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Shortly after Sept. 11, 2001, I began seeing collection boxes on various store counters in my neighborhood soliciting donations for a charity called the Orphans of 9/11. Instead of dropping in my change, I called the charity to request their tax return.
Turns out that while the Orphans of 9/11 was a legitimate charity, they weren’t collecting donations in my state and didn’t use collection boxes at all. Someone had simply stolen their logo and fabricated the boxes. They’d been emptying them regularly for months, but I was the first person who attempted to verify the boxes were legitimate.
When I called my local police department to report this despicable crime, they took a report but said they didn’t have the manpower to stake out the boxes and catch the thief. Their advice: Go around my neighborhood and inform the merchants.
That’s one simple scam I’ve uncovered in my decades reporting consumer news, but I’ve seen plenty more.
Want to learn the simplest methods to rip people off, or better yet, methods to avoid becoming a victim? That’s what this week’s “Money!” podcast is about. We’re going to talk about at least six scams and how you can avoid them.
As usual, my co-host will be financial journalist Miranda Marquit. Listening in and sometimes contributing is producer and novice investor Aaron Freeman.
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Want more information? Check out these resources:
- 6 Proven Ways to Make a Dishonest Living
- 10 Golden Rules to Avoid Getting Scammed
- Investor.gov: What You Can Do to Avoid Investment Fraud
- Investor.gov: Types of Fraud
- Investopedia: 6 Ways to Avoid an Investment Ponzi Scheme
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- Miranda Marquit’s website
I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.
Computer-generated show transcript
6 Ways to Become a Successful Scam Artist
Stacy Johnson: [00:00:00] Hey guys, and welcome to the money podcast. It was just after September 11th, 2001, that I began seeing clear plexiglass collection boxes on various store counters in my neighborhood. There were soliciting donations for a charity called the orphans of nine 11, but maybe because I’m a consumer reporter, instead of just dropping in my change, like some of the other people had already done, I called the charity first.
To request their tax return. Well, it turns out that while the orphans of nine 11 was a legitimate charity, they weren’t collecting donations in my state at all. And they didn’t use collection boxes either. So someone had simply stolen their logo and fabricated those boxes. They’d been emptying them for months, but I was the first person who attempted to verify that they were actually legitimate.
Now, when I called the local cops to report this lowlife scam, they took a report, but then they said they didn’t have the manpower to stake out the boxes and catch the thief. Their advice to me was just go around your neighborhood and inform the merchants, not to use those boxes anymore. That’s one simple scam I’ve been covered in my decades reporting consumer news, but I’ve seen plenty more.
You want to learn the simplest methods to rip people off or better yet methods to avoid becoming a victim yourself? Well, that’s what this week’s money podcast is all about. We’re going to talk about at least six scams and how you can avoid them. I’m your host, Stacy Johnson. I’m here with cohost Miranda Markowitz say, hi, Miranda.
Miranda Marquit: [00:01:28] How are you doing
Stacy Johnson: [00:01:28] today? I’m fine. How about our novice investor and producer? Aaron Freeman. How are you doing today, Aaron? All
Aaron Freeman: [00:01:34] right, I’m good. I’m good. I’m good.
Stacy Johnson: [00:01:36] All right, Dan. Ready to dig into today’s topic? I am, but before we do. A quick disclaimer, should you hear the names of stocks or other investments on this podcast?
It doesn’t mean their recommendations. You never invest based solely on our advice because it may not be related. It may not relate to your situation, get your own advice, make your own decisions. Now let’s get back to the topic at hand six ways to become a successful scam artist. So I have to ask you guys, as we begin, are you tired of making an honest living?
You’re tired of working hard and not getting too much reward for it. Oh, yeah.
Aaron Freeman: [00:02:08] Yes,
Stacy Johnson: [00:02:11] yes. You ready to go? Where the easy money is because I’ve seen it?
Miranda Marquit: [00:02:15] Yeah, I think so. Yeah. I mean, yeah. I mean this whole, uh, Working hard thing is starting to be a real drag.
Aaron Freeman: [00:02:23] Yeah. Tell me Stacy, how can I
Stacy Johnson: [00:02:24] make easy money? I’m going to tell you how you can make easy money, Erin.
Thanks for asking. What’s it
Aaron Freeman: [00:02:29] cost me though. Do I have to pay you in 1995?
Stacy Johnson: [00:02:31] Yeah, that would be preferable. Yes. Um, but you know, over the years that I’ve been doing consumer reporting yeah. I have literally become discouraged several times because there are so many people stealing money and not answering for it at all.
I’ll give you, I’ll give you some examples of what we’re doing, but it really does kind of piss you off. Sometimes, you know, that I’m working hard, uh, for, for the money I make. And some people aren’t working at all. They’re stealing from other people and they’re not even getting caught. Let me give you some examples.
Let’s say that you want to start making a dishonest living. I’m going to give you six ways to do it. Number one is to be an investment guru. Now don’t let a total lack of expertise in the stock market holds you back. Guys, you can use this simple method to convince the gullible that you’re the next Warren buffet.
Number one, purchase a large list of likely investors. You can buy email lists. Now divide them into groups. Number two, send a different stock idea to each group. Didn’t matter what stock is. Use a dartboard to pick the stock. Doesn’t matter at all. Number three, wait a few weeks, throw out the group that received a losing recommendation.
Send an additional pick to those who got a winner. Number four, repeat this process and to what remains is a group of people that you’ve supplied with three or more consecutive winners, number five, offer them the opportunity to harness your super secret proven investment method for a mere $199 a month.
See how that works. Um, Nope. I’m a little lost. Okay. Get a list of people. Right on my list of people, email address. Okay. You got an email address for email, just for all. Again, let’s say you get a million email addresses. Okay. Divide it in half, send 500,000 people, a stock idea. Send another 5,000 another stock at you.
