Posted on 04/20/2011 1:43:05 PM PDT by Signalman
NEW YORK (CNNMoney) -- Bobby Bradley, a 70-year-old retired bus driver, was duped out of $215,000 -- his entire life savings. Now, he's desperate for any work he can get.
"I've been looking for jobs but I'm too old, nobody wants to hire you at this age so it makes it rough -- I drove a bus for 35 years, so what am I supposed to do now?"
Frances Wills, 67 years old and also a former bus operator, has 75 cents to her name and can't pay rent after losing her $156,000 retirement fund.
"I can barely pay for my home or even the utilities bill -- and I live in a mobile home."
Bradley and Wills had transferred their retirement savings into investment accounts run by Thomas Mitchell, an investment adviser who gained the trust of a small community of retired bus and train operators in the Los Angeles area.
The Department of Justice is now charging Mitchell with running a 15-year Ponzi scheme that collected $15 million from a group of 150 retirees, causing them to lose at least $7 million in retirement savings.
Unlike Bernie Madoff's multi billion dollar scam -- which targeted many wealthy investors -- this smaller-scale fraud has stolen lifelines from retirees of modest means.
(Excerpt) Read more at money.cnn.com ...
“RALPHIE BOY!”
As an individual I feel compassion for him and the other that lost money in this scheme and if there is a silver lining, perhaps others will learn from their misfortune.
One of the first rules I learned as a young man was if it looks too good to be true, then it is most likely not true.
In investing, if the returns are much higher than anyone else is offering that means the risk is much higher as well.
The second rule is do not bet with the rent money. What this means unless you have all your necessities covered, you have no business taking risk. There are a lot of safe boring investments where you can park your retirement money. They may not provide a lot, but you are not going to lose it all either.
The last rule, if you are going to gamble, the odds are always in favor of the house, that includes stocks and bonds and anything else you care to gamble on.
That's right, blame the victims.
Making a well informed decision that goes south is not the same as falling for a ponzi scheme.
With all the training in life skills that people get in their years of public school education I continue to be amazed that people get bamboozled so easily.
“These people lost their money because of their own
stupidity and I do not suffer fools, (or their foolishness), gladly.”
Megabump though I would disagree that stupidity did these people in. More likely it was greed i.e. “amazing guaranteed higher returns.”
“The goldbuggers need to learn that.”
Gold isn’t an investment in the ordinary sense. It certainly is not a security. It’s money; it’s a monetary asset that denominated in troy ounces rather than dollars, euros, yen, or riyals.
As a monetary asset, the US dollar has been a lousy type of money for about five decades regardless of whether it is compared with gold or silver, or with Swiss francs or yen. In 1971, a dollar got you four Swiss francs. The same Swiss franc today will cost you $1.13. The future for the US dollar is none-too-bright either. The only time to go long the dollar is when interest rates are already high, and posed to go higher. That’s almost impossible to predict, and it makes a bullish position on the US$ very risky. I’ve swing-traded against the dollar for thirty years, and have never lost money betting against it. But that’s not saying much about my trading acumen, because the dollar has been in a fifty-year decline.
If one doesn’t have 10% of assets in precious metals or related investments (miners, ETFs, etc.), it’s time to start dollar-cost averaging in.
And what makes most ponzi schemes so attractive (that you’d lift all common sense safeguards on your money) is an expectation and/or belief that you are going to make a huge return with little risk...i.e. “greed”.
sorry...stupid is as stupid does...why should the taxpayers be responsible for someones stupidity???
“It’s money”
No, it’s a commodity. It has uses, and its value is based on how much people will pay for those uses.
Like all commodities, it is more stable in value than less tangible things.
Platinum or Rhodium are much more useful commodities, while retaining the dense value that Gold offers.
If you don’t mind non-dense value, other commodities are better still, like brass and lead.
This is sad, but the fact is the following rules still hold true:
Buyer beware.
If it looks too good to be true, it probably is.
