web analytics
September 2, 2014 / 7 Elul, 5774
At a Glance
Blogs
Sponsored Post
Jerusalem Mayor Nir Barkat (L) visits the JewishPress.com booth at The Event. And the Winners of the JewishPress.com Raffle Are…

Congratulations to all the winners of the JewishPress.com raffle at The Event



A Dumb Investment Someone Wants to Sell You Now

Doug Goldstein

Can you imagine the following story ever happening to you?

An elderly lady came into my office a while back and told me that she was a novice investor who was very lucky. “Lucky?” I asked. She explained that she was lucky enough to meet a nice, kind person who had sold her a unique investment of raw land that was destined to be converted into a major city one day. When I asked her more questions, she had no idea, claiming that she didn’t understand investments, but was just so lucky that one day she would be rich.

“So what’s the problem?” I asked.

“I need more monthly income,” she admitted.

Here’s what really happened to her: The client was approached by a salesman who said that if she bought into his raw land deal, she would quintuple her money. Since the deal was raw land, there were no renters, and therefore no income from the deal. Thinking that there was a great future to this proposition, the client bought one unit of the deal. Then, when she realized how rich she could become, and since she desperately needed more money, she went to the bank and borrowed some money to buy another unit. Now she owned two units of raw, non-producing real estate, and had to make monthly payments to her bank to pay off mortgage she had taken out to purchase it.

When the client realized that she had used up all of her money for a high-risk investment and, as a result had negative cash flow, she came to me. I called the salesman and asked how she could get out of the deal. He said that the units were not sellable until the whole project was complete. The deal never worked out and now, years later, this poor lady is still suffering.

I don’t know if the raw land will ever be converted into a city. It seems unlikely to me, but I’m not an expert in real estate or city planning. However, I do know that even if the investment itself isn’t dumb, it was a poor idea for the salesman to sell it to this lady. It certainly wasn’t appropriate for her.

When you read these stories, you may think that “it could never happen to me.” However, anyone can make a mistake in judgment when it comes to investing, just like anything else in life. Therefore, when it comes to your own financial dealings, don’t just examine the potential return of an investment. Rather, consider whether the investment program itself is right for someone in your situation. If you have stories like this to share, please send an email directly to me at doug@profile-financial.com or contact me through my website.

 

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning firm located in Jerusalem. He specializes in working with clients in New York, Florida, and Israel and is a licensed financial professional both in the U.S. and Israel. Securities are offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Doug’s newest book The Expatriates’ Guide to Handling Money and Taxes is available at www.expatguidetomoney.com. He hosts a weekly finance show, Goldstein on Gelt, on internet radio. Listen live or download podcasts. Toll-free from U.S. 1-888-327-6179, Jerusalem: (02) 624-2788. Follow on Twitter: @DougGoldstein or contact at doug@profile-financial.com.


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “A Dumb Investment Someone Wants to Sell You Now”

Comments are closed.

SocialTwist Tell-a-Friend

Douglas Goldstein
Current Top Story
Police set up roadblocks throughout the Sharon region and beyond to track down terrorists believed to have infiltrated the area.
Arab Terrorist Attack Foiled Near Netanya
Latest Blogs Stories
paramedikit-3

“I knew that being there would allow me to protect other soldiers.”

Kerry Repeats

JoeSettler asks what could still possibly be on the negotiating table with the PA after a summer like we just had…

Kurdistan Crisis

You did not want to listen because you could not blame my Israel.

iphone

Now everyone has easy access to the culture and all of its vices, both social and intellectual.

Connect the dots, please: All of these Muslim Arab terror organizations are connected.

“…while Hamas has been weakened it has not been destroyed…”

Jewish donors bought and donated the greenhouses to the Palestinians.

This week’s podcast discusses the need for transparency in international business dealings.

The new “Begin Plan” is an impending nightmare, it rewards the Bedouins for brazen land-grabbing.

There is absolutely nothing for Israel’s security in this American document.

Is it because of corrupt values and lack of meeting opportunities that we have a shidduch crisis?

Israel is fighting the war that none of the Western world has the ability or courage to fight.

Finish the job! Sayyem et a missima!סיים את המסימה!

Life after 50? You better believe it! Tips on how to prepare and enjoy life after retirement.

While I am no fan of the two-state solution, I think I have a solution for the Gaza strip. Let me make it perfectly clear that in no way do I believe a Palestinian people, nation or Arab State ever existed in the history of the world and certainly was not occupied by Israel. If […]

Hamas targeted the Erez Crossing when it knew that Gazans and Israeli Arabs would be there, out in the open…

More Articles from Doug Goldstein, CFP®
Goldstein 485x300

This week’s podcast discusses the need for transparency in international business dealings.

Doug Goldstein

Life after 50? You better believe it! Tips on how to prepare and enjoy life after retirement.

Marriage is not just about emotional fidelity but about financial fidelity as well.

Discussion on recent changes to Social Security benefits and how it will effect you.

Doug speaks with World Chess Cahmpion Magnus Carlsen.

Do Keynesian theories about government spending still apply today?

How can you prevent emotional baggage from holding you back?

This week Doug speaks with David S. Rose, entrepreneur, former angel investor, and founder of Gust.

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/a-dumb-investment-someone-wants-to-sell-you-now/2012/06/24/

Scan this QR code to visit this page online: