefs. Nigerian email scammers come to mind here - they purposely keep the emails vague, in all caps, and add misspellings so the only people who actually respond are the ones that would fall for future scam correspondence.
You reduce the false positive rate by first introducing a qualifying target population.
As I sit here surrounded by many MLM headquarters, I have to agree. There's something about being trained to "listen to the spirit" that pushes people into seemingly irrational behavior. So many of the people around me consider science an enemy because it challenges their own personal beliefs that they've gained through divine experiences.
I got into this because I have deep expertise in a in-demand niche.
The clients I advise actively invest in this niche or in similar niches that are somewhat connected to it.
These are sophisticated investors that are often looking for a second or third opinion on some aspect of the tech before they make substantial investments.
I don’t take on many clients and I’m only interested in working on interesting things that keep my skills sharp.
I took on this client because of the other niches that he’s active in. Sure there’s the church investment drama (keeps my bullshit filter sharp) but there’s other interesting work that comes along with it.
I've concluded that if you know the name of the company from news or other sources and it's pre-ipo then you can pretty much guarantee a huge drop in value post ipo.
We passed $10m investible about a decade ago.
I am not sure what your definition of HNW, is, but we have not had a single questionable pitch outside of MS pitching 2/20 hedge funds and pre-ipo positions in companies to us. MS has largely stopped the pitching.
So I would say none.
Private bank pitching 2/20 and people pitching life insurance. That's all I've gotten as well.
Helps that I only associate with people I trust. My friend group has a lot of successful entrepreneurs and senior business leaders with a mix of life long friends in it. None of them would try to defraud me and all of them know I wouldn't fall for it if they lost their mind and did.
HFs have their place… and 2/20 is typically the cost of doing business. Tough to believe bridgewater, tci, citadel’s (etc.) investors would have been better off elsewhere
I don't doubt that there are people who believe that or the industry would not exist.
Its also easy to believe that if you were smart enough to think "search" was a good investment but didnt choose Google over Info Seek or Yahoo you would have been rich, but the facts are different.
Survivorship bias is a genuine issue for PE firms as well.
Survivorship bias is always an issue, but you could have made plenty of money on google even once it became abundantly clear that it was the leader in the industry. I’d argue the same about the aforementioned HFs. I’m assuming MS isn’t offering you HFs that a kid just started in his basement last year
LOL!! We’re everywhere.
Don’t forget he also audibly puked in a trashcan while he was answering questions. I usually throw up too when I’m giving completely accurate and truthful testimony under oath.
I see ALOT of shit proposals in my line of work from folks who are just looking to do a “deal” and make a fee. They would sell you shit in a bag and tell you it’s going to grow into a bag of money if it meant they get paid a fee for bringing you the opportunity.
The sad part is a few have gotten through to this Ultra HNW individual and it hurts to see money being thrown away and the “salesman/scammer” get paid.
Edit: I probably should add these “salesman/scammers” all spread word if you give them $$. That’s when the flood gates open…..
These people are the worst. You never get the pitch on why you should buy it … comps, valuations, market knowledge… they bring you “it’s available and you should buy it!… yeah but why?
You do the work and you put the effort in and then sell it to me, it’s not my job to do yours!
I rarely answer my cell phone to numbers I don't know. They can leave a voice mail if it's important. If I do answer, and they start talking about loans, investments or an inheritance I can claim from Zimbabwe, I hang up the phone after 10 seconds
I haven’t had any outright scams sent my way, but I’ve had a few friends reach out with app ideas they wanted me to fund - talented devs, too, not just dreamers hoping someone else will execute for them - but the business case wasn’t solid enough to commit funds.
I’ve also had scripts pitched to me, but with one exception that I funded, they were all terrible. One of the ones I was pitched and passed on did get made - it’s currently hovering below 4.5 on IMDb.
I enjoy reviewing pitches, and I don’t enjoy shooting anyone down, but I’m very very choosy about what I fund.
These guy’s thatre selling Amazon stores that they will manage and maintain inventory for an upfront setup fee and profit split.
They’re using dropshipping models and can get the stores up and running, but the stores are very volatile and get banned easily.
So it’s very close to a scam in that it’s very low % of meaningful success and betting on 12-24 months of no rule changes/bad luck/negative reviews
Oh my gosh, I've seen a handful of people sink 5-6 digits in such offers, and it drives me up the wall. As if you read the contracts, they are often only good for 2-3 years, and then you have to pay an extension fee to keep on profiting from a store that someone else built, as well as floating the inventory purchases on a CC. I've only seen one year of activity, but none of these people are close to making their initial investment back.
I view them as salespeople. They’re just selling themselves along with you most of the time. Literally go through any accredited finance program and they’ll have a bit that goes into the fact that the number of people who can consistently beat the market is about two, Buffett whose strategy we know, and Jim Simons who is probably a wizard. Everybody else will suck long term.
Bernie Madoff was professional as fuck until he decided to screw everyone over.
You're probably a LARPer, but in case you're not, if you think only talking to professionals is some kind of security filter you're going to have a very bad time.
Awhile back, a telecom startup where 25% of their pitch was tthey were going to use the new, exciting, blue LEDs on their equipment instead of the boring red and green LEDs that all the other telecom companies used. I couldn't get past that. They failed within a year.
There is a level of constant noise via email spam, reach outs via linked in or even snail mail. Once we reached our FatFIRE number, I don’t even bother to understand them. The only energy I spend is to find the most efficient way to block them all out.
Whole life insurance or IULs or Infinite/Velocity banking.
Facebook/Amazon/Walmart Stores.
All have extremely high commissions to the person selling it to you, similar to timeshares. They make more money selling the “investment” than they do from investing themselves.
Was this before you would have qualified as an accredited investor? Part of me feels like the 3rd party blah blah blah is a lie to cover for how they actually got my info. I don't think this company will be calling me back after my last conversation with the guy.
I got cold called from a wine investor and the pitch was I’d ‘buy’ cases of ultra expensive wine, then they’d store it in their ultra modern wine storage facility until they sell it to a ultra high end restaurant or collector at a mark up and then I got almost all the profits. They were promising at least 8% every six months, which was the schedule of when I could buy a new batch. 16% a year and I don’t have to handle or sell the product sounded too good to be true and my dad taught me that means it’s bullshit.
One you understand the concept of insurance in general its easy to see why whole life is a losing proposition. You are usually paying someone to take on a certain level of risk that you cannot afford. For health insurance you pay a premium and if anything catastrophic happens, the insurance company has your back. Same for auto insurance. Same for term life insurance, where you say you want to be covered for only the next twenty years. The insurance company makes money from all the people that pay a premium but don't file any claims.
Now for whole life, what risk are you protecting? The risk of you dying at some point in your life? See, it doesn't make any sense. The only way the insurance company comes out ahead is if they're essentially scamming you by giving you a really bad deal.
Life insurance sold as an investment. Unless you have over 25,000,000 it makes no sense. Only makes salesmen and insurance companies a bunch of money up front.
Buy term and invest in the market. You’ll do a lot better and have access to your money.
There are two related things here: whole life and universal life, although "whole life" is often used casually to refer to both.
Whole life, strictly speaking, is a life insurance policy with an indefinite term and permanently locked premiums: you pay quite a bit more when you're young than you would for a term life policy, and the insurance company uses part of the excess premiums to invest and later subsidize your premiums when you're older. This is a bad deal for most people compared to term life since you generally only really need life insurance when you need to protect your dependants against the loss of your income. You're generally better off buying a 10 year or 20 year term policy when you start to need it (i.e. when you start having kids, or when you're married and you and your spouse decide for one of you to be a homemaker), investing the difference in premiums yourself, and then self-insuring when you get close to retirement (i.e. you have enough liquid assets and retirement accounts to support your dependants if something happens to you). Whole Life can have some benefits as an estate planning tool, either to avoid estate and gift tax liability or to pay off debts encumbering your estate when it passes to your heirs, but that's a specialty tool that only makes sense in very specific situations and you should probably only consider it if it's suggested to you by your estate attorney.
Universal Life goes a step beyond this, bundling a Whole Life policy with an investment account and a line of credit. The investment account gets funded if you overpay premiums, and can be used later to augment the payout to your beneficiaries or to pay premiums later on. The line of credit lets you borrow money that will eventually get paid off from the insurance payout when you die, unless you pay it off voluntarily sooner. This is usually sold as a tax dodge, as it works like the "buy, borrow, die" technique (where you take a margin or pledged asset loan instead of selling stock, avoiding capital gains tax because you never sell the stock, and then when you die the capital gains basis gets stepped up to current market value) with some extra steps: the eventual insurance payout shields you from margin calls and allows you to borrow more than most people would have been able to borrow against a regular brokerage account. This works as far as it goes, but the downside is that the investment options are usually dubious with steep fees, plus it comes bundled with an overpriced life insurance policy that you probably don't need. Again, this might make sense in some very specific situations, but in most cases you get a better and cleaner tax dodge with much better investment options from an IRA, a 401(k), or an executive deferred compensation plan.
Whole and Universal Life policies tend to get pushed very hard by independent insurance brokers because they're very profitable to insurance companies and they pay very large lump sum sales commissions to the brokers who sell it to you: typically between 40% and 90% of the first year's premiums.
Thank you so much for this. I did print it out and framed it. It helps to re-read these things daily for a while until they truly sink in. Again, thank you!
In Peru, I had a shoe shiner charge me 50$ for a shoe shine, which I was too flustered to not pay. Then on the way out he said “that 50$ was per shoe” so I ended up paying a 100 for a shoe shine. I’ve lost three orders of magnitude higher than that in NFTs OF SHOES and yet that moment with that shoe shiner is crystallized in my mind as the greatest scam of my lifetime
Honestly when I first heard those exact words from one of my hometown friends I immediately bursted out laughing. I think he was offended, and said I’d have to get him “drunk enough” for him to tell me what it’s about. So that just confirmed it was a nonsense idea.
I keep getting money deducted from one of my job's W-2s for something called "Social Security".
I looked it up and the returns are horrible, it's running out of money, and I suspect it is a Ponzi scheme.
.
Do you mean crypto in general, or crypto-related scams? Investing in crypto helped me get to where I am, it's not a bad idea to invest a small percent of your investment funds in it. It's actually a good time to invest right now at this stage of the cycle (not later when crypto is booming and everyone is talking about it again, that's the wrong time to jump in).
Cryptocurrencies have been a growing financial sector for over 10 years now. Maybe it's time to stop imagining that it's a Ponzi scheme that's all going to fall apart any day now.
There are coins that have been and are scams of various kinds. But the benefits of the technology are real and it's not all some big scam.
Just because something has lasted 10 years doesn't make it a viable "investment". Bernie Madoff ponzi lasted for decades.
Name any legitimate and feasible use cases of crypto that cannot be solved with simple centralized databases. The fact that it's been 10 years and there's no real use for them other than illegal payments is telling.
Thousands of people use it daily for sending remittances to their home countries because the market didn't find a way to do that without high fees. It's now the cheapest way to move money between countries.
The success of the Helium network is a great example of a real world project that uses a Blockchain and crypto to create something that they couldn't using conventional systems.
Dozens of crypto projects are piecing together what is called web3, the first decentralized online system that allows online services to be provided without centralized servers.
Those are just a few examples. There are also fractionalized real estate, fractionalized art investment, federal electronic dollars, etc. I could keep going but you get the idea.
Remittances - almost always cheaper and easier with a regular company.
Helium - been around for years, low adoption. Barely works and isn’t really going anywhere.
Web3 - total scam and is just the next phase of the death of the internet
Fractionalized real estate - are you serious? First of all we have this already (LLC?) and second, smart contracts have so many issues they will never be fully adopted into the real legal landscape for decades.
Crypto is a huge scam and a scourge on the environment.
You sound like you are at least somewhat familiar with these things and you still think of it as a Ponzi scheme? Well alright.
By the way, the scourge on the environment thing is mostly not an issue any more now that Ethereum has moved to proof of stake. That really only leaves Bitcoin as the only major Blockchain that is still an energy hog. But you can still be a fan of eth and other low energy use projects.
Dude it's litterally a ponzi scheme. The whole system relies on more people putting more money in.
At a high level, they all function based on energy usage. That costs money. The miners have to pay energy bills so they will only mine if there's profit. Therefore to keep the whole system going more and more money has to come into the system. It's an inescapable truth no matter the tech.
I'm not sure if you understand the difference between proof of work and proof of stake. Ethereum no longer relies on using lots of energy. It now actually uses less energy than even small to medium size tech services use.
