The Adam's Homework Chronicle's, Volume 5
This is the final segment written and sent to Adam's finance professor. This section was supposed to be about Fraud and Money Scams.
The final homework section to write about is the section on frauds and scams. There is not much material in the chapter specifically addressing this issue. The chapter mainly focuses on protecting one’s investments without really addressing frauds or scams. I will elucidate you upon my knowledge about how I have protected my investments in my life.
First and foremost I should address one of the biggest scams one can invest in: credit cards. Upon reading the fine print on any credit card offer there should be a plethora of red flags that go off within one’s mind. The fact that you are not actually in control of any of the money you are spending should be a red flag in itself. The credit card company can change your rates at any time they please. Would you willingly take money from Vinnie and his mobster cousin if you knew you could not pay back at the end of the month? Then why would you give money to an organization that is larger than any crime family in the US? However, the paradigm we are forced to live under states that in order to establish credit, to eventually get loans, to buy the things we want, we must have credit cards. Thus, one must be responsible as to not be scammed out of their money. The way one is responsible with their credit card then is that they should use it like a check card. I.e., only spend money you know you are able to give back to the credit card company at the end of the month. Never have a running balance. Problem solved. Keep your money where it belongs: under the mattress and guarded with a large caliber weapon and a bottle of Old Crow whiskey.
The lottery is also a classic example of a poor investment. Though not conventionally a scam, the lottery is an inventive way to screw people out of money. The lottery gives individuals with rudimentary reasoning skills a glimmer of hope that they will be the one among 30 million people who hit it big and can retire before the age of 90. Slap a sexy lady on the billboard for the lottery and the game is over. The village idiot’s entire life savings, gone in a weekend, spent on lottery tickets, and the state’s deficit is resolved. Sperm have a greater chance of winning the egg lottery than ordinary yokels do the state lottery. Moral of the story: the lottery is a voluntary tax on the stupid.
A recent scare in the eternal struggle to protect one’s investments is the threat of identity theft. Identity theft is pretty much any instance where individuals gain access to another individual’s financial data and proceed to liquidate their assets. Like the lottery, many instances of identity theft have to due with the complete lack of intelligence of the victims. Though some scams cannot be avoided because the ingenuity of the guilty parties, most scams can be avoided by the exhibition of a novel concept called “deductive reasoning”. Let us examine this example. You get home from work and sit down to check your email. It has been a long day and you are craving a drink, but this simple task beckons your attention because it seems relatively prompt, which will allow for maximum drinking time later. You open your inbox and there are 65 new messages in the inbox and last night there were none. All these emails are from people who are supposedly esquires from countries whose names who will fail at pronouncing. In your infinite curiosity you choose to open one of these emails. This is a mistake but don’t worry, it is not too late. The email then has a script similar to this: “Hello Mr. or Mrs. Smith. I am a prominent lawyer from Nigeria. You may not know it, having a white protestant Christian name, but your long lost African cousin from my country has recently passed away. He has left you a large sum of money in the area of 5 million dollars. Your cousin has willed you this money and I will need your social security number and banking information to be bale to give it to you. If you will just forward this information to me now we can resolve this issue. Thank you.” At this point the smart investor abruptly stops reading and clicks the clearly visible “delete” button in the top right hand corner of his screen. The unwise investor, who may or may not have any money leftover after buying a lifetime supply of losing lottery tickets, will promptly reach for his or her wallet to retrieve the information to quickly pass over to their deceased African cousin’s lawyer so they can get that 5 million dollars and get their 1987 Ford Pinto off blocks and off the front lawn immediately. Again it appears that identity fraud, specifically Nigerian money scams, are a voluntary tax on the stupid. However, the wise investor, knowing fully well that most people are out to rob him of his wealth (or her of her wealth of course), will always avoid giving out his personal information at all costs, and protect his valuable assets for years to come.
The final homework section to write about is the section on frauds and scams. There is not much material in the chapter specifically addressing this issue. The chapter mainly focuses on protecting one’s investments without really addressing frauds or scams. I will elucidate you upon my knowledge about how I have protected my investments in my life.
First and foremost I should address one of the biggest scams one can invest in: credit cards. Upon reading the fine print on any credit card offer there should be a plethora of red flags that go off within one’s mind. The fact that you are not actually in control of any of the money you are spending should be a red flag in itself. The credit card company can change your rates at any time they please. Would you willingly take money from Vinnie and his mobster cousin if you knew you could not pay back at the end of the month? Then why would you give money to an organization that is larger than any crime family in the US? However, the paradigm we are forced to live under states that in order to establish credit, to eventually get loans, to buy the things we want, we must have credit cards. Thus, one must be responsible as to not be scammed out of their money. The way one is responsible with their credit card then is that they should use it like a check card. I.e., only spend money you know you are able to give back to the credit card company at the end of the month. Never have a running balance. Problem solved. Keep your money where it belongs: under the mattress and guarded with a large caliber weapon and a bottle of Old Crow whiskey.
The lottery is also a classic example of a poor investment. Though not conventionally a scam, the lottery is an inventive way to screw people out of money. The lottery gives individuals with rudimentary reasoning skills a glimmer of hope that they will be the one among 30 million people who hit it big and can retire before the age of 90. Slap a sexy lady on the billboard for the lottery and the game is over. The village idiot’s entire life savings, gone in a weekend, spent on lottery tickets, and the state’s deficit is resolved. Sperm have a greater chance of winning the egg lottery than ordinary yokels do the state lottery. Moral of the story: the lottery is a voluntary tax on the stupid.
A recent scare in the eternal struggle to protect one’s investments is the threat of identity theft. Identity theft is pretty much any instance where individuals gain access to another individual’s financial data and proceed to liquidate their assets. Like the lottery, many instances of identity theft have to due with the complete lack of intelligence of the victims. Though some scams cannot be avoided because the ingenuity of the guilty parties, most scams can be avoided by the exhibition of a novel concept called “deductive reasoning”. Let us examine this example. You get home from work and sit down to check your email. It has been a long day and you are craving a drink, but this simple task beckons your attention because it seems relatively prompt, which will allow for maximum drinking time later. You open your inbox and there are 65 new messages in the inbox and last night there were none. All these emails are from people who are supposedly esquires from countries whose names who will fail at pronouncing. In your infinite curiosity you choose to open one of these emails. This is a mistake but don’t worry, it is not too late. The email then has a script similar to this: “Hello Mr. or Mrs. Smith. I am a prominent lawyer from Nigeria. You may not know it, having a white protestant Christian name, but your long lost African cousin from my country has recently passed away. He has left you a large sum of money in the area of 5 million dollars. Your cousin has willed you this money and I will need your social security number and banking information to be bale to give it to you. If you will just forward this information to me now we can resolve this issue. Thank you.” At this point the smart investor abruptly stops reading and clicks the clearly visible “delete” button in the top right hand corner of his screen. The unwise investor, who may or may not have any money leftover after buying a lifetime supply of losing lottery tickets, will promptly reach for his or her wallet to retrieve the information to quickly pass over to their deceased African cousin’s lawyer so they can get that 5 million dollars and get their 1987 Ford Pinto off blocks and off the front lawn immediately. Again it appears that identity fraud, specifically Nigerian money scams, are a voluntary tax on the stupid. However, the wise investor, knowing fully well that most people are out to rob him of his wealth (or her of her wealth of course), will always avoid giving out his personal information at all costs, and protect his valuable assets for years to come.