Category: Wealth

“Blame Canada.” – The South Park Movie

Please help stop the senseless slaughter of Canadians that voluntarily give their lives so your pancakes can be tasty!  I sent them $20 real dollars, not those Canadian ones.  Or . . . could this be a scam?

Last Wednesday we discussed scams that you’ll run into at different ages.  We made it from birth to age 22 and listed some of the scams that you’ll be exposed to (Scams and Cons at Any Age, Part I, as told by Admiral Ackbar).  Today we’ll keep going, and if you don’t find the information useful, I promise a full refund of all money that you’ve paid directly to me to read this blog (note to self:  when I edit this stuff into a book remember to edit that last sentence out).

Early Career:

You’ve graduated from college, or have opened a small but successful business, or you’re pursuing a trade like welding and you’re 24.  Life is wide open!  You’ve successfully avoided college debt through one way or another, or maybe you have a modest debt that you can repay without too much difficulty every month.

Let’s go get scammed!

The easiest way to get legally scammed is your choice of partner.  If you’re with a bad one, you’re going to end up paying for it for (potentially) decades.  If your spouse is particularly unemployable and you are really employable, some states (the Internet in 2018 says Connecticut, Florida, New Jersey, North Carolina, Oregon, and West Virginia) allow for lifetime alimony.  So, if you have the bad sense to marry a gold digger?  It will outlive the cat and could last as long as that herpes he or she brought home.

How birth works in Canada.  Since all children are socialist and owned by the government, it’s okay if you pick up several that aren’t yours to raise if you live in Canada.

Another way (men only) you can get scammed is through paternity.  Yes, you can be found legally liable to raise Some Other Dude’s Kid (SODK) if your blushing bride is a wanderin’ if you’re married when she gives birth and you claim the kid, or don’t object within some arbitrarily short period of time.  And lets’ face it, babies all sort of look the same, so the chances of you missing that deadline are pretty significant.  In the worst case scenario, you end up paying child support and alimony when your wife starts shacking up with the Some Other Dude.  Yeah, I don’t personally know anyone this happened to, but I’ve read about several cases.  And this is perfectly legal in every state.

Thank heaven you’re not French – they explicitly have outlawed paternity testing so it is illegal to check to make sure your mademoiselle hasn’t taken to the boudoir with some other Pierre.   But that’s okay, being a father is just a social construct, right?

The easy way to get to work in Canada isn’t by mass transit, it’s by moose transit.

The next big scam is car purchasing.  I’ve written at length about my philosophy on car purchasing.  You can find some representative posts here plus results of my bad experiences.  Give them a read – they will save you thousands of dollars . . .

Repeat After Me: Never Buy a New Car (and other lessons for young adults)

“Wreck. Big wreck.” – Long, Sixteen Candles

Will you buy a Tesla™ 3?  You already have.

I’m gonna tell you about an accident, and I don’t wanna hear “act of God.” – Jack Burton, Big Trouble in Little China

Outside of bad relationships, I think new cars are the biggest scam that a young early career person faces.  What kind of a bargain is a vehicle that you drive off the lot that immediately becomes less valuable?

And if you’re reading this blog, the chances of you falling for a Nigerian-Prince level scam are nearly zero.  The writers of those scams specifically put misspellings into the emails so that smart people ignore them – the laughable quality and easy verification that the scam is a lie the point of the scam in the first place.  The last thing the scammers want is a smart person to deal with – the email itself is an IQ test.  Only the scammable need apply.

As it is, the “Nigerian-Prince” scam accounts for 48% of Nigeria’s gross domestic product.  And I hope you didn’t fall for that fact that I just made up on the spot – ha, I bet you believe that there’s an actual Nigeria now.  Ha!  But THEREZ GOOD newS, I have SUM OF $48 MILLION USD that UNKLE BRADLEE left in trust for me and YOU ONLIE NEED TO PROVIDEE your bank account routing information for me to wire it 2 u.

