When Feeling Close Brings Bad Money Judgment
Good for you. But before you jump into a collective project, think about leaving your wallet and credit cards at home.
The article summarizes a pattern of affinity-based financial scams. It features a group of Mormons who were sucked into a scheme to broker the sale of 20,000 tons of gold from a group of Israelis to a group of Arabs.
How many different alarm bells should have sounded when this financial “plan” was presented. Let’s start with the fact that 20,000 tons of gold is more than twice the size of U.S. bullion reserves. Who has that much to sell?
Not to pick on Mormons, but it seems they have a particular affinity for being duped and then passionately defending their stupidity. Check this quote about a BYU Professor who tried to intervene:
Hill says he confronted the power of belief over reason when he learned about 12DailyPro, an Internet advertising business being pitched to students at the Mormon-affiliated university that promised returns of 44 percent in 12 days.
When he sent an e-mail warning students it was a pyramid scheme, he says he received death threats from some investors, which he reported to university security officials.
Nice. Read the entire article. You will shake your head in amazement at how trust and greed made a dangerous combination.
I remember being invited to the house of a work colleague when I was a young engineer at Motorola. I was promised information about an “exciting opportunity.” I didn’t know what that meant exactly. But this was a brilliant engineer far senior to me, and this being my first real job, I felt a pull to attend with a some of my fellow rookie engineers. Yep. It was an MLM presentation. And, no, I didn’t buy in. I excused myself in a hurry.
I still remember the guy’s name, a weird Swedish name. That experience has stuck with me for 35 years. It helped put Mr. ToughMoneyLove on a path of being a financial skeptic.
Family ties can be equally problematic. This is a recent query to Dear Amy by a teen worrying that her uncle was exploiting her broke grandmother:
I am a senior in high school, and I’ve recently learned that my uncle is taking advantage of my grandmother. He calls her constantly begging for money, and when she refuses, he continuously calls her until she picks up. Amy, my grandmother is up to her neck in debt and has nothing left to give, yet she takes out loans just for him. I’ve talked to my parents and they say not to get involved, but how can I just sit by and watch this train wreck happen? Isn’t there anything I can do?
If this “uncle” were my sibling, there would be an intervention, perhaps involving rigid objects against fragile body parts. Fortunately, I don’t have that problem. Grandma clearly was an enabler but that doesn’t excuse the uncle’s actions.
It seems that these same principles should be extended to other affinity groups as well.
Photo credit: clover_1