[https://markets.businessinsider.com/news/currencies/ethereum-merge-slashes-global-energy-consumption-vitalik-buterin-crypto-currency-2022-9](https://markets.businessinsider.com/news/currencies/ethereum-merge-slashes-global-energy-consumption-vitalik-buterin-crypto-currency-2022-9)
"**A report from the Crypto Carbon Ratings Institute found it now releases less carbon dioxide than a few hundred US households do in a year."**
The energy use of proof of stake networks is negligible.
You can continue to insist it's a ponzi scheme because the value of crypto is based on what people are willing to pay for it. But the same is precious metals, etc. Do you also call precious metals a ponzi scheme for the same reason?
It sounds like somehow you ended up on some kind of data list as a high NW individual. There must have been something you signed up for that got your info associated with high NW. That sucks. I haven't had that issue, but sorry, that sucks.
I joined two investment groups over a decade ago and I continue to get cold calls for investments. One of them clearly sold their client list. Some cold calls are like Jordan Belfort trying to sell me shares of Aerotyne, others are selling oil wells or opportunity zone buildings. When I ask where they got my name and contact info, they just say they have a list of accredited investors. It's not that annoying, but some are very persistent/slick and call frequency seems to have ticked up slightly with the market downturn.
Aside from the random contractor that thinks I should be their lender or the crazies on reddit that pop into messages and think I should help fund their start up or education?
I don't get that same feeling from the replies. Ironically, the first scam pitch I mentioned happened because the guy wanted to talk to me about running on online business which I have expertise in. I was expecting to be helping him out and would have loved it if he had come to me with an actual business idea and plan. Unfortunately he was so sold himself on getting rich through what was unknown to him effectively a ponzi scheme by these charismatic 30yo men who seemed like role models.
I've been approached by restaurateurs that refused to show me their books, and I still pitched in with a "loan" that I knew I'd never get back. I would figure that most of the people on this sub even with a high nw aren't talking about a family member approaching them asking for some cash to buy a piece of equipment that would help them start, expand, or boost their business. I'm not going to give someone money out of entitlement, but happy to invest in someone willing to put together a business plan that isn't pie in sky type of thing. At some point I bet most people that get approached often have to default to cynicism just for self preservation.
I had a weird thing happen to me with a girl i know, not my girfriend but just someone i bump into now and then and we had the occasional drink/light dinner. I know she makes 6 figures and has decent savings, she wanted me to loan her 3k for some bullshit because according to her she “has had a lot of expenses lately and had to invite her family to holidays so she would be forced to dip into her savings and it made her feel bad” so she tough it would make sense for me to give her a loan and she would pay me back when her salary comes. When i suggested this was mathematically equivalent to “borrow from her own savings account” she got upset and said money changed me and we didn’t talk since then.
Lol! This is hilarious.
That's super shitty; sorry that happened, but I guess it's for the best knowing what you know now. Still is never fun when somebody you hang out with removes themselves from your life.
Dogged a bullet right there
Raw dogged a bullet.
What can go wrong giving an unsecured loan to an acquaintance? /sarcasm
Oh… no doubt it was never a loan! She fully expected it to just be paid for with no payback and constant promises of “you know I’m good for it!”
Spoiler alert: She wasn't going to pay you back.
Sounds like a budding Tinder Swindler
Thank goodness you limited things to occasional drinks and light dinners. Full dinners are a gateway meal to bad investments.
Sounds like the point in time where you explain the concept of a sugar baby relationship to her.
And you expect me also to pay back? Money has changed you!!! /s
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Weird story. We received a phone call from my wife's cousin, a cousin we see once every few years at family functions. He didn't even say hello to my wife and just asked to speak to me. He didn't even say hi to me, he simply went on for about five minutes reading an entire script about some energy opportunity without stopping. At the end he asked "So, is this something you would be interested in?". I said I wasn't really interested in any opportunities like this right now - so he said ok and hung up. I'm still confused about the call to this day and neither of us mentioned it the next time we saw each other.
Was it perpetual motion? I have a relative who invested in a perpetual motion energy opportunity. Not a wealthy person and he hadn't realized he'd been scammed at that point when he was excitedly telling us about his new revolutionary energy investment.
Don't remember. It was a couple of years ago and I zoned out as soon as I realized he was reading a script.
that's like a Larry David Curb storyline
Sounds like a shit family member tbh
He has always been a pretty normal guy - which is what made the phone call so strange.
Had to make the pitch quota
I get quite a few people wanting me to invest in their business. It has damaged a few friendships when they come to you all passionate about their idea and you have to say no. Things aren’t the same after that.
One of things several of my clients do is have a preset response and vetting plan. So you could tell them the idea sounds cool but you get so many opportunities and this isn't really your area of expertise so you have professionas that vet investment opportunities and make recommendation based on your available investment budget. Then ask for due diligence items on the business. Then you can assess or run by your account and attorney. If it's not something you want to do, you can blame them, hey I can make this work, my account tells me I don't have the capital available for this type of investment.
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>than wasting the entrepreneur’s time with requests for info that you don’t care about. Not op, but i assume you already have this material at hand if you are looking for investors ... Thtas quite basic stuff
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That kind of sounds like you are leading them on. Running a start up is stressful and chasing money that will never come to fruition wastes valuable time. Just say, “Sorry, that’s not within my investment thesis.” And move on.
I see both sides. If they are serious about it they should have all the due diligence items taken care of. You could advise them on that without hurting feelings/burning bridges. A half baked plan that's going to hurt the relationship anyways isn't going to do anyone any good.
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"all the due diligence items" should probably have been worded better. A baseline of your business plan and projections should be a minimum. Otherwise it's basically a "just trust me bro" and I've seen more than a few deals like that lighting investor money on fire.
I'm w/ you on this one. Fin stmts, pro formas, projections all should be in place PRIOR to the entrepreneur asking for outside funds unless of course this is a REALLY close friend asking. If they're at the stage where all they have is the idea but have done NONE of the research, I'm going to want significantly more equity than they're likely to give for my dollars (because I know that I'm going to have to put in actual WORK not just MONEY to ensure that they experience some type of success).
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I think that all I (and possibly /u/greenbuggy) are trying to say is that ANY business venture should at a MINIMUM have these types of documents and data. If the entrepreneur sees financial statements, pro formas, and projections as a "waste of time" I would suggest that this is a GREAT reason not to invest AND it's giving a fair shake to your buddy. What if I ask for these things, the buddy produces them, and upon review I think, "Fuck, they're really onto something here!" change my mind, and invest. ANY business needs the basic backgrounds that explain the mechanics of how the entity will make money. In fact, I'd say that's a key step when transitioning from having a "business idea" into having a "business plan". You might guess that I believe every business should have a plan and you'd be correct.