If there’s, if the stock goes down, throw those people away. If the stock goes up, keep those people, send them another stock idea. Same process. If that stock goes up. Now you’ve got a group of people. You said two good ideas to throw away the ones that get a bad idea. Okay. Now it’s all coming together. All right.
You keep doing that until you send somebody three or four. Good picks. Now they’re going to think you’re a genius. They don’t realize you’ve been throwing away all the ones. You said bad picks too. And they’re going to pay you money because you’re going to promise them those kinds of returns. And it’s just that easy now.
So now you can be an investment scam artist, you know, and by the way, if that’s too much hassle, don’t worry about it. Just run as promising a 50% return. Now your victims obviously should be worried about that after all, if you can earn 50% on your own money, why the hell would you need theirs? But don’t worry that won’t occur to them.
You just promise them something you can’t begin to deliver. They’ll send you money and you’re off to the races. You’re lying on the beach.
Miranda Marquit: [00:05:08] I do, actually, this is, I mean, I clearly been doing everything all wrong at this point in time.
Stacy Johnson: [00:05:14] And did you go to college? Why are you working for a living
Miranda Marquit: [00:05:17] Rhonda? I don’t know.
I mean, and why would I do this? Like, why am I like, Hey, make sure you’re indexing and not picking stocks. I mean, clearly I just need to be like, send me your money and I’ll just send you some information about some random stocks. I mean, clearly I’m doing it wrong.
Stacy Johnson: [00:05:36] You know what I see really, really good lucrative things ahead for you and you too.
Aaron, in fact, that’s number two, just predict a future, whether it’s love or we’d all like to know what’s going to happen next. Right? Life’s complicated. There are too many variables for anyone to rely on. We know what the future’s going to hold, but that doesn’t prevent people from everyone. From psychics to wall street, investment houses from promising you, they can predict what’s ahead and they charge money for that.
Uh, you know, maybe wall street professionals may or shouldn’t pick on them because they are at least educated guesses and they will admit that term predictions are based on events, subject to change, but psychics, psychic hotlines, fortune tellers, they operate openly without any constraints, not even illegal.
And they rake millions of dollars promising people. They know what’s going to what’s in store for them when you have no, the idea we all know, or certainly we should know the future is not knowable, but because of the desire to see what’s ahead is so great. This is an area that’s rife with promise for anyone really to convince others, they have a crystal ball.
Right. But my
Aaron Freeman: [00:06:38] aura, my son and my moon signs are all aligned.
Stacy Johnson: [00:06:41] We’ll still go. I
Aaron Freeman: [00:06:42] paid very good money for that.
Stacy Johnson: [00:06:44] I had someone come up to me on a cruise ship once and say, can I touch you? You have the most amazing aura I’ve ever seen. That’s true. Where
Aaron Freeman: [00:06:52] did they touch you?
Stacy Johnson: [00:06:54] Oh, and my wife, I was staying with a group of people.
My wife said, like, what do you mean? What about our orange? Oh, no, your is fine. But this guy he’s got a magic word. I’ve never let her forget that, by the way, that’s the only psychic I’ve ever believed in that person.
Miranda Marquit: [00:07:10] Uh, I did, um, I did a story once, um, way back, just, uh, just after the, uh, 2000. Uh, 2008 crash, 2008, 2009 crash.
And, uh, subsequent, uh, the subsequent recession. And there was an uptick in people, uh, going to psychics for money things. And so I, one of my clients actually, uh, Actually had me go to a psychic and get the money reading. So it was a really fun experience. It was a really fun experience. Um, you know, I mean, uh, it, it’s interesting.
I, I like, I find these things entertaining because it’s always interesting to me how. Great. They are about the cold reading, picking up on things and then turning around and using that, uh, to make S and then of course, the idea of making generalized things sounds specific to you. Uh it’s it’s so interesting to me.
Uh, but yeah, no, it was really interesting. Um, I was of course promised that things would work out well for me financially, and that my then husband would find a job. And of course these things all happened. Eventually, you know, you know,
Stacy Johnson: [00:08:28] even a broken clock is right. Twice a day, right?
Miranda Marquit: [00:08:30] Oh yeah. Oh yeah. So, uh, but it was, but it was interesting.
Stacy Johnson: [00:08:35] yeah. So, okay. Number three, start a nonprofit, whether it’s children or dolphins, if you show people pictures of animal animals, or mammals of any kind in distress, they’re going to hand you some money. Inexplicably, they’ll do this without taking a few seconds to check out. Non-profits like destroyed has told you at the beginning of this podcast, you can go to places like guidestar.org or charity navigator and check out charities really quickly.
But most people don’t do that. And if you hate the idea of filling out the paperwork necessary to start a nonprofit, you can just fake it. Yeah. Just say you’re a nonprofit, you know, here’s, here’s a true story many years ago, uh, from, from either GuideStar or what are the other charity charity navigator? I forgot.
Anyway, they put out a list of F rated charities. Uh, they do this every year around Christmas time, you know? Cause that’s when people donate the most in any way, it just so happens that an F rated charity was located walking distance from my house here in Fort Lauderdale. I can just walk across the bridge over the intercoastal there it was.
Okay. So I go to check out this charity. Here’s what, here’s what the deal was. They sold yachts. So in other words, you donate your yacht. Now this is before now when you donate a car yacht or anything like that to a charity, they sell it. And that’s the write off that you get for whatever they get for it.
Right? So if he’s donated car, they sell the car for $10,000 in an auction, your write off is $10,000. But back in the day, you got to decide what the value of that asset was. So in other words, you donate a yacht to this charity and you say my yachts were 20 million bucks. You get a $20 million write off.
Nice. They sell the yacht and then they use that theoretically to fund a battered woman show. Okay. So here’s the deal, their income. Cause you can pull the tax returns of any charity, not, not individual people, but charities. You can, I guess I pulled their, their, um, their tax return. They brought in $23 million the year before.