Middle to Late Career:

You’ve reached your peak earning potential.  You’ve been scammed a few times, like me, most of them completely legal versions.  For the most part, you’re either broke or you’ve grown wary of anything that sounds too good to be true, like Social Security or that George R. R. Martin will ever finish the Game of Thrones™ series (Actual Book Series Title:  An Infinitely Long Story Consisting of People Talking in Rooms Because I Can’t Figure Out How to End It Song of Fire and Ice®) before his heart finishes him or that there’s a new version of The Gong Show™.  There is, in fact, a new version of The Gong Show® and it is fabulous.  George R.R. Martin, however, appears to be doing absolutely anything but writing.  Maybe he could be a judge on The Gong Show©?

It seems as if Dr. Phil has been busy?  I like the new Canadian flag, a LOT!

Dating scams seem to hit this group a lot.  Why?  After being married, and now being single, scammers can target the richest age group with a pretty significant emotion:  love and longing.  I’ve read on the Internets about folks spending tens to hundreds of thousands of dollars on their never met in person Internet lovers.  While some of these folks do get prosecuted, it’s pretty hard to convict them unless they’re fraudulent in a pretty flagrant manner, especially since the victim willingly sends the money, and, in some cases, tries to keep the relationship going even after the scam is exposed.  I guess true love can’t be stopped, even by borderline abusive behavior and financial fraud.  Now if the scammers are ugly . . . ?

Investment scams are also a big deal, but instead of love, they focus on greed.  A great example of this was Bernie Madoff, whose name alone shows that God has a sense of humor.  Really, you invested with a guy whose name sounds like “made off”?  Guess that explains why you dated Gina Cheatintramp in high school . . . .

But investment scams don’t have to be out and out lies and fraud – they can be more insidious.  Is your broker really working for you, or are they working to maximize their commissions?

I’d write a lot more here, but this post is already nearly at length.  Perhaps this will be a future post.  Or not.  It depends on if I think I can makes something SO BORING as fees and taxes on investment funds humorous.  Dunno.  Maybe if we represent the investment funds with swimsuit models?

Retired:

Fear is the major leverage point of scammers for older folks.  And I’ve seen it in person.  Pop Wilder became (as he grew older) grew correspondingly more fearful.

Why?  My opinion is that older folks have fewer options.  It’s not like they can decide:

“You know what?  Being old and retired sucks.  I’m going to leave it all and become an 89 year old lumberjack in Saskatchewan and start a Canadian rock band called Mötley Canüe and chase 19 year old Canadian girls.”

Pictured:  Canada.  Not Pictured:  Groupies.  I guess the concert would have gone better if we actually had instruments.  Or could sing.

So, Pop Wilder was complaining about expenses – that was his biggest complaint about retirement – his expenses went up and his income didn’t.  I was helping out financially (a little bit) and he explained that his prescription drug costs were astonishingly high.  At the time, the Internet bubble still hadn’t popped, so places like superprescriptions.com (I made this domain name up, so if you go there and are bombarded with advertisements for cheap, dodgy Chinese Viagra®, well, this is a post about getting scammed) were offering his prescription drugs for about 20% of the price as his local pharmacy.  I put together a list – his prescription bill would drop from $700 to about $150 a month.

He wouldn’t do it.  He was more afraid of changing (“what if they don’t talk to the medicine in a soothing voice each night like the local pharmacist does?”) than he was of losing $550 a month.

Imagine an alternate universe where everything is exactly the same, but Canada is spelled Cunudu.  I’d pay to live there.

But older people have another vulnerability:  the world has changed so much that their effective ignorance goes up daily – who can keep up with all of the change in the world?  And it’s started to hit me, too.  When I have a technical issue I just hand my laptop (or whatever gadget) off to The Boy or, increasingly, Pugsley, and they fix it, generally at lightning speed and with competence.  As an example of my reluctance to change technology, my phone is four years old, which might as well be a dinosaur (not a cool one, but one of the lumpy ones that lives in a swamp) compared to the newer phones on the market today.  So, I guess I’ve got a bit of that technophobic bug myself.  I even use my mobile phone for phone calls on occasion, which makes me super rare.