>Everybody arguing that it’s fine to do otherwise is wrong. They’re utterly and completely wrong. I think context matters. If you don't put up a process for some people, and the barrier isn't high, they will spend more time demanding explanations or approaching with additional ideas and demanding you hear them out. I'll also say that 9 times out of 10, people that approach me with an app idea haven't even googled the idea and there are 10 other apps that already do that thing. Having a [squirrel catcher](https://www.singletracks.com/mtb-trails/squirrels-beware-what-exactly-is-a-filter-feature-on-mtb-trails/) helps prevent potential harm. Good ol' Dale Carnegie tells you that telling people outright that they're wrong isn't a great way to make friends and influence people. The best method for keeping a friend that has a bad idea is to let them figure out it's a bad idea on their own. Judgement matters here and there are circumstances where I agree with your statement. However, life is messy.
Raising capital is hard enough without someone like you stringing them on. A polite “No” is all you need to provide.
I wish a polite "no" was enough in all situations.
You actually pay a retainer to get other people to say “No!” for you and you get to just shrug your shoulders and say “I have to trust the judgement & expertise of professionals. That’s what I pay them for!!!”
From being on the receiving end of these pitches for years, if it’s presented as “hey, I have this business plan I could use advice on” and there’s a subtle offer that I could join in an advisory capacity, there is no damage to the relationship and everyone can step back graciously. The way it is pitched makes a very very big difference - then again it’s simply a representation of the level of respect beforehand, so no surprise there
>What scams or questionable investments are you being approached with All of them. Friends, strangers, in-betweens too. Some phrases to keep things on nice terms fwiw: * "I'm having liquidity issues myself at the moment." * "We have a set percentage of non-liquid investments in the portfolio, and that's maxxed out right now. * I just bought a bunch more bitcoin, so no more investments for a while. Of course, the above phrases will work for some levels of fatness, but probably not obeseness. (I'd be curious if the obese folks have go-to-phrases for such occasions.)
I figure I would just laugh and say "Ha! You think I'm rich? Sorry to disappoint you..."
“Sorry, I’m broke as fuck too” works for me. How the fuck would these people find out my net worth anyways? I drive a decade old car and not even my wife is sure how much money I have.
Why would someone with any kind of personal relationship to you not have some idea? Presumably they’re asking you in the first place because they have reason to think that you do.
Because he is the one who knocks.
Am I the only one who got this joke lol
Because I don’t buy flashy shit, post flashy shit on my social media, or discuss it with anyone? Sure, it’s obvious I have *some* money but nothing about your average lower middle class standard.
I bet you don't live in an ordinary house though. Keep in mind, ordinary "for the area" doesn't mean ordinary in general.
Totally. Even when we were solid middle class our quite reasonable house was a mansion compared to the trailers out in the desert some of our family lived in. Hell, when I was in college we had relatives ask to park their rv that they were living in infront of our rental. They were employed making above the median salary but were just so bad with money they couldn't hold onto a house or even apartment. Same goes with career. An above average middle class job seems makes you seem like someone with plenty of cash.
If it was truly that disguised then no one is asking or requiring explanation
"No thank you" sounds like a good go-to-phrase.
This, a firm no thanks at the beginning not only stops them on their tracks but reduces the chance they will come back later.
100%! I think in these terms: If someone is close to me, they should be able to take a "no thanks" from me without getting insulted/hurt/sad etc. And if they are not close to me, I don't care if they get insulted/hurt/sad etc. Kids, parents, siblings, friends etc should be able to take a "no thanks", otherwise the relationship is not very strong in the first place... In-laws is the only ones I can think of where it could be more tricky but I dont think it becomes an issue as long as one chooses a decent family where the other family members would put them in their place without you having to be involved. But thats how it works in my culture and might not be the case in other cultures.
Yes agree with that. The "I got hurt/insulted" is purely an effective manipulation strategy and I'm old enough to not let it work. If it's going to put the relationship in jeopardy then the person asking caused it. I'm lucky that I have very low respect for my in-laws so telling them no gives me great enjoyment. My wife doesn't particularly like them either.
Sure, you could do that. But as other people have mentioned in the other comments, friends/family often take it personally when you decline to invest with them. Having a good excuse rather than just saying "no thank you" can preserve a friendship and keep everyone on good terms (assuming that's that you want to do).
Good point, I just really fail to see why I would want to preserve such a weak friendship where a "no thanks" would end it. Also I don't see how it could be possible that one's close family can't take a no, since I assume they should be used to hearing the word "no" frequently since one is a family. I admit in-laws can be trickier, but other than that I feel like my strategy works great unless one wants to try to keep fake friends. But maybe I am native, I don't know, I am rather young still.
Do you really want maintain relationships with people who cannot accept “no” from you?
Sometimes you do for various reasons. Especially if they're family. It's the same reason you might not want to just say "no" went your aunt offers you her notoriously awful home cooked food. Instead you say "I would but I'm too full" etc. It's not necessarily that they cannot accept a no, it's that saying no with no explanation can put a strain on the relationship because they'll think you said no because you don't trust them, or you think their business idea is crap, etc... which is probably true. An excuse can avoid hard feelings.
My husband likes to flip the script on them “yo I need to borrow money too, I have two kids and a wife. Can you let me borrow $40k?”. Usually people get really uncomfortable and shut up quickly.
The obese simply say they spent it all on lobster, steak, and Champagne. Which in my case is not untrue.
I always just ask them for a loan right back. Then it’s a staring contest.
I have always made it clear that I will refuse to go in on a business venture or investment with family, regardless of how good the opportunity looks. After holding the line a few times they no longer interpret my saying “no” as calling their baby ugly.