Okay. They S they gave $50,000 to a women’s shelter. Out of 23 million, 21 million, they spent on marketing. Now here’s the kicker. Well, you got to, you got to get the word out. Tough. Well, here’s the kicker though, who owned the marketing company, the guy that owned the charity. So in other words, he was taking your charitable contributions, funneling them to himself in a for-profit marketing company and donating 50 grand to a women’s shelter.
Now that sounds blatantly illegal, doesn’t it? But it’s not. Nope, Nope. Illegal. I called the state attorney General’s office after I did the story, they wouldn’t talk to me. Of course. I mean, that is the charity. Wouldn’t talk to me. Um, I did a stand up outside their building, pointing at them, but they wouldn’t come and talk to me anyway.
So I called the state attorney general and I said, look at this, their tax returns right there. So nine 90 is what it’s called. You can read it yourself. And they were like, well, sorry, but first of all, I’m not even sure anything’s illegal. Any bit of it is. We’ve got more things to do than us. You see what I mean?
When I started this by saying sometimes you gotta wonder what the hell you’re doing, working for an honest living. It’s just amazing. That’s an awesome story. Yeah. A lot of stories like this, because I’ve been doing this a really long time. Let’s go to number four. If you haven’t heard anything that you liked so far, how about number four?
Offer simple solutions to complex problems. When it comes to losing weight, getting rich, any number of things, finding love. A lot of people are so desperate. They want to, they want gain without pain. I did my first news story on weight loss products. I don’t know. We lived in Cincinnati, maybe it was 25 years ago.
The subject was fat burning pants. So, so basically you put on these pants and you lose weight while you sleep. So what I did was I went to a, um, a doctor at a university who was specializing in weight loss research. And I don’t need her. I don’t need the script to remember exact words. In 25 years ago, there are two ways to lose weight.
He said, eat less or exercise more, but because so many people are unwilling to exert the effort to accomplish meaningful change in their lives. You can promise them just about anything, any simple solution to a complex problem, and they will bite. And th they’ll they’ll offer testimonials, which could be fake they’ll offer research would probably isn’t real either.
And you’re, and then you’re going to buy this product and people do it every single day. And I assume you would
Aaron Freeman: [00:12:55] probably treat that exactly as you do the, uh, the first one, you mentioned the investment guru, whereas, uh, you put out like a diet plan and you put the diet plan out there to bug, you know, 50 people.
Can you cut that in half 25 of them lose some weight, five didn’t and then you only show those 25 and then maybe 10 of those really, really did an amazing job. And you put those guys on TV and then you keep promoting your product.
Stacy Johnson: [00:13:22] Right. Okay, good. You absolutely could. And yeah, it’s just amazing. This stuff works.
And actually to a degree, all advertising is doing this. Like would you see a car ad and it’ll have a guy in a truck and EO, it’s basically promising that you’re going to be a rugged man. If you drive this pickup truck or, you know, any number of things, uh, a woman’s cosmetics, you know, this is basically, or toothpaste, they’re basically saying someone’s going to kiss you if you brush your teeth with this toothpaste.
So, and all it’s all advertising in a way is offering simple solutions to complex problems, but some of them are just blatantly rip offs. And that’s an example of one. Okay now, number five, cure people, cure people when they’re sick, just create a Raider product that promises a quick fix to a common illness.
Don’t worry about creating, you know, people reading the label cause they won’t. Catchy yet now in 2008, uh, we did a news story air. Did you shoot that with me? Oh, no, I didn’t know. That was for me. Anyway, in 2008, I did a TV news story on a widely advertised headache remedy called head-on. Do you remember those heads head on, put it, put it directly on your forehead on and on.
They just kept repeating that. Anyway, the idea seemed appealing. You’re rubbing a whack stick, looked like lip balm on your forehead and your headaches supposed to disappear. I saw this ad and I’m like, well, that seems stupid as hell. So I did a little, I did a little research on it now head-on was marketed as a homeopathic medicine.
Here’s what, here’s, what it helped me with. Pathic medicine is the definition. You take a curative active ingredient and you dilute it to the point where it’s almost nonexistent. So, I mean, this is literally what homeopathic medicine is.
Aaron Freeman: [00:15:06] Oh, I thought it was more, I thought it was more about like putting hot stones on your back.
Miranda Marquit: [00:15:09] no, no, no, no. That’s called relaxing for my massage. That’s called a relaxing massage
Stacy Johnson: [00:15:16] sample. Head-on head-on we had, um, let’s say let’s call it aspirin. I don’t know what it was. It was something that would actually cure a headache. Okay. But it was diluted to this extent and I’m not exaggerating now.
One eye dropper full in my swimming pool. Like 30,000 gallons with an eyedropper full of it, of an active ingredient. So first of all, it can’t work because it’s so diluted. But secondly, not only that you’re rubbing it on your skin, it’s not going to get a headache. Remi you can’t rub aspirin on your skin,
Aaron Freeman: [00:15:46] is that because, uh, they get diluted to the point where they don’t have to get FDA approval.
Stacy Johnson: [00:15:52] no it’s homeopathic medicine is just something that somebody came up with in the 18 hundreds. And some people just swear by it. So now you guys have learned what homeopathic medicine is. Okay. So now. Here’s this product now, not only was this product, this product was so, uh, advertised so heavily advertised that one major drugstore chain who we’ll we’ll we’ll go and mention, but you definitely know who they are.
Yeah, they did their own generic version of it. So I’m standing in this drug store with this product, which makes no sense whatsoever. And it costs like 7 99 and, and right next to it is a generic version, which obviously also makes no sense whatsoever. So I called the federal trade commission. And I said, how can you allow a product?
So obviously stupid to be marketed so heavily. And here’s how they responded. We generally don’t start an investigation to receive a ton of complaints. And even then the process will, the process will take years. So whoever did this, whoever did head on it, which by the way, it was a Canadian company. I, you know, I went to them and ask them for common.
Of course I didn’t get any. Um, but they, so they’re long gone. I mean, they make a hundred million dollars. So do the psychic hotlines. And by the time somebody clamps down on them, they’re in The Bahamas baby. They’re on the beach. They don’t care. Okay.