The only time I ever heard Pop Wilder drop the F-bomb was in conjunction with his computer:  “It doesn’t work.  It’s all f***ed up.”  The sheer frustration combined with the unexpected profanity has made this a go-to phrase for The Mrs. and I whenever some complicated thing in our house just refuses to work.

This was a regular occurrence for Pop Wilder.  I think he would (nearly monthly) take the huge, hulking tower (that the local PC people told him was the minimum system he needed to hook up to the Internet) back to their store.  They’d make some minor software changes to the Windows® settings that Pop Wilder had inadvertently messed up, and charge him $150 for dry cleaning his hard drive or lubricating his computer chip.  Every four months they’d change out some larger part for giggles.  After the computer worked again, they’d phone up Pop Wilder and he’d drive thirty miles to go and get it.  They both walked away happy.  Kinda.  Again, a scam, but a completely legal one.

Over all, I think the best advice is still this:  Be honest with yourself.  Be honest with the world.  It’s not a bullet proof way to avoid being cheated, but it’s pretty good.  But someone, somewhere, sometime is still gonna cheat you.  Legally.

I blame the Canadians.  It’s not like they’re really at fault, but they’ll still apologize.

Oh, still not a financial planner or investment dude or anything.  MAKE YOUR DECISIONS AT YOUR OWN RISK.  Really.

“It’s a trap!” – Return of the Jedi

Admiral Ackbar knows the score . . .

Con games are as old as lying, which is to say as old as people.  The “con” in con game stands for “confidence.”  The entire point of a con game is to gain the confidence of your victim or “mark” so that they don’t suspect that something is wrong.  True story:  I was at the State Fair here in Upper Lowermidwestia some years back and one of the carnival workers would try to lure people to play the carnival games by saying to passersby . . . “Hey, Mark.”  I assumed he meant Mark Twain, who had been travelling with us:

But in reality he meant me, which was good because Mark Twain is only imaginary, and I would feel pretty bad if other people saw him, too.  He was open and outgoing that I was just a mark to play his game and lose money.  I fooled him!  I played that stupid basketball game until I won the medium-sized stuffed animal.  Only cost me $75 in tickets to finally win it!

And there are plenty of other names con men call the mark (thanks to Wikipedia for a nice list):  sucker, stooge, rube, or gull (for gullible).  There are lots of other names for the con game as well, but con game or scam will work for our purposes.

The perfect con game (we’ll just use “con” as a noun from here on out) should just look like another event in the mark’s life.  Heck, it might even be something that the mark brags about.  The idea is that the mark willingly gives the con man (or grifter) his money, and then, for whatever reason, doesn’t realize he’s been cheated, or, if he does realize he’s been cheated, won’t talk to anyone about it.  In many cases the actual con game sounded much more difficult than working, and a good grifter might make even more money as a politician or salesman with poor scruples (I crossed the one out because I didn’t want to be redundant).

How do you avoid being cheated?  It’s hard.  The first concept is “you can’t cheat an honest man.”  Ideally, if you were to avoid everything you were to run across where the deal seemed too good to be true, you’d probably be able to avoid 90% plus of the scams that are out there.  The other thing is being properly skeptical of claims and looking for unbiased verification.  However, the very best scams attempt to provide you with unbiased verification in the form of biased websites, biased experts, and situations that apply pressure to make a decision . . . now.

As a rule, if I have only three hours or some other arbitrarily fixed and short timeframe to make almost any decision, the answer is “no.”  I’ve never felt bad about that . . . rule, except for the experience that made me set that rule . . . which you can read about below.

