web analytics
March 2, 2015 / 11 Adar , 5775
At a Glance
Blogs
Sponsored Post


A Dumb Investment Someone Wants to Sell You Now

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 and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. 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. 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.

Current