You can’t cheat an honest man.
If these people are just plain dumb, then I feel sorry for their loss. I doubt they are dumb. More than likely, their greed did them in. OK, it is not “greedy” to want a high return, but it is “greedy” to convince yourself that somebody will guarantee you a 100% risk-free 12% return, when banks are giving 2% and CDs are giving 5%.
If you look around and every other safe investmenet is giving 5% or less and you find something guaranteeing a safe 12%, then you have to be an idiot or greedy to believe that. If it was a safe 12%, then either everyone would invest there or every other institution would have to raise their return on safety to match this competitor.
This is just another story of greed. Of course, the evil fraudulant scum should have the book thrown at him and then burn in hell. That goes without saying.
Con men are never in short supply. If you are a lifelong hard working bus driver, it is your responsiblity to guard your lifelong savings and be skeptical against promises that are too good to be true.
I have a hard time sympathising with these greedy victims, unless they are just really stupid people, then yes sorry for your loss.
I think they were just greedy. Get smart and better luck next time. Teach your kids by your mistake. And grandkids.
Public school never taught us:
If it sounds too good to be true; it probably is.
Don’t put all your eggs in one basket i.e. diversification.
The power of compound interest when reinvesting.
Learned this from watching my mother invest after my father’s death and was a priceless education.
Dollar cost averaging
75% low-fee broad-market index fund
10% investment quality bond fund
10% well-managed no-load foreign equity fund
5% gold & silver (physical ownership)
Don’t touch for the next 40 years
Sleep well at night
Feels good man.
I saw a lot of persons in my end of the state loose life savings in an uninsured S&L because they thought the ones running it walked on water. It went under as well as a FDIC insured bank ran by the same banking family. The ones running the bank in comparrision to the damage they and harm they caused others did very little time at Club Fed. They were within a decade given their freedom and most of the money never recovered.
Those condemning the investors in this article need to realize it could have been them just as easily ripped off in an area they know little about like building a home or buying a car etc. Not everyone has the talent for stock market investments which makes some more prone to being ripped off. Usually they hear the investor at work saying how much money they made buying this or that stock etc. But you'll never hear such investors saying what all they lost either.
That being said though where you have someone running scams to take persons life savings need to be given one of two choices. Either surrender the money they took by fraud or forfeit their life. I don't mean as in life in prison I mean their very life.
Our laws are far too lax on white collar crime where suit wearing shysters steal every bit as wrongly as a man robbing a bank. Give them one of two choices. Surrender the money they took and names of those associated with their crime or give them death.
How can one feel sorry for people who are so damn dumb that they can’t recognize a shyster when they see one. If you’re offered a great, great deal, one better than your bank (for example) could come close to, then it’s a set-up!
Sure, it’s a commodity, but gold is indeed money. I think you’ll find that the Federal Reserve and the IMF both include gold holdings in their reckoning of the monetary base. If it were a mere commodity, central banks around the world would not be hoarding it.
Rebalance every decade or so ... move 5-10% from equities to bonds every ten years.
Sleep even sounder in years like 1987, 1989, 2000, 2008 and 2009. Actually, much sounder. Though you’re probably going to be richer if you stick with the original allocation, after 40 years, you’re talking serious money and the swings can be unsettling.
I did not condemn those that fell for this man’s scheme.
I was just using his situation to provide some advise to younger freepers.
I doubt there is any 100% safe investment, there is risk in everything, the best you can hope to do is minimize the risk.
I'm kinda like my dad in that the stock market as such doesn't interest me and I've seen sensible persons loose a considerable part of their retirement in what was once strong companies. He's kept his in the bank and avoided such loss. His only stocks are AT&T which were part of his benefit package for working for Ma Bell. As for me I don't have enough money to worry about LOL.
Yes. Forgot to mention that. Shooting for 60% stocks/40% bonds at retirement.
Otherwise, don't touch. Day trading is a fool's game.
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