But different scams are appropriate for different ages.  I can swindle a three year old all day long, but the big problem (and the reason I don’t spend my day swindling three year olds) is that three year olds have inherently bad credit and a very limited access to large amounts of cash.  They’re certainly gullible, but they’re crappy victims.  Rule number one:  never spend time swindling the broke.  I learned that lesson only after accumulating about 5,000 drool covered Happy Meal® toys.  Stupid toddlers.

Sometimes it’s not a scam . . . 

Also, despite the jokes I might make, this is a how to NOT get swindled post.  Knowledge is power.  Or something.  Anyway . . .

Teenagers:

Teenagers are only slightly more difficult to swindle than toddlers.  They simply don’t know much.  But unlike toddlers, they think they know everything, which makes them easier to swindle.  But also like toddlers, teenagers don’t have all that much that’s worth taking.  I’d avoid cheating them – it’s really not sporting.

Here’s my story of getting grifted as a teen, from my blog post on cars (Repeat After Me: Never Buy a New Car (and other lessons for young adults)):

(Backstory:  my car was rear-ended by a drunk teen.)  The car, literally owned by me for less than two months needed a lot of repair.  I went in to find out when my car would be done.  The manager (the father of a girl that had graduated a year before me) invited me into his office.  He had a fairly long speech that he shared, indicating that he had found some cheaper parts than he had originally quoted the insurance company, and, well, my $200 deductible could go down to $40 if I only paid him in cash, right then.

I’m not sure how he knew that I had exactly (and only) $40 on me at the time, but his cash radar was perfect.  I pulled out my wallet (brown nylon with a Velcro® strip that kept it closed) and pulled out my $40 and handed it over.

I felt vaguely dirty afterward, like I’d done something wrong.  Honestly, I still fill icky about it writing this down.  The reality is that he probably just needed money his wife couldn’t track for booze or lunch and saw an 18 year old coming . . . and decided to separate me from all the cash that I had.

Yeah, not very sporting, right?  But, again, all it cost me was $40.  Much better to scam are . . .

College Age/Young Adults:

The biggest scam for many kids is college.  And it looks so legitimate.  But college is the perfect scam because it involves big money.  Tuition isn’t cheap, and is rising far faster than inflation says it should.  Beyond that, the current average grade at Harvard is an A minus.  Let that sink in.  Nothing says scam like a diploma mill, and if Harvard is a diploma mill, what chance does Lame Duck County Community College have to enforce anything resembling an academic standard?

Additionally, college has entered into the realm of “being the new high school” since employers are looking for smart employees.  College at least weeds half of the students out even with the high average grades, so it’s at least some sort of test.  It would be far cheaper for businesses and the economy as a whole if we just allowed IQ or intelligence testing of employee candidates which correlates well with not only intelligence but also with diligence.  Alas, for some reason it seems to be some sort of allowable bypass to only hire from colleges that only accept kids with great ACT or SAT scores (which are great proxies for IQ).  So, instead of an IQ test that takes half an hour or so and costs a few hundred dollars, kids now have to shell out tens of thousands to hundreds of thousands of dollars to make them candidates for top positions.  And don’t even TRY to pass the bar (outside of California) without a law degree approved by the American Bar Association . . . .

Additionally, college has the advantage of generally not being paid for by the person getting the service.  Often, it’s paid for by parents.  When it’s not, it’s often paid for by student loans.  Buy, you say:  “John Wilder, the student has to pay back the student loans.  Aren’t they responsible?”

“Nice hat,” I respond, “it must keep the sunlight off your pointy head.”  Seriously, have you ever met an 18 year old that could intellectually conceive of paying off a debt of tens of thousands of dollars over the course of a decade or more?  NO!  We don’t allow these people to drink because they’re far too stupid.  But, yet, we allow them to make decisions that essentially grind them into servitude for the Academic-Industrial Complex.  Ohh, I need to trademark that phrase.