Aaron Freeman: [00:17:05] It’s capitalism, man.
Stacy Johnson: [00:17:06] Yep. I mean, that’s true now. Here’s my, my last one.
Number six. Actually, let me do this. Let me take a quick break. We’ve got to pay the bills, but we’re going to be right back. It’d be my last one then where to get some tips on how not to, how to avoid being a victim of one of these scams. We’ll be right back. Okay, here we are. Back again. I’ve got one thing left.
One way you can make a dishonest living. And this is, this is my least favorite. These are the people I really like love to hate. Let’s try kicking people while they’re down. There’s always an audience for almost anything that promises a quick fix, right? But if you really want to get people that are desperate, find people that are in trouble financially, because they’re going to turn to just about anybody for just about anything like four for your rescue debt, settlement, non-existent government grants.
All these things are targeted at people who were down on their luck because it got nothing to lose. They think they don’t, but they do. I I’ve done stories. Okay. Um, Late night infomercial, how to buy real estate, which our ex president actually did something like this. But anyway, you know, it’s, you know, I’m going to teach you how to buy houses for no money down.
You’re going to buy 10 houses, blah, blah, blah. I met a woman who bought a house. She’s living with her mom because she’d lost her own home. She’d been foreclosed on. She got her mother to mortgage her house so that she could buy another house in a different part of Florida and, you know, trade her way to fame and fortune in real estate.
And that house also went into foreclosure. So she lost her house and her mother’s house because some scumbag convinced her that he could make her rich. And these are the, these are the worst possible people, a special place in hell is reserved for people who victimize people who were already desperate and poor.
And yeah. And you would think no one could be that bad. No one could be that evil. Right. And let me tell you something, you can’t swing a dead cat without hitting somebody that evil in this world. There’s a ton of people out there like that, waiting to victimize just about anybody old people, people with Alzheimer’s, they don’t care and I’ve seen it over and over.
Do I sound like I’m mad at those people because I’m trying to, I’m really mad at him a little bit, a little bit
Aaron Freeman: [00:19:13] in here in Florida, man.
Stacy Johnson: [00:19:14] We have a lot of those people. Yup. Scumbag capital of the world. So now. I’ve told you six ways that you guys can stop working, making an honest living and start making a dishonest one.
Brenda, can you help me with some ideas on how not to become a victim of any? Yeah.
Miranda Marquit: [00:19:30] So you do have to watch out. And so, um, First of all a healthy skeptic skepticism about what’s happening here. I mean, as we found out, I mean, it’s, it’s really hard when people are like, Hey charity, this charity that. And so I’m one of the things I’ve done.
Just kind of going back to that charity thing is, I mean, I know which charities that I, um, I donate to, and that’s just kind of what I stick with, like missions that, uh ’cause. Cause like you said, you don’t know. I mean, anybody can even grab, grab the, uh, Grab the logo of a well-known and legitimate charity, toss it on something and boom.
Right. So it’s hard. Um, and I think the first thing you have to watch out for are those testimonials, right? Somebody’s saying, you know, uh, testimonies for, from strangers you see on TV, uh, even online. Reviews, you have to watch out for that because, um, you know, sometimes those are actors. Sometimes people are paid for reviews.
I know that as a writer, I have had companies come to me and say, Hey, we will pay you to write reviews that can then be posted, uh, into different places. Uh, and then there are also, uh, things like with Amazon, where if you want to be a verified purchaser, You can actually, there are companies that will, you know, pay you.
What you’ll do is you’ll buy, you’ll go through the process of buying whatever the item is, and then they will reimburse you for the cost of the item plus writing a positive review. So
Aaron Freeman: [00:21:05] that really plays on psychology. Doesn’t it? I mean, that’s what people do. I mean, if you offer a lot of fuel, you offer them the service for free.
You know, and they’re going to feel like, well, I need to say something nice. I got it for free or anything like
Stacy Johnson: [00:21:17] that, you know? Well, let me ask you the Miranda. And certainly this is a great example, and I hadn’t thought of this whole, uh, testimonial thing, uh, or reviews rather. W what if you’re looking at a product on Amazon and I go by reviews a lot.
I’m sure you guys do too. What else can we do? But if it has, what if it has 15,000 reviews and there are four stars. Is that, is that better to give you more assurance or is it, could it all be
Miranda Marquit: [00:21:41] garbage? Well, that’s the thing, right? The more reviews something has, uh, the more likely it is that, um, more of them are legitimate and I’ve written legitimate reviews for things that I really like or things that were really terrible.
Um, and the other thing I do is look for a two, one and two star reviews, see what they have to say. And it’s like, okay, this is probably the worst case scenario. Um, is this the risk I’m willing to take for this worst case scenario? So just kind of. Kind of be aware of that. If, if the, if the reviews are all glowing and fabulous, I would watch out for that, for sure.
That was the one
Aaron Freeman: [00:22:17] to step in here too. Um, YouTube is a great resource for reviews. I mean, it’s, it’s the most like the number one platform, everybody who buys a product usually will leave a review on YouTube about it.
Stacy Johnson: [00:22:32] More to, for, for, um, expensive things, which is obviously more important. And that’s where
Aaron Freeman: [00:22:36] a lot of things be.
You’d be surprised you put in that product name and you put in review an click video on your favorite search engine and you’re going to, you’re probably find somebody did a video on it. Oh, and another thing I want to say is, um, Sometimes products are made by a certain manufacturer and they’re instantly the patents are being stolen and they’re getting made in some other country.
Yeah. So, uh, make sure, cause I was actually, I saw a tool the other day. I thought, well, it’s a really cool tool. I looked at it and found out the real name of it and you go to Amazon and the tool is $10. But the original real tool is actually 199 on it. Why is there such a discrepancy here? And it
Stacy Johnson: [00:23:17] had the same branding on it.
