Get rich quick can leave baby boomers broke

Baby boomers have done one thing better than any generation before them, generated wealth. In fact, some countries are suffering because as much as 80% of the country’s wealth is in the boomer’s investment portfolios.

This makes them prime targets for any organizations that want to separate the boomer from their money.  These ’scams’ are far more savvy and intellectual that those used on the rest of us ‘mere mortals.’  In fact, many people can spend several weeks from hook to landing without a slight sniff that something rotten is in the air.

Then, nothing happens.  It can take several weeks for the boomer to realize that their money is gone.

Seminars

Of course, smart boomers are aware of the seminars that turn out to be fronts for agents who want to sell holiday clubs, property in Spain, or annuities.

The seminar hooks people by giving them exactly what they want, high returns and quick access to their money.  The seminars are not the problem, neither is the information that is offered.  The problem comes when investors are encouraged to liquidate their portfolios and invest in products that will save taxes, and offer high-yield, low risk returns. 

There is nothing wrong with this so far.  There is no law broken.  A few investors may become suspicious because the agent represents the products they are trying to ’sell.’  Unfortunately, most boomers will take it for granted that this investing ‘guru’ has cornered the market on the products that really sell.

Fees

There is always a fee for leaving the program early.  Whether it is an insurance or stock based program, the agents know that you’ll back out.  They are willing to wait five or ten years for the big payoff, and collect the fees imposed for leaving the program early.

The Set Up

These workshops or seminars rival anything planned for the big corporations CEOs.  The sales people are not hired from the classifieds.  These trained professionals have one purpose, to separate people from their wealth.
 
You probably won’t hear the ‘you snooze you lose’ type of fear tactic hear.  At the most, you’ll be shamed in front of your peers if you walk away from this great deal, but there is very little typical sales pressure that normally alerts consumers to a high-pressure sale.

These sales people will use proven terms that you are familiar with such as ‘off shore investments.’ The temptation to make a bigger investment without paying taxes is too tempting for the best of us.

Everything looks legit, so people write cheques for upwards of £10,000.  A quarterly report is delivered.  The investment is legit.  Unfortunately, your money is now in the criminals who are collecting the profits.  They even send statements.  Then, when they have made enough money, the statements cease arriving, the newsletters stop, and the offices are abandoned.

Are You Smarter than Charles Ponzi?

Charles Ponzi emigrated to American from Italy in 1903. He didn’t invent the Ponzi investment scam but he made it a huge success.  In effect, this is the most dangerous scheme. 

Here is how it works. A few of your friends invest a few hundred pounds in this scheme. They make .20 - .50% of their investment back within a few weeks, usually 30 days.  You are enticed and sign.  You make money. This scenario may work once or twice.  New members pay fees which are used to pay the ‘profits.’

When enough money is has been invested, the company vanishes.

Vishing

While most of the world is still falling for Phishing, many companies are adding a little twist to the old scam.  Instead of clicking on a link, you are asked to phone the office.  Of curse, the entire phone system is set up to make you believe that you have actually contacted the company offices for your bank, ebay, or PayPal.

The automated phone system may ask you to go through a questionnaire like you’d have to face if you contacted the real company.  Of course, to make it through the questionnaire you need to give them your information – to speed up the process.   You won’t even know that you’ve been scammed until money starts disappearing from your account.

Aging

Aging is not a condition.  It doesn’t make people less savvy or easier to scheme.  Scammers focus on older people because they become desperate. Their options slowly dwindle.  The fewer options the adult has, the more susceptible they are to scammers. 

The victims are not foolish.  They are just facing the limitations of retirement, and want to do something – take action – to solve their own problem.  After all, boomers have been solving money problems for decades.  They learned how to make the most of their investments.  They introduced the term entrepreneurship and changed ‘mom and pop’ to small business.  They are at the foundation of the dot com boom. 

It is sad that scammers are using the boomer’s own techniques to scam them. But, we can fight back.  Report these scammers to the Office of Fair trading as soon as possible.