Author Topic: At the Top of my list of terrible investments  (Read 1797 times)

JAYSLOL

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At the Top of my list of terrible investments
« on: November 28, 2019, 01:27:21 PM »
I posted this in the anti-Mustachian wall of shame and comedy under the MLM thread, but I though some input from people in the investment section might be a good idea.

Earlier this year, a work colleague sent me an email about something crypto currency related, it looked like an email that was sent out to a large list of contacts and I thought his email had probably just been hacked and had sent out some spam without his knowledge, so I didn’t even click on it.  Well, a few months later he mentioned he wanted to get together and talk about investing in a “gold-backed crypto currency”.  I have no interest in buying into anything like that, so just listened without expressing any interest.  Well, recently he mentioned it again and wants to get together to talk more about it, so out of morbid curiosity I went back to the original email to see what I could learn about it.  Oh man, it’s so much worse than just another pointless coin, it’s basically from a company that runs a terrible MLM scheme selling tiny gold bars to people at an absurd markup and there’s a huge pyramid based referral program to sign up other distributors at huge upfront cost.  I know the rational move is to politely decline a meeting because I wouldn’t touch this with a ten foot pole, but I can’t help but wonder if I can meet with him and ask questions in a way that helps him re-evaluate his investment.  (btw, he has 5 figures in these coins atm, so the stakes for him are pretty high).

Is there an easy way to explain that this company’s coins cannot be backed by gold as they claim?  I don’t know if he’s involved with the MLM side (which is banned in my country btw), but I wouldn’t be surprised.  Any advice on how I could knock some sense into him would be appreciated
« Last Edit: November 28, 2019, 01:30:06 PM by JAYSLOL »

Cassie

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Re: At the Top of my list of terrible investments
« Reply #1 on: November 28, 2019, 02:00:36 PM »
Jay, that’s truly awful for your friend.

Malkynn

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Re: At the Top of my list of terrible investments
« Reply #2 on: November 28, 2019, 02:12:47 PM »
DH has a relative involved in one of these crypto MLMs and there's absolutely no talking to him.

If he's involved in an MLM like that, chances are he really really doesn't want to hear reason.

mrmoonymartian

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Re: At the Top of my list of terrible investments
« Reply #3 on: November 28, 2019, 02:22:54 PM »
Work colleague? Who cares. Say "I wouldn't touch this if it was the last scam left on earth", and walk away.

Send them a link like this if you care for some strange reason. https://www.bbc.com/news/stories-50435014

JAYSLOL

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Re: At the Top of my list of terrible investments
« Reply #4 on: November 28, 2019, 02:39:29 PM »
Work colleague? Who cares. Say "I wouldn't touch this if it was the last scam left on earth", and walk away.

Send them a link like this if you care for some strange reason. https://www.bbc.com/news/stories-50435014

Yeah, that’s likely what I’ll end up doing, unless I can get enough facts and talking points together to snap him out of it.  I am somewhat familiar with both precious metals and crypto currencies, (and more importantly the kind of investing and financial planning we do around here).  Not that it’s likely he’ll listen, it really shouldn’t fall on me (a landscaper 30 years younger than him) to give him (a freaking accountant) sensible financial advice. 

Rob_bob

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Re: At the Top of my list of terrible investments
« Reply #5 on: November 28, 2019, 03:56:38 PM »
These MLM can be like a cult. Once someone drinks the kool-aid they are true believers.

Andy R

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Re: At the Top of my list of terrible investments
« Reply #6 on: November 28, 2019, 07:18:23 PM »
Work colleague? Who cares. Say "I wouldn't touch this if it was the last scam left on earth", and walk away.

Send them a link like this if you care for some strange reason. https://www.bbc.com/news/stories-50435014

Damn .. just finished reading that link. Totally insane.

JAYSLOL

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Re: At the Top of my list of terrible investments
« Reply #7 on: November 28, 2019, 07:33:27 PM »
These MLM can be like a cult. Once someone drinks the kool-aid they are true believers.

Yeah I know, I’m still not certain if he’s involved with some form of the MLM side of that company or just heavily invested in their crypto coins, but when he first mentioned it he did go on and on about all the amazing new things this company is up to so he’s definitely been drinking the kool-aid.  They were all huge red flags to me, like the company was “going to” be opening a crypto bank (like a physical branch, which makes no sense), and they were “going to” come out with their own smart phones, and on and on for like 20 min all these things that were “going to happen”, which even if they weren’t empty promises (which they all sound like they are based on what I’ve read about the company), it makes no sense why any of that would make the value of their coin go up.  Obviously the company is desperate to say anything to keep the hype going to those “invested”, otherwise those people might catch on to the fact that they aren’t really providing any actual value, only false dreams of riches.

ApacheStache

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Re: At the Top of my list of terrible investments
« Reply #8 on: November 29, 2019, 01:00:28 AM »
Quote
it really shouldn’t fall on me (a landscaper 30 years younger than him) to give him (a freaking accountant) sensible financial advice.
Yikes! Please tell me he's not an accountant at your current employer?

Yeah I know, I’m still not certain if he’s involved with some form of the MLM side of that company or just heavily invested in their crypto coins, but when he first mentioned it he did go on and on about all the amazing new things this company is up to so he’s definitely been drinking the kool-aid.  They were all huge red flags to me, like the company was “going to” be opening a crypto bank (like a physical branch, which makes no sense), and they were “going to” come out with their own smart phones, and on and on for like 20 min all these things that were “going to happen”, which even if they weren’t empty promises (which they all sound like they are based on what I’ve read about the company), it makes no sense why any of that would make the value of their coin go up.  Obviously the company is desperate to say anything to keep the hype going to those “invested”, otherwise those people might catch on to the fact that they aren’t really providing any actual value, only false dreams of riches.