Aaron Freeman: [00:23:19] actual tool that was being sold had no branding, but then one of the photos would have a photo of the original tool with the brand. And then I went to the website of the manufacturer. Front page of their homepage. It says be where people are trying to sell a knockoff products of our, our tool.
Stacy Johnson: [00:23:38] Wow.
And that’s a good idea too, though, just looking at price, you know, when something’s too good of a. The deal is there’s probably something wrong. Right, right. The price seemed too good to be true. Yeah. That’s good. What else?
Miranda Marquit: [00:23:51] So a watch out for, uh, for documented proof, uh, we hear that all the time. Right. Um, where they talk about like, Proof and they, um, but a lot of the time, you know, they can use Photoshop.
They can even, um, you know, do something like that. This is actually something that’s used a lot in the multi-level marketing world where people are like holding up checks for lots of money and, you know, one month’s earnings or something like
Stacy Johnson: [00:24:21] that. Yeah. Yeah. I’ve, I’ve actually done that exact thing. I mean, I had, uh, I went to one of those with a.
With a client of mine when I was a stockbroker. And, uh, the guy called me the next day, cause that was on TV. And so they wanted me to be in their downline, you know? So the guy who was speaking to this room full of people, it was maybe there was 150 people there. Um, he was showing, he held up his check and it was, you know, whatever.
To $500,000. I forgot what it was anyway. So he called me the next day and he’s like, so-and-so really wants you to be in her downline. You should consider it. I’m like, well, you know what? You just last night promise all those people in that room, 200 of them that they could make as much money as you, but you’ve got so many people in your downline to make that $500,000.
There literally are not enough people on the planet to do that. So that you’re just a liar. I’m not saying all limo them is bad, but it’s just dumb in my opinion.
Miranda Marquit: [00:25:09] And you have to watch out for guarantees. Right. They only, like a lot of people say money back guarantee, but there’s no guarantee if something disappears.
Right. So, uh, so yeah, I mean, one of the things that, um, that we, that we found that was very interesting is. Oh, my son wanted to order a 3d printer a couple of years ago and found a website that, you know, it was around Christmas time and he found a website that was offering them for like, just really discounted price, like 30 bucks.
And he was like, yeah, let’s, uh, he’s like, I want to, I want to get the 3d printer from this place. I’m like, well, I don’t know. And he’s like, but there’s a guarantee I’m like, I still don’t know. Um, paid the 30 bucks. The thing never came a couple of weeks later. Uh, you know, you wouldn’t go back to try to find that website again, gone.
So website doesn’t even exist. The guarantee was useless. Uh, we all learned a valuable lesson.
Stacy Johnson: [00:26:04] No, actually that’s a funny Miranda too, because we sell courses. We sell retirement course. We sell a course called money, made simple, you know, but point being, we have a money back guarantee. And if you don’t like this course.
You can actually still keep it, you know, really, but we’ll give your money back. No questions asked and we literally do. And it’s so frustrating because no one believes me because they’re getting ripped off so many times by people promising, you know, money back guarantee. Well, you know, but I actually am a legitimate businessman who will actually give you your money back, but it doesn’t do any good because nobody believes it.
Miranda Marquit: [00:26:36] Yeah. Well, and I think, and that’s part of the issue, right? Is it’s like, well, the guarantee, like you said is Al is only as good as the company. Right? And so you, you operate this, a trusted website it’s been around since like the nineties. And so, um, you know, it’s, it’s something, you know, you can kind of see that.
Um, so here’s where we start getting into things that sound a little bit too good. To be true. Uh, so things like, okay. Um, haste. So if people are like, this deal is only good for X amount of time, um, you know, trying to, trying to like, get you to just push into something, you know, you’re going to miss this opportunity, uh, this, this playing on this FOMO.
And so that’s pretty much, you know, forcing you into this quick decision where you’re not taking time to think about it. And like, this is your only thing. Um, So, yeah. So that’s part of the issue there. Um, especially when you’re looking at, um, a lot of these investment things, right? It’s like, oh, well, get in on the ground floor.
If you don’t do this, you’re going to miss out. You know? Um,
Stacy Johnson: [00:27:40] and when I was a stockbroker, the best salesman where people would go like this, it, the bus is leaving, get on it, don’t get on it. I don’t give it to him, but it’s leaving. And these are people who that’s how you close people. Right. And you know, my motto is this or a mantra.
Is this the faster you talk? The slower I listen. The more you push the harder it’s going to be for you to close me, because I I’m suspicious of anybody who says you better do it now, or you’ll never have another chance.
Miranda Marquit: [00:28:06] Yeah. The only thing you have to watch out for is, um, uh, P people. Um, charging you for things like, let me help you get a government grant for your small business.
Let me help you. Uh, let me help you apply for student loan, forgiveness, all of those things. Um, you know, they may not be like outright scams, but there are things that you don’t have to pay for because the information is readily available. On government websites, you can go to the sba.gov website and they will literally say the federal government does not provide grants for starting expanding businesses.
So there’s that part of it. But then if you want to get an SBA loan, you don’t actually have to have somebody else do that for you. The same as when I worked, uh, at student loan hero, uh, one of the most common things we got were people saying like, oh, should I pay somebody to help me with public service loan forgiveness?
Should I, uh, pay for somebody to help me, uh, with these teacher loan forgiveness programs? Like. All of these government programs that are forgiveness programs, um, and people would be like, you know, charging like, well, we’re going to charge you a thousand dollars. Uh, but then you’re going to get this forgiveness.
So it’s going to be worth it. And it’s like, no, you can actually do all of this without having somebody else do it for you. And you can find the information. And you don’t have to watch out that too. Another thing you have to watch out for, uh, is tax related stuff. A lot of people are like, Hey, there’s a special government tax credit.
Uh, you know, we’ll help you get it. Um, and that’s, you know, there are government tax credits, but they’re not usually special. And they, uh, so there’s a lot of stuff you really have to think about, um, before you move forward. And if somebody says, uh, they’re going to help you get something from the government, that’s a really good way to run away.