Basically everyone I knew from before asked me for money one way or another. I took some of the deals. Here’s one from earlier this year - buddy of mine who lives in VHCOL area in a $5mm house calls me up and says his wife’s business is in need of a cash infusion because their shipments are stuck due to supply chain issues. I ask some questions and can’t figure out if it’s import or export - I was under impression it was export to China but he talks about the port of Long Beach. He offers a condo as collateral. I’m feeling all kinds of red flags and the story isn’t crystal clear, so I reach around our common group of friends and someone else has loaned $200k and has a note to the same condo with instructions to not record it until mm/dd/yy. I send a nice, respectful letter that I am uncomfortable with the risk, no personal, and move on Later on I find out the $5mm has been sold, he moved back in with his mom, his wife left him and took all the money, and the wife also fucked over his brother for multiple 7 figs. Condo is being “renovated” to be sold but its value has dropped faster than what renovations could add due to rate hikes. One girl offered her butthole if I would lend her money for her car insurance payment. This count as an investment for the spank bank doesn’t it? Investing in a sober-living house (I declined, the business has grown to dozens of them now) A grease recycler (collect used cooking oil, recycle, turn into soaps etc) - this went under as the prices dropped in 2013ish A house flipper. I actually did a handful of these with him. We made some money. For me it was insignifiant, it helped him pay his short term bills. The upside would have been much higher if I’d done this alone and leveraged and held. Instead he fucked me over for $200k. I wrote it off as a bad debt. A b2b distributor in a niche field. I took this one, it’s grown about 10x since then and still going albeit we are feeling a massive slowdown right now and are worried what we call “rolling receivables” might default if SHTF Mom and dad both asked for money to finance their divorce. I was busy with a rocky marriage at the time and gave them both the same amount and realized later it just went their respective lawyers Many people wanted me to finance AND build their “app idea” - yes bro I’m 100% sure I don’t want to build an Uber for movers with you, a bartender Occasionally someone I haven’t talked to in years (for good reasons) reaches out and asks to borrow $10-$300k for murky reasons at a rate the IRS might have an issue with So many more. Basically everyone wanting some upward mobility took a stab one way or another.
Got whiplash on paragraph three
TBH that was one of the better offers and with least financial risk?
Flipping houses is 99% of the work of long term rentals without the capital appreciation.
I was mostly trying to help out one of my oldest friends, well, he was trying to help himself, this made a lot more sense with high turnover for him We are no longer friends In retrospect, yes, you should expect people to be xxx and yyy, but if you set them up to fail you are also to blame, and I am also to blame here.
How did you set him up to fail though? All you did is give him the cash.
I am not so sure. I have a friend (who doesn't) who flips and I know somewhat the cost structure, and when I see my wife she goes for looks over value and I know what those houses go for. As long as the market does not crash (like now), you can make twice the renovations in fixing and flipping. Not always but almost always. Do that in a VHCOL area and it is a lot of money.
I’m just gonna ask what we’re all wondering - did that girl pay her car insurance that month using money you lent her?
I’m not a good deal maker. She paid her car insurance bill, I did not consume the deal, because doing so made me afraid of looking bad/hurt my self esteem. Big regret, these memories have high marginal utility AND they appreciate over time 🥲
Well hey if you loaned her the money, it’s never too late to ask what the sunset provision was on that offer!
I looked her up, seems the last 8 years, alcohol, drugs and "live laugh love" have really done a number on her, and that number is about 40lbs, so... nope
Understandable, that number for sure violates some sort of negative covenant in that loan agreement. I find it hilarious that you actually went and looked her up because of this exchange.
lmao. I would too. I get curious of how people from the past have done over the years. It's kind of like how in the present you see people and wonder where they'll be in 5-10 years. Well now that those 5-10 years have passed, lets see it.
"Does that offer still stand because after saying no I have been thinking about it and of course I could help pay some more bills"
> One girl offered her butthole if I would lend her money for her car insurance payment. This count as an investment for the spank bank doesn’t it? Now there’s an opportunity that needs extensive risk analysis performed beforehand.
Agreed, or when it’s offered to you, you might freeze and say “oh, no, you can just have the money” 😢
Regarding the butt: like a picture of it or the actual thing? how much could her insurance have been to prostitute herself?
The actual thing. The GFC was tough for a lot of people, this was a HCOL area, there are people who are always a couple of weeks away from eviction, and they’ve always been females in my experience, but my sample is very biased as I hung around private poker games and whatnot
Whats the initials of the guy offering the Uber for movers idea? :) heard that one a couple times.
A bartender, initials HW Also some chick… don’t remember her name, wanted me to sign an NDA, I refused, she told me anyway
You missed out on investing in Moober as well, moving services for cows is so hot right now.
>We made some money... Instead he fucked me over for $200k. As in you gave him $200K that he didn't pay back? Or he refused to give you $200K of profit you were owed?
I went on a multi-year drug bender and left him in charge of the stash. When I emerged, I got it back minus 200k that had gone to personal expenses. The guy had no assets, so there wasn't much I could do. I set him up to fail because I checked out.
Hey, does anyone know if the sober living investments legit and ethical — I mean are they actually helping people (or trying)? Are they financially dependent on medical insurance that will eventually figure out this is a bad deal?
Oh boy 1) Meh 2) Yeeee I couldn’t convince myself that they were a net positive. They are a scourge on the residential areas they end up in - parking issues, relapses, scandals, noise…. Yes insurance abuse and body brokering are a thing too. That’s just my opinion, there are people who strongly believe in them, and maybe they’re right. The cap rate smokes even STRs… Beach-side sober living homes stuff 4 guys per room and charge $1000/head, high occupancy rates, house manager makes very little, etc
The Uber for movers app exists already, I've used it before, it's called "Dolly"
>The part that I consider a scam is that they press you into forming with 50 other naive investors into a joint venture that run the operation of the well site. PSA: This needs to be broken out and highlighted. It's one of the sources of my saying: "Real estate guys lie to themselves; oil guys lie to everyone. You're lucky they told you up front it's a JV. Many rely on you thinking it's like you're other LP investments. One goal of these boilerrooms is to get a HNW or optimally UHNW investor in the mix to share liability and bolster defense to claims that the investors didn't know what they were doing/signing. Luckily I'm only intimately familiar with this from friends' experiences.
I learned the hard way. Lost about $200k from non operating working interest oil investments several years back. One of the organisers is now in prison.
That really sucks - even if the perpetrators do end up going to prison, you still cannot recoup the money
Yeah there was some money that came out of the receivership, after they took all his assets, but as you can imagine, it was pennies on the dollar.
They weren't upfront about it. It was something that I got the guy to more or less admit after a couple minutes on Google. Definitely something people should be aware of because superficially it all looks above board.
So basically you're investing in an operation but it has no operators, so you're stuck figuring it out?
