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Guarding Your Wealth for Senior Citizens
Easy Money! It Comes at You From Many Directions
We want to believe there is a secret shortcut to
becoming wealthy
By Jeffrey D. Voudrie, CFP
 Oct.
8, 2007 - You won’t believe it - I just found out that I am about to
receive $2,700,000.00! My family and my kids shouldn’t ever have to
worry about money again! It’s not a result of my job, but of providence.
It almost seems too good to be true…
And it is.
I opened up my email this morning to find that
there was someone needing my help to extricate money from Zimbabwe. All
I have to do is send $500 to help this poor fellow finish a business
transaction, and I’ll receive $2.7 million in return.
I laugh when I get these emails. I can’t imagine
anyone falling for this scam. Scams such as this play on our greed.
All of us dream of winning the lottery or having a
rich uncle who leaves us a fortune. We think we’re smart enough to
recognize when something is a scam, but are we really?
I’ve talked with literally thousands of investors
over the 4 years I’ve been writing this weekly column. Let me share just
a few of the stories where someone bought into something that was too
good to be true. You might be surprised to find you have, too.
I’ve been contacted twice by people believing they
were about to inherit millions of dollars as a result of an email like
the one mentioned above. In these cases, the email claimed a distant
relative’s estate had been left to them. In both situations, the ones
receiving the emails were in difficult circumstances. One was a single
mother. To both, this was their Ticket.
They were convinced that this was real. The desire
for it to be true was so strong that their judgment became clouded. As a
result, they were ready to take what little savings they had and hand it
over to a stranger.
Surely you’re smart enough to recognize an email
scam. Even if someone knew your name, how could they know your email
address? But, there are a lot of other ways that our desire to get rich
gets us into trouble. We want to believe that there is some secret
shortcut to becoming wealthy.
I’ve talked to several people in financial
difficulty because they believed that they could take the equity out of
their home, invest it and make a quick buck.
There’s the couple that borrowed all the equity out
of their home to buy a rental property. They only have about $40,000 a
year in income but the mortgage broker convinced them that they could
afford over $800,000 in mortgages.
In this case, a newer variant of a mortgage, called
an Option-ARM, was used. The mortgage had a teaser rate where the
payment was based on a 2% interest rate. They ‘trusted’ the mortgage
broker so they didn’t even bother to read the paperwork. The real estate
market was booming and they were going to hit the jackpot!
Little did they realize that each month they were
going further into debt. Their ‘teaser’ rate was short lived and their
payments suddenly increased. Their local real estate market tanked. Now
they are stuck with $470,000 invested in a rental home, mortgaged to the
hilt, when a similar new home is selling for $299,000.
How is that any different from people who believe
that they should take all of their home equity and invest it in life
insurance so they can ‘be their own banker’?
How is that any different from those who believe
they have found the ‘perfect investment’, one that guarantees they can
participate in stock market profits without any risk?
How is that any different than the people who are
buying variable annuities thinking that they are guaranteed to earn 5-7%
a year for life?
These ‘perfect investments’ can make a lot of
money. In fact they all do…for the person selling them. The mortgage
broker in the true story above made tens of thousands of dollars.
Bottom line: there aren’t any secret ways to get
rich. There aren’t any ‘perfect investments’. As those ‘rich people’
have found, it takes work - hard work - and time.
It takes living beneath your means. It takes
batting for singles and doubles instead of home runs. To avoid being a
victim, the most important thing is to realize your vulnerability and
keep up your guard.
If you have a specific question or would like more
information, give me a call toll-free at 1-877-827-1463 or you can also reach me by email at
jeff@guardingyourwealth.com.
I will answer your financial question FREE.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive that may not have appeared in
SeniorJournal.com.
Guarding Your Wealth for Seniors, on
SeniorJournal.com, is
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens.
Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to select
private clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For bookings, email
jeff@guardingyourwealth.com.
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