If somebody is like, you know, because either it’s fake or it’s something you can do on your own without having to
Stacy Johnson: [00:29:55] the government grants, government does not give you free money for your business period. Right. It does not happen. And I actually, not two months ago, a friend of mine is trying to start a business, sent me a text saying like, do you think it’s cutting edge companies legitimate?
They said for $2,000, they’ll help me get a a hundred thousand dollar grant from the government. And I’m like, Nope. And he was, how do you know? I mean, because I responded instantly, I said, because I know you don’t even think about it. Not possible. I don’t even have to look and oh, by the way, here’s another one too, that I’ve experienced personally several different times.
Um, credit repair, you give somebody 600 bucks. I get to fix your credit score. Well, honestly, I’ve had three different friends of mine, friends of mine. They know I’m a consumer reporter. I’ve written five books and they’re like, yo, Stacy, they say you can fix my credit. Well, Nope. Nope. They, the only thing they could do was things you could do yourself, and they’re not going to fail.
They’re not going to raise your credit score by 150 points in a week, unless they’re doing something fraudulent, like for example, um, challenging every bad mark on your credit history, which then has to be removed by the credit reporting agency. And while they investigate it. So during that time you could apply for credit because nothing bad on your history.
Well, that’s fraud, it’s illegal. Uh, and so, you know, but I’d tell people exactly what I’m talking to you now. This is wrong. It is fraud. It will not work. You will be ripped off and I’ll be damned if they don’t do it anyway.
Miranda Marquit: [00:31:18] Yeah. Yeah. I have to watch out for, um, you have to watch out for, for people who are giving you what sounds like really weird dubious advice on Tik TOK and Twitter.
One of the big things early in 2021 was a LLC Twitter LLC. Tick-tock where they were just like, here’s how I’m going to show you how to start an LLC. And then you can pay for all of your personal expenses with the LLC and not pay taxes. It’s like, no. None of this is how any of this works y’all so the only people like, I mean, you know, so, so you have to watch out for that kind of stuff.
Um, you know, when, when people, uh, you know, you kind of alluded to it in, in your section, we were talking about ways to make money fast. If somebody’s telling you. How there’s a magic formula that you can hack into to avoid paying taxes or something like that. A runaway as fast as you can. Yes,
Stacy Johnson: [00:32:17] I did this story.
Okay. 25, 28 years ago. One of the first stories I did when I moved to Cincinnati, Ohio, um, was every year stomach consumer guy. Right? So every year I’m doing the tax story, you know, I used to stand out by the mailbox at midnight, you know, and all that. Anyway. So every year I would say like, here’s some, here’s some tips, uh, you’re going to hear this, that you don’t have to pay taxes because it’s not constitutional.
Okay. So I go to the IRS. I’m like, would you comment on this? I said, Nope, tired of it. Tired of commenting on this. If you don’t pay your taxes, you’re going to go to jail period. Um, you know, cause every year some idiot puts up on the internet, you know, you don’t have to pay income taxes, it’s illegal. The government should have did it, blah, blah, blah.
And it’s all, it’s all BS. Yes. You do have to pay taxes. And if you don’t you’ll get arrested, you’ll ultimately you could go to jail. So, you know, just believe believing stuff like that. It’s nice. It’d be great. If there was some reason you didn’t have to pay taxes, some loophole, but guess what? There isn’t.
Miranda Marquit: [00:33:14] Uh, and I think one of the things to really, uh, think about too, while you’re going through here is, um, you know, uh, you can, if there’s something that doesn’t seem quite right. So, I mean, you always do that. You know, if it sounds too good to be true, it probably is. You got to trust your gut there. One of the things you can do is do a search for is.
Blah-blah-blah a rip-off or something like that. And that will help you kind of see what other people said about it. Help you find scams. I had a friend recently send me this, this deal website. That’s like ridiculous travel for, you know, like five nights in a five-star Hawaii hotel for $497. And, um, so I was like, well, I don’t know.
I mean, there are some like really good ways to like travel cheap and everything, but you start looking into it. And you realize that, okay, it may not be a complete and utter scam, but you don’t get to choose your hotel. You’re going to, you might not actually get a five star hotel. You start reading the reviews, you start reading the things.
And realize like you, you know, there are a bunch of blocked out dates. You have to, you know, make your reservations 12 months in advance. Like it’s a whole thing. And so you have to read that fine print. You have to know those terms and conditions, uh, and doing a quick search to say is something a scam can help you figure that out as
Stacy Johnson: [00:34:35] well.
And, uh, you know, I, I just thought of this, but I would bet you that the biggest rip off of the entire modern world. Is ULAs E U L is end user licensing agreements. Every single one of us has signed one of these damn things to use Facebook, to get an iPhone. And then they are 30 pages long. None of us ever read them.
And what happened? All of our personal information got harvested. And if that’s not one of the biggest rip offs in the world, I don’t know what is, I think that’s a
Miranda Marquit: [00:35:04] really good point because the idea is, is right. If something is free, you’re probably the product like, right. Like you’re, you’re being sold, your data is being sold.
Something, something that that’s valuable to you as being sold. Um, and you kind of, I mean, and we do, like you said, we all live in that. That world where it’s like, well, we want the apps. We want the connection we want to, we want the convenience. I mean, to a certain degree, it’s like, I’m not going to lie. I like the convenience of having my devices all connected.
I like having a, you know, everything up there and, um, as weird and creepy as it is sometimes to get the ads that I’m getting, sometimes the ad is like, oh yeah, that’s exactly what I need right now. As a
Stacy Johnson: [00:35:46] consumer reporter, there’s been so many times when I’ve stood on television and you’ve heard this a million times.
Every reporter at the end of their story to get your book. Be sure and read the fine print folks, you know, when you’re buying a house or when you’re getting a phone you’ll blah, blah. That’s such a cop out. Wait. No, no, one’s reading that. I mean, I actually do read the stuff when I buy a house, but most people don’t even do that.