Depending on his level of involvement with this "company", if we were to pretend this company were real, it sounds like he'd be providing you with knowledge about the company that the rest of the public is not privy to -- i.e. Insider Trading. Since we all know this company is not real, then there's no real problem. However, don't let that stop you from telling him you're not interested and would never be allowed to participate due to Insider Information :)

Also, it's a major red flag when someone randomly mentions you can get rich by doing XYZ. If it's a legit/legal get-rich-quick-scheme, chances are no one is going to reveal the details until well after they're bloody rich and willing to share a piece of the pie.


Malkynn

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Re: At the Top of my list of terrible investments
« Reply #9 on: November 29, 2019, 04:35:19 AM »
Quote
it really shouldn’t fall on me (a landscaper 30 years younger than him) to give him (a freaking accountant) sensible financial advice.
Yikes! Please tell me he's not an accountant at your current employer?

Yeah I know, I’m still not certain if he’s involved with some form of the MLM side of that company or just heavily invested in their crypto coins, but when he first mentioned it he did go on and on about all the amazing new things this company is up to so he’s definitely been drinking the kool-aid.  They were all huge red flags to me, like the company was “going to” be opening a crypto bank (like a physical branch, which makes no sense), and they were “going to” come out with their own smart phones, and on and on for like 20 min all these things that were “going to happen”, which even if they weren’t empty promises (which they all sound like they are based on what I’ve read about the company), it makes no sense why any of that would make the value of their coin go up.  Obviously the company is desperate to say anything to keep the hype going to those “invested”, otherwise those people might catch on to the fact that they aren’t really providing any actual value, only false dreams of riches.

Depending on his level of involvement with this "company", if we were to pretend this company were real, it sounds like he'd be providing you with knowledge about the company that the rest of the public is not privy to -- i.e. Insider Trading. Since we all know this company is not real, then there's no real problem. However, don't let that stop you from telling him you're not interested and would never be allowed to participate due to Insider Information :)

Also, it's a major red flag when someone randomly mentions you can get rich by doing XYZ. If it's a legit/legal get-rich-quick-scheme, chances are no one is going to reveal the details until well after they're bloody rich and willing to share a piece of the pie.

...but...how would that kind of "insider trading" be illegal?

JAYSLOL

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Re: At the Top of my list of terrible investments
« Reply #10 on: November 29, 2019, 10:09:46 AM »
Oh it’s a real company, it just happens to be one with very shady operations and I don’t believe one word of what they say they promise because of the way they run their MLM side of things.  Nothing about what he’s going to tell me is insider knowledge, I’m sure it’s all stuff the company itself is pushing out there as hard as possible to hype up nonsense.

From what I’ve looked up the number of coins they created is 12billion, and the circulating supply is only 3billion, so I take it the people that own the company still own 3/4 of the coins and have a huge financial stake in getting more people into this crap
« Last Edit: November 29, 2019, 10:11:48 AM by JAYSLOL »

ApacheStache

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Re: At the Top of my list of terrible investments
« Reply #11 on: November 29, 2019, 10:34:11 AM »
Ah, thanks for clarifying JAYSLOL. I was mistakenly under the impression that he knew something that the rest of the public didn't.

Finances_With_Purpose

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Re: At the Top of my list of terrible investments
« Reply #12 on: November 29, 2019, 12:01:08 PM »
That's awful @JAYSLOL .

Personal tip: I find it better to think of these types of things as a religious faith.  Or, more accurately, a cult.  Would you go hoping to convince your friend he's not Muslim?  Or Christian?  Etc.?  How about a cult? 

These (MLMs/pyramid schemes) aren't hard to see as frauds.  He has almost doubles received that feedback from various people close to him already.  And he has been literally trained on how to dismiss every concern that you raise. 

I wouldn't fool with trying to convince a fool unless it were someone who I had a very close personal relationship with.  And even then, there's only so much you can do.  By the time a person has bought in, they're bought in and it's very hard to convince them otherwise.

JAYSLOL

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Re: At the Top of my list of terrible investments
« Reply #13 on: November 30, 2019, 06:44:32 PM »
Well, I did meet up with him.  And it went exactly as you all predicted it would.  I didn’t outright call out this investment as a scam (because that’s probably counterproductive to someone heavily invested), but I did ask a lot of critical questions and outlined some of my concerns, to which he didn’t really have answers and when backed into a corner basically would always go back to “well, I don’t know, but everything in life is just a big gamble”.  I of course told him I don’t see myself putting any money in, but I’m sure he’ll bring it up again.  He has very much drunk the kool-aid. 


Trevor Reznik

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Re: At the Top of my list of terrible investments
« Reply #14 on: November 30, 2019, 08:40:33 PM »
Someone with a lot of money personally invested and on the line is going to find it very hard to reverse course and extricate themselves from the scheme, as they'd basically be admitting to themselves that they've been an idiot.

wingfold2001

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Re: At the Top of my list of terrible investments
« Reply #15 on: December 01, 2019, 05:29:49 AM »
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JAYSLOL

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Re: At the Top of my list of terrible investments
« Reply #16 on: December 01, 2019, 11:08:49 AM »
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Kalergie

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Re: At the Top of my list of terrible investments
« Reply #17 on: December 01, 2019, 01:36:41 PM »
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