Another way that scams get you is similar to what happened to my friend Joe – I discussed this in a blog last year (Scams, Your Momma, and Cheap Speakers)

“So, guys, the most incredible thing happened to me,” said Joe.  “I was at a Burger King® and I had just finished eating.  I was walking back out to my car, and this guy in a van stopped me.”

I think I jumped in with something to the effect that very few good things happen when a guy from a van approaches you in a Burger King™ parking lot.  Joe ignored me and continued, “He had these speakers in the back of his van.  He had dropped them off at a rental, and he had mistakenly signed two extra out.  If he took them back to the shop, they would have fired him for checking the extras out.  These are $1000 speakers! Each!

“I got them for $300 for the pair!  They sound totally awesome with my stereo!  I had to run to the bank to get the cash, but I got them!”

I smiled.

I had just read in the local newspaper that there was a scammer group operating around the metropolitan area of Moderatelylargecity, East Westeria near where we lived.  They were selling speakers worth about $50 a pair out of the back of trucks at fast food restaurants.  Cash only.

I thought to myself – “Hey, Joe likes the speakers.  He really likes them.  And if you tell him it was all a scam, he’ll hate the speakers and feel stupid.  Is it hurting anyone to let him think he got a deal?”  Joe was a nice guy, and I successfully held back my inner jerk (on that far distant morning).

So, college age kids are just coming into their prime for scams.  I’ve heard that they’ve updated the old “speakers from a van” to include websites touting the brand of speaker that they’re “selling.”  In the information age, have to be ready for the 22 year old with a smart phone.

Amazingly, I’ve only gotten 22 years into my 78 year survey of how you will be cheated during your life.  I’ll continue this topic next Wednesday.

“You had rich parents. You got to go to that expensive community college.” – South Park

If you do college right, you end up being able to travel to cool places.  Literally cool, like Alaska.  Do it wrong?  You’re stuck on some hot beach in Florida during spring break.

I’ve posted several times about college here, but mainly from the perspective of the student.  The other major perspective to catch is that of the parent – whether their child is asking only for advice (in a dream world – 18 year olds know everything so why would they ask an old person for advice?) or you are paying full tuition for them to attend Harvard®, you’re involved.  What questions should you be thinking about when they come looking for money advice?

I think the first and most important question is if your kid should go to college at all.  In 1960, it wasn’t a given that kids would go off to college.  Only one kid out of twenty would go to college and graduate with a bachelor’s degree or more.

The line goes up and to the right.  So, everyone is getting smarter because here in America EVERYONE is above average!

And, possibly, some folks weren’t going to college because they had been inappropriately excluded.  But now?  70% of high school graduates start college.  70%!

By definition, AT LEAST 20% of the people who go to college are below average in high school.  And 84% of kids now graduate from high school.  Assume the dumbest drop out (not really a good assumption, but we’ll go with it).  Let’s assume that the dumbest of the high school graduates don’t start college (again, not a good assumption, but we’ll go with it).  Still, 20% of the people starting college would then have an IQ of less than 100.

The overall college graduation rate is now 60%.  Which is ludicrous.  Even more ludicrous?  At Harvard©, more than half of the students have a GPA of 3.67 or more, meaning even at Harvard™ the challenge isn’t surviving Harvard©, it’s getting accepted.  Admittedly at Harvard the average IQ is 125 (decent), but it sounds like the grade fairy visits there often.

So, if your kid can get into Harvard™ (or Yale©) (or Stanford®) (etc.) they should go there.  If they’ve got decent study skills they’ll pass.  The reason you go to Harvard™ to learn, really, you can get just as good of an education at Iowa State© for much less money.  No, the reason you go to Harvard™ is to hang around with really, really wealthy people and make connections so that you’re hanging out with Mark Zuckerberg’s kid in 2032 or whatever.  If you’re besties with a Zuckerberg because you had a car and Daddy Mark wouldn’t buy him one so you drove him to strip clubs?  You’re set for life.  They will make sure you have an awesome career, even if it just involves hanging around with their kid driving him to strip clubs for a ludicrous salary.

Think what Mark Zuckerberg might have accomplished if only he had finished college at Harvard!

The second reason that your kid should go to college is that they’re studying some sort of real science (not a fake one like sociology or anthropology) or engineering.  You have to go to college, and since these degrees have (at least in the past) weeded out the intellectually inferior, well, they will generally lead to much higher wages.  Ditto being a doctor or nurse.  Now, as soon as we start asking how the bridge feels?  Yeah, engineering will be done for.  If we haven’t done that already.

See, this is an example of creative engineering.  I’d pay to watch people drive this . . .

But a lot of college degrees are worthless – college becomes a four (or five, or six) year day-care for those unwilling to head to real life.  And it costs and amazing amount of money for day-care.  I’d just as soon give the kid enough money and send them to France for six months, not because I like my kid, but I think that France should be inundated with mouthy self-entitled 18 year olds.  It’s my gift to them.

I used to think that all bright kids with good character should go to college.  I don’t think that anymore.  I had one kid I worked with (in a volunteer position).  I asked him what he wanted to do after he graduated high school.  He described a career option, where, as a journeyman, he could live in rural North Midwestia and still make at least $80,000 a year after five years, and probably more like $100,000 after the all the overtime that you can generally pick up is figured into this.  When he started his apprenticeship he already had competing job offers for when he graduated.

My knee-jerk reaction (programming wears off only slowly) was to tell him, “No!  Go to college!  You’re so smart!”  And if I had given that advice and he had taken it, well, when he graduated he’d have $60,000 in debt and (if he was lucky) would have to fight to get a $40,000 a year job.  His idea was way better.

So, consider, should your kid even go to college?

Let’s say that you decide it’s worth it.  College won’t be a four-year boondoggle filled with lattes and climbing walls and easy A’s – it will actually mean something.

How do you pay for it?  Do you pay for it?  Should you pay for it?

This is why I’m against government paid college.  Then you’d have to get two doctorates and dress in an outfit made of bigfoot hair and unicorn sweat to get noticed in a job interview.

Part of the reason that college becomes a long-duration fun-fest is the problem of skin in the game.  Kids are having fun at college – why would they want to end it?  The colleges are making great profit off the kids.  Why would they want to end it?  The only people who want to end it . . . are the people paying for it.

Incentives are very bad, indeed, especially if you’re the parent footing the bill for it.

I guess I have to leave it up to the parent, but there are other options (for many people) outside of paying for it or saddling your kid with a massive debt.  They could be a great athlete, and get a full scholarship.  And don’t kid yourself – some engineering and technical schools have sports teams and need people that can play reasonably well.  Not NFL® talent.  Not University of Alabama™ talent.  Just well enough to not get hurt against the smaller NCAA Division II schools they play against.

ROTC is another one.  ROTC is the Reserve Officer Training Corps.  It depends on the service, but in some cases they’ll pay for your kid’s college, train them to be a military officer, and then guarantee them a job.  The Army will be happy to take them as an active duty officer, or will offer them a slot in the Reserves.  For the Air Force?  If you’re Air Force ROTC, you’re going active duty.  The nice thing about the Army?  For one weekend a month and two weeks a year, you get your school paid for in just a few years of reserve duty.  Assume it’s four years, and that’s over a thousand dollars a day they’re paying you, and some people don’t even make that kind of money during a summer job!

Both The Boy and Pugsley are reviewing this option.  It would probably work well for both of them.

Of course, there are loans.  But these can backfire amazingly.  I was reading a few years ago about a guy who borrowed enough money to become a medical doctor.  Downside?  He owed upwards of $500,000, and wouldn’t be able to pay the loans off.

That doctor is gonna die in debt, because that’s just about the only way to avoid repaying a student loan.  Or maybe he could make friends with Warren Buffet’s kid?  Know where the strip clubs are?

Hmmm.