Or, you know, a note about a car lease or, or even a cell phone contract. I don’t know what they look like now, because it’s been a long time. So I signed him up, but there’s, you know, they’re 10,000 words long and you know, nobody’s reading that and for a reporter to sit there, you know, or attorney or whoever, sit there, go be sure to read the fine print.
Well, it’s just bull. No, one’s going to do it. And, and that’s why they make them so long.
Miranda Marquit: [00:36:25] Yeah, exactly. Yeah. Nobody’s yeah. Nobody wants to read that and they do make them long and you really kind of are. Um, yeah. It’s, uh, it’s really interesting. So, yeah, but, uh, yeah, but I think in the end, you know, the best thing you can do is really kind of say, okay, this seems too good to be true.
What is it? And then kind of go from there.
Stacy Johnson: [00:36:48] Yeah. Just listen to your inner voice. You know, if you listen to your inner voice and don’t let other people try to talk you into things, which obviously is easier said than done, you’re going to be a lot better off. And, you know, can I add one more thing before we leave this topic too?
My whole life has been spent my adult life, you know, talking about debt and doing consumer news. I’m preaching to the choir almost exclusively. In other words, if you’re listening to this podcast, odds are, you know, a lot of the stuff I’m talking about, the people who let me give you an example. When I wrote life, her debt, my book, and had to get out of debt.
I have copies of it at my house and I’m handing it to all my friends. And the people who were do did not need this book at all. We’ll call the next day and they’ll go, God, that was a great book. I read two hours a week and the people who really need it, the kind of people who were paying money to have their credit score raised, never read it at all.
So a lot of we do is preach to the choir. And the reason I’m mentioning this is because if you’re, if you are listening to this podcast and if all this stuff already does ring true to you and you didn’t need to sort of help. You need to help other people because they’re not going to listen to podcasts.
The people who need this the most are going to ignore it. So you need to help that elderly person in your neighborhood or that person who thinks the world is flat. I mean, in other words, people who are not as informed as you are, are not going to listen to this podcast, they’re not going to read these articles.
So you need to help them. Because helping other people is the shortest path to heaven or Nirvana of a holler wherever you want to call it. So do your, just tell them, listen, this podcast, if you have somebody who’s about to make a stupid move or, or help them yourself, but do help them.
Aaron Freeman: [00:38:27] I want to pipe in here with, uh, I think the number one thing that scams that people need to really be diligent about is, uh, emails.
And an example would be, uh, let’s say you go to your bank all the time and you signed up for notifications from your bank. So your bank gives you an email saying, Hey, you know, letting you know this happened, uh, click here. Um, your information. A lot of it is already on the dark web and there’s a lot of bots out there in AI that can easily.
Create that same email and give you another email saying, Hey, click here to log into your bank. My advice is whatever you do, no matter what email you get, it’s great to have the email notifications. Email is awesome, but never, ever, ever click your links in the email. If you sign up for something and it says, verify your email, that’s fine.
You know, cause it just popped on. But if something’s asking you for a login. Never click
Stacy Johnson: [00:39:23] it. That’s great
Aaron Freeman: [00:39:23] advice. Always go to the source, always go to your actual website that has the HTT P S with the S of the end. Cause that means it’s a secure website. Um, and, and, and always log in that way
Stacy Johnson: [00:39:36] when in doubt scope it out.
But before we we’re, we’re running long today, but we, and we have a few questions.
Miranda Marquit: [00:39:42] All right, I’ll go ahead and start with Eddie. Eddie asks. Is there any way to find out if my ex is collecting on my social security, she is not exactly the most honest person. In the world.
Stacy Johnson: [00:39:54] That’s pretty funny actually gotten this question.
And before the answer, your question is yes, you can find out, you can just ask the social security administration. They can tell you the name of any they’re called exhilarated beneficiaries, including your ex-wife. Uh, who’s drawing her has drawn benefits on your earnings record. Now they can’t tell you if she’s applied is not drawing.
So in other words, if she’s taking some of your, if she’s. Uh, getting from money from your social security, you can find out, uh, you can find out to date. They became entitled to benefits. You can find out what the benefit they’re getting. You can find out whether their benefits have ended, but the main thing I want to tell you here is this.
It doesn’t matter. A former spouse collecting benefits on your record has no impact whatsoever on the amount of your own retirement benefit. And that’s based entirely in what you’ve earned and when you file for social security. So do not worry if your ex wife is collecting on your social security matters.
Not at all to you. That’s the main, that’s the main thing I want to tell you there also don’t you have to be married
Aaron Freeman: [00:40:51] for like 10 years before that. Yes
Stacy Johnson: [00:40:53] you do. Yes, you do. Yeah.
Miranda Marquit: [00:40:54] So I could actually, uh, you know, look at the benefits situation and then decide if I wanted to, uh, draw based on my husband’s. Uh, my ex-husband’s earnings if I wanted.
Um, and you know, it’s a, it’s a calculation that, you know, you might want to do if you are the ex uh, kind of think about that. I’m sure. By the time I get to the point of drawing social security, um, my benefits will probably be more, so I’ll probably be looking to see if he’s drawing. So it’s
Stacy Johnson: [00:41:24] natural to think that if somebody is drawing on yours, you’re going to get less.
I mean, it sounds like they’re taking out of your account, but they’re really not. They’re not, you’re not worried.
Aaron Freeman: [00:41:33] Yeah, my wife’s waiting for 10 years and she’s going to drop me. Look ahead.
Stacy Johnson: [00:41:40] What’s next. We got any more questions. Yes, we do.
Miranda Marquit: [00:41:42] This. One’s from dune. Buggy says help. My husband is going to be 71, this July and his last day of work is the end of June. We’re about $24,000 in the bank. Not making any, any interest. I keep hearing about putting our money into gold and silver to fend off inflation.
I know we don’t have much, but is this a good idea, please help also. Oh my gosh.