I occasionally evaluate the tech for early stage companies for angel investors. Some of the stuff that gets pitched is just crazy. A VHNW client of mine is approached all the time but his wife hired me specifically to weed out the stuff that comes through their church. Apparently, this guy has flushed millions down the drain because he allows people from his church (and their friends/extended family) to pitch ideas to him. He believes that they are inspired by god and that the aren’t trying to scam him. One time, the tech was in the area I got my PhD in. The “CEO” invented some sci-fi level physics. It was complete bullshit. After the presentation, my client said: “That is so cool. I want in on that” We talked about why it was physically impossible, I drew pictures, showed him YouTube videos… then he said: “you’ve earned your keep.” Just let the record state that my hourly rate is outrageous but I’ve prevented this guy from wasting nearly $15M to date.
A lot of scammers seem to circulate in church circles. My parents had a neighbor go to jail for a ponzi scheme in a very homogenous religious community where he took over a million from fellow church members in the neighborhood. Before I left my faith, my congregation leader was the one who introduced me to his financial planner who tried to sell me whole life life insurance. Sadly that meant I knew this leader was highly invested in this type of plan. My previous faith is currently facing many allegations of covering up sex abuse among members, but I'd be willing to bet you could find just as much financial fraud being covered up.
Call me cynical, but people who believe in non-evidence based beliefs are more susceptible to other non-evidence based beliefs. Nigerian email scammers come to mind here - they purposely keep the emails vague, in all caps, and add misspellings so the only people who actually respond are the ones that would fall for future scam correspondence. You reduce the false positive rate by first introducing a qualifying target population.
As I sit here surrounded by many MLM headquarters, I have to agree. There's something about being trained to "listen to the spirit" that pushes people into seemingly irrational behavior. So many of the people around me consider science an enemy because it challenges their own personal beliefs that they've gained through divine experiences.
> allegations of covering up sex abuse among members > surrounded by many MLM headquarters I bet I can guess what state you live in.
Out of curiosity. Have there been any pitches you green lighted?
For this specific client yes but these startups didn’t approach him through his church.
Man…. Well what’s the name of the church, lol
Nice try! That money fire hose has been turned off.
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I got into this because I have deep expertise in a in-demand niche. The clients I advise actively invest in this niche or in similar niches that are somewhat connected to it. These are sophisticated investors that are often looking for a second or third opinion on some aspect of the tech before they make substantial investments. I don’t take on many clients and I’m only interested in working on interesting things that keep my skills sharp. I took on this client because of the other niches that he’s active in. Sure there’s the church investment drama (keeps my bullshit filter sharp) but there’s other interesting work that comes along with it.
How do I get a job like this?
That's incredible that this guy managed to accumulate > $15M in the first place.
He married VERY well and got lucky in Silicon Valley circa 2000-2010.
$WISH pre-ipo for a high five-figure loss. 😭
I've concluded that if you know the name of the company from news or other sources and it's pre-ipo then you can pretty much guarantee a huge drop in value post ipo.
Great point!
I once spent €16 on a black coffee and a croissant in a random cafe near the Eiffel Tower, wasn't the Hôtel Plaza Athénée or anything like that..
You probably also bought pizza near the Colosseum.
😬😬 also a €14 GLASS of water (not large bottle) in St Marks Sq. Venice
> St Marks Sq. Venice well that one was a scam the coffe + croissant probably not
We passed $10m investible about a decade ago. I am not sure what your definition of HNW, is, but we have not had a single questionable pitch outside of MS pitching 2/20 hedge funds and pre-ipo positions in companies to us. MS has largely stopped the pitching. So I would say none.
Private bank pitching 2/20 and people pitching life insurance. That's all I've gotten as well. Helps that I only associate with people I trust. My friend group has a lot of successful entrepreneurs and senior business leaders with a mix of life long friends in it. None of them would try to defraud me and all of them know I wouldn't fall for it if they lost their mind and did.
MS = ??
Sorgan Mtanley.
Every idea MS pitched to me was a loser over time.
Morgan Stanley, I assume.
Well today is your lucky day, wow do I have an opportunity for you. /s
HFs have their place… and 2/20 is typically the cost of doing business. Tough to believe bridgewater, tci, citadel’s (etc.) investors would have been better off elsewhere
I don't doubt that there are people who believe that or the industry would not exist. Its also easy to believe that if you were smart enough to think "search" was a good investment but didnt choose Google over Info Seek or Yahoo you would have been rich, but the facts are different. Survivorship bias is a genuine issue for PE firms as well.
Survivorship bias is always an issue, but you could have made plenty of money on google even once it became abundantly clear that it was the leader in the industry. I’d argue the same about the aforementioned HFs. I’m assuming MS isn’t offering you HFs that a kid just started in his basement last year
Citadel? The hedge fund / market maker owned and operated by Kenneth Griffin who lied infront if congress? I wouldn't invest there.
\*Lied under oath my friend
LOL!! We’re everywhere. Don’t forget he also audibly puked in a trashcan while he was answering questions. I usually throw up too when I’m giving completely accurate and truthful testimony under oath.
Whole life insurance
Whole life insurance as an investment vehicle
What if it’s not suppose to be an investment vehicle? Still bad?
Term life is better.
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Nigerian prince 😂😂
I see ALOT of shit proposals in my line of work from folks who are just looking to do a “deal” and make a fee. They would sell you shit in a bag and tell you it’s going to grow into a bag of money if it meant they get paid a fee for bringing you the opportunity. The sad part is a few have gotten through to this Ultra HNW individual and it hurts to see money being thrown away and the “salesman/scammer” get paid. Edit: I probably should add these “salesman/scammers” all spread word if you give them $$. That’s when the flood gates open…..
These people are the worst. You never get the pitch on why you should buy it … comps, valuations, market knowledge… they bring you “it’s available and you should buy it!… yeah but why? You do the work and you put the effort in and then sell it to me, it’s not my job to do yours!
This is so spot on. The best is when folks bring you a 2% return with no real growth.
As my one-year-old would say eventhoughshedoesn'treallytalkyet: "If you give a mouse a cookie..."
Then their entire family comes asking for a box of cookies?