Stacy Johnson: [00:42:01] So, okay, so go ahead and then you see this in
Miranda Marquit: [00:42:04] yourself. Oh my gosh. Yeah. Um, so, well, first of all, um, I hope that, uh, you’ve, you’re both looking at where you, what you can draw on social security benefits. Uh, the 20 4k is probably not going to provide, um, a lot in terms of.
Of of returns. Um, I would be wary of putting something into gold and silver or something. That’s not very liquid, especially if you don’t have, um, any other liquid assets. So, I mean, I, I don’t, I don’t know much about the situation. I don’t know. Like, do you have IRA? You know, do you have like an IRA? Do you have a 401k?
Do you have a pension? You know, do you have, like, where, where are you getting your cashflow from? Uh, if it’s just the 24 K in the bank, um, and you don’t have any. Other like liquid assets to try and, you know, help help you out. Uh, it was putting something in something as illiquid, as gold and silver, uh, to fend off inflation is not, uh, really going to help a lot also.
Um, it’s worth noting that in a lot of cases, gold is not quite the, um, The hedge against inflation that many people, uh, think it is. So, um, I would consider some other options. Um, we’ll get some, you know, you’re going to need to take a step back, look at all of your sources of income from social security to any other accounts you might have.
Um, if it’s just 24 K in the bank and that’s basically your emergency fund and you have other sources of income, there’s nothing wrong with having something. In the bank, not making interest, if you know what that purpose is. And if that purpose is emergency purposes and you want to be able to access that, um, in a pinch, um, then, you know, leaving it, there might not be terrible.
So, but it really kind of depends on what else you got going on. Yeah. Well, I’m assuming
Stacy Johnson: [00:43:55] anything else going on by what they said, but I mean, the bottom line is if this is all the money you’ve got in the world, this is your emergency fund. And, and we’ve covered this topic before. I mean, unfortunately, Hey, I get it.
I’ve got a ton of money in his bank account earning nothing, but what do you know what? Oh, well, I can’t help it. I can’t expose that mechanics pose all of my savings to risk. Uh, and so, you know, it’s just, you just have to wait for interest rates to go up, but, but don’t start casting about for dumb things like gold and silver, when you’ve only got 24 grand
Miranda Marquit: [00:44:23] total.
Yeah. Yeah. It just, yeah. Yeah. You really need to look at your full financial picture and, and where, where that money is coming from, that you’re planning on using to cover your costs, your living expenses.
Stacy Johnson: [00:44:35] Yeah. Okay, last question.
Miranda Marquit: [00:44:37] All right. This is from Christine. My question is regarding cost basis methods.
I bought an ETF two different times the first time at a much lower price than the second time. Now I want to sell some isn’t it logical that I should sell off the more expensive socks first, if that is possible, is that HFO highest in first out? Um, so. Uh, yeah. So let’s go ahead and talk about that a little
Stacy Johnson: [00:45:00] bit.
Okay. That’s that’s real easy. Cause these are easy terms for me because I’m an accountant. Uh, it’s called FIFO in life of, and first out last in first out, FIFO LIFO. Um, and basically when you buy a stock, if you don’t, if you just sell. Then the IRS assumes that you’re using FIFO firsthand first out. So in, in Christine’s case, she bought a much lower price.
The first time she bought, if she just puts in an order to sell, then her broker’s firm is required to sell the first. So the first dock she bought. Now in her case that could obviously produce, uh, a higher tax burden. So what she wants to do is she wants us to do life. Oh, she wants to do last in first out the most recent purchases have few, have the less gain.
Now, one thing to remember though, well, let me finish explaining that though, if you want to do life. Oh, you can. But what you need to do, Christina, is she to call your brokerage firm. And you need to say, I need this to be designated life and they need to send you something in writing saying it’s going to be life.
Oh. So you can show that to the IRS if you need to. Okay. Now, one thing I want you to consider to the remember that you also have long-term capital gains versus short term capital gains long-term capital gains are taxed at a lower, a lower rate maximum of 20% and probably lower if you’re in a, if you’re, unless you’re in a really high tax bracket.
So you to get that long-term capital gain treatment, you’ve got to hold that stock for a year. So look at, look at the ramifications. If you have short term capital gain it’s tax at your normal income tax rate, right? You’re no more bracket. So look at your, if they’re both long-term you definitely want to do life on it, but if one of them’s long-term short-term you got to compare the tax implications of that as well.
Did that make sense? Did I explain that? Well, Miranda.
Miranda Marquit: [00:46:43] Yeah, I think so. And that’s, that’s the thing is because, uh, you’ll want to, you’ll want to talk to a tax professional or a CPA, you know, who is like Stacy, uh, before you do something like this, because you do want to make sure I’m sure it is the smaller gain.
If you have a smaller gain, that may be great, but if it’s a short-term capital gain and you end up having to pay at your marginal tax rate, you may not be saving as much. You may not be saving money, so you want to make sure. And that you also have that whole situation happening too. And thinking about that, um, and before
Stacy Johnson: [00:47:20] you move forward, cool, well done.
And that’s concludes our podcast for the day. Um, so guys, we are at a time, but we’re never out of topic. Dig a little deeper. You’re going to find links to lots more info in our show notes. Lot of the stuff we talked about is in there. And remember, if your goal is to make more, to spend less to retire rich, your online home is money talks, news.com.
And don’t forget to check out Miranda’s online home as well. That is Miranda Mark Witt, Mir Q U I T. Dot com. If you’ve got a question, comment or topic, you’d like to suggest. Tell us email said hello at money talks, news.com. Hello at money talks, news.com. One last thing. If you appreciate what we do that do something for us.
Subscribe to this podcast takes you two seconds. Really helps us though. So if you like a show us and subscribe, I’m Stacy Johnson. And I’m
Miranda Marquit: [00:48:14] Miranda, Margaret
Aaron Freeman: [00:48:15] and I’m Erin Freeman. Please send to my nonprofit.
Stacy Johnson: [00:48:19] Thanks for hanging out for this guys. We’ll see you right here. Next time. .
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