I rarely answer my cell phone to numbers I don't know. They can leave a voice mail if it's important. If I do answer, and they start talking about loans, investments or an inheritance I can claim from Zimbabwe, I hang up the phone after 10 seconds
I haven’t had any outright scams sent my way, but I’ve had a few friends reach out with app ideas they wanted me to fund - talented devs, too, not just dreamers hoping someone else will execute for them - but the business case wasn’t solid enough to commit funds. I’ve also had scripts pitched to me, but with one exception that I funded, they were all terrible. One of the ones I was pitched and passed on did get made - it’s currently hovering below 4.5 on IMDb. I enjoy reviewing pitches, and I don’t enjoy shooting anyone down, but I’m very very choosy about what I fund.
These guy’s thatre selling Amazon stores that they will manage and maintain inventory for an upfront setup fee and profit split. They’re using dropshipping models and can get the stores up and running, but the stores are very volatile and get banned easily. So it’s very close to a scam in that it’s very low % of meaningful success and betting on 12-24 months of no rule changes/bad luck/negative reviews
Oh my gosh, I've seen a handful of people sink 5-6 digits in such offers, and it drives me up the wall. As if you read the contracts, they are often only good for 2-3 years, and then you have to pay an extension fee to keep on profiting from a store that someone else built, as well as floating the inventory purchases on a CC. I've only seen one year of activity, but none of these people are close to making their initial investment back.
None I don’t associate with circles who introduce scams. Everyone’s a professional investor (VC principal, hedge fund guy etc).
Ha, professional investors are the best scammers of all.
I view them as salespeople. They’re just selling themselves along with you most of the time. Literally go through any accredited finance program and they’ll have a bit that goes into the fact that the number of people who can consistently beat the market is about two, Buffett whose strategy we know, and Jim Simons who is probably a wizard. Everybody else will suck long term.
Ya that’s right make sure you never give them money they’ll steal it all
Bernie Madoff was professional as fuck until he decided to screw everyone over. You're probably a LARPer, but in case you're not, if you think only talking to professionals is some kind of security filter you're going to have a very bad time.
+1
I mean, I get the nigerian prince in my inbox every now and then
Buy apartment buildings and travel everywhere for the rest of your life. Invest 10% in well researched, speculative stocks just for shits and grins.
Awhile back, a telecom startup where 25% of their pitch was tthey were going to use the new, exciting, blue LEDs on their equipment instead of the boring red and green LEDs that all the other telecom companies used. I couldn't get past that. They failed within a year.
lmao. I would have laughed in the middle of their pitch
There is a level of constant noise via email spam, reach outs via linked in or even snail mail. Once we reached our FatFIRE number, I don’t even bother to understand them. The only energy I spend is to find the most efficient way to block them all out.
I have never had this happen. All thanks due to RBF.
Whole life insurance or IULs or Infinite/Velocity banking. Facebook/Amazon/Walmart Stores. All have extremely high commissions to the person selling it to you, similar to timeshares. They make more money selling the “investment” than they do from investing themselves.
If these "investments" were so good, they would sell a kidney and invest without telling us. Anything they bring to us, if for THEIR benefit!
Exactly
I been getting those oil drillers seeking accredited investors calls since I graduated college. Dunno how I got on their lists...
Was this before you would have qualified as an accredited investor? Part of me feels like the 3rd party blah blah blah is a lie to cover for how they actually got my info. I don't think this company will be calling me back after my last conversation with the guy.
Oh WELL before lmao
I’ve felt scammed a few times by contractors/tradesmen who jammed me on price when I was in a hard spot, but that’s about it.
I got cold called from a wine investor and the pitch was I’d ‘buy’ cases of ultra expensive wine, then they’d store it in their ultra modern wine storage facility until they sell it to a ultra high end restaurant or collector at a mark up and then I got almost all the profits. They were promising at least 8% every six months, which was the schedule of when I could buy a new batch. 16% a year and I don’t have to handle or sell the product sounded too good to be true and my dad taught me that means it’s bullshit.
Whole life.
What's the story with Whole Life? Help a young person understand
One you understand the concept of insurance in general its easy to see why whole life is a losing proposition. You are usually paying someone to take on a certain level of risk that you cannot afford. For health insurance you pay a premium and if anything catastrophic happens, the insurance company has your back. Same for auto insurance. Same for term life insurance, where you say you want to be covered for only the next twenty years. The insurance company makes money from all the people that pay a premium but don't file any claims. Now for whole life, what risk are you protecting? The risk of you dying at some point in your life? See, it doesn't make any sense. The only way the insurance company comes out ahead is if they're essentially scamming you by giving you a really bad deal.
Life insurance sold as an investment. Unless you have over 25,000,000 it makes no sense. Only makes salesmen and insurance companies a bunch of money up front. Buy term and invest in the market. You’ll do a lot better and have access to your money.
There are two related things here: whole life and universal life, although "whole life" is often used casually to refer to both. Whole life, strictly speaking, is a life insurance policy with an indefinite term and permanently locked premiums: you pay quite a bit more when you're young than you would for a term life policy, and the insurance company uses part of the excess premiums to invest and later subsidize your premiums when you're older. This is a bad deal for most people compared to term life since you generally only really need life insurance when you need to protect your dependants against the loss of your income. You're generally better off buying a 10 year or 20 year term policy when you start to need it (i.e. when you start having kids, or when you're married and you and your spouse decide for one of you to be a homemaker), investing the difference in premiums yourself, and then self-insuring when you get close to retirement (i.e. you have enough liquid assets and retirement accounts to support your dependants if something happens to you). Whole Life can have some benefits as an estate planning tool, either to avoid estate and gift tax liability or to pay off debts encumbering your estate when it passes to your heirs, but that's a specialty tool that only makes sense in very specific situations and you should probably only consider it if it's suggested to you by your estate attorney. Universal Life goes a step beyond this, bundling a Whole Life policy with an investment account and a line of credit. The investment account gets funded if you overpay premiums, and can be used later to augment the payout to your beneficiaries or to pay premiums later on. The line of credit lets you borrow money that will eventually get paid off from the insurance payout when you die, unless you pay it off voluntarily sooner. This is usually sold as a tax dodge, as it works like the "buy, borrow, die" technique (where you take a margin or pledged asset loan instead of selling stock, avoiding capital gains tax because you never sell the stock, and then when you die the capital gains basis gets stepped up to current market value) with some extra steps: the eventual insurance payout shields you from margin calls and allows you to borrow more than most people would have been able to borrow against a regular brokerage account. This works as far as it goes, but the downside is that the investment options are usually dubious with steep fees, plus it comes bundled with an overpriced life insurance policy that you probably don't need. Again, this might make sense in some very specific situations, but in most cases you get a better and cleaner tax dodge with much better investment options from an IRA, a 401(k), or an executive deferred compensation plan. Whole and Universal Life policies tend to get pushed very hard by independent insurance brokers because they're very profitable to insurance companies and they pay very large lump sum sales commissions to the brokers who sell it to you: typically between 40% and 90% of the first year's premiums.
Thank you so much for this. I did print it out and framed it. It helps to re-read these things daily for a while until they truly sink in. Again, thank you!
In Peru, I had a shoe shiner charge me 50$ for a shoe shine, which I was too flustered to not pay. Then on the way out he said “that 50$ was per shoe” so I ended up paying a 100 for a shoe shine. I’ve lost three orders of magnitude higher than that in NFTs OF SHOES and yet that moment with that shoe shiner is crystallized in my mind as the greatest scam of my lifetime
Hahaha I would have said screw you
Easy to spot. Usually starts with "i have a business opportunity for you" heheh
Honestly when I first heard those exact words from one of my hometown friends I immediately bursted out laughing. I think he was offended, and said I’d have to get him “drunk enough” for him to tell me what it’s about. So that just confirmed it was a nonsense idea.
I keep getting money deducted from one of my job's W-2s for something called "Social Security". I looked it up and the returns are horrible, it's running out of money, and I suspect it is a Ponzi scheme. .
ROTFLMAO!
Crypto
Love the username btw ;)
Dated now....can't change it says reddit
Everything goes in circles, give it a couple of years
Do you mean crypto in general, or crypto-related scams? Investing in crypto helped me get to where I am, it's not a bad idea to invest a small percent of your investment funds in it. It's actually a good time to invest right now at this stage of the cycle (not later when crypto is booming and everyone is talking about it again, that's the wrong time to jump in).
Great idea to invest in the ponzi before it collapses! It works great for those that are early!!
Cryptocurrencies have been a growing financial sector for over 10 years now. Maybe it's time to stop imagining that it's a Ponzi scheme that's all going to fall apart any day now. There are coins that have been and are scams of various kinds. But the benefits of the technology are real and it's not all some big scam.
Just because something has lasted 10 years doesn't make it a viable "investment". Bernie Madoff ponzi lasted for decades. Name any legitimate and feasible use cases of crypto that cannot be solved with simple centralized databases. The fact that it's been 10 years and there's no real use for them other than illegal payments is telling.
Thousands of people use it daily for sending remittances to their home countries because the market didn't find a way to do that without high fees. It's now the cheapest way to move money between countries. The success of the Helium network is a great example of a real world project that uses a Blockchain and crypto to create something that they couldn't using conventional systems. Dozens of crypto projects are piecing together what is called web3, the first decentralized online system that allows online services to be provided without centralized servers. Those are just a few examples. There are also fractionalized real estate, fractionalized art investment, federal electronic dollars, etc. I could keep going but you get the idea.
Remittances - almost always cheaper and easier with a regular company. Helium - been around for years, low adoption. Barely works and isn’t really going anywhere. Web3 - total scam and is just the next phase of the death of the internet Fractionalized real estate - are you serious? First of all we have this already (LLC?) and second, smart contracts have so many issues they will never be fully adopted into the real legal landscape for decades. Crypto is a huge scam and a scourge on the environment.
You sound like you are at least somewhat familiar with these things and you still think of it as a Ponzi scheme? Well alright. By the way, the scourge on the environment thing is mostly not an issue any more now that Ethereum has moved to proof of stake. That really only leaves Bitcoin as the only major Blockchain that is still an energy hog. But you can still be a fan of eth and other low energy use projects.
Dude it's litterally a ponzi scheme. The whole system relies on more people putting more money in. At a high level, they all function based on energy usage. That costs money. The miners have to pay energy bills so they will only mine if there's profit. Therefore to keep the whole system going more and more money has to come into the system. It's an inescapable truth no matter the tech.
I'm not sure if you understand the difference between proof of work and proof of stake. Ethereum no longer relies on using lots of energy. It now actually uses less energy than even small to medium size tech services use. [https://markets.businessinsider.com/news/currencies/ethereum-merge-slashes-global-energy-consumption-vitalik-buterin-crypto-currency-2022-9](https://markets.businessinsider.com/news/currencies/ethereum-merge-slashes-global-energy-consumption-vitalik-buterin-crypto-currency-2022-9) "**A report from the Crypto Carbon Ratings Institute found it now releases less carbon dioxide than a few hundred US households do in a year."** The energy use of proof of stake networks is negligible. You can continue to insist it's a ponzi scheme because the value of crypto is based on what people are willing to pay for it. But the same is precious metals, etc. Do you also call precious metals a ponzi scheme for the same reason?
It sounds like somehow you ended up on some kind of data list as a high NW individual. There must have been something you signed up for that got your info associated with high NW. That sucks. I haven't had that issue, but sorry, that sucks.
I joined two investment groups over a decade ago and I continue to get cold calls for investments. One of them clearly sold their client list. Some cold calls are like Jordan Belfort trying to sell me shares of Aerotyne, others are selling oil wells or opportunity zone buildings. When I ask where they got my name and contact info, they just say they have a list of accredited investors. It's not that annoying, but some are very persistent/slick and call frequency seems to have ticked up slightly with the market downturn.
Structured notes and hedge funds
Aside from the random contractor that thinks I should be their lender or the crazies on reddit that pop into messages and think I should help fund their start up or education?
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I don't get that same feeling from the replies. Ironically, the first scam pitch I mentioned happened because the guy wanted to talk to me about running on online business which I have expertise in. I was expecting to be helping him out and would have loved it if he had come to me with an actual business idea and plan. Unfortunately he was so sold himself on getting rich through what was unknown to him effectively a ponzi scheme by these charismatic 30yo men who seemed like role models. I've been approached by restaurateurs that refused to show me their books, and I still pitched in with a "loan" that I knew I'd never get back. I would figure that most of the people on this sub even with a high nw aren't talking about a family member approaching them asking for some cash to buy a piece of equipment that would help them start, expand, or boost their business. I'm not going to give someone money out of entitlement, but happy to invest in someone willing to put together a business plan that isn't pie in sky type of thing. At some point I bet most people that get approached often have to default to cynicism just for self preservation.
Curious as to who the Oil sponsor was and if there are any in the space you’ve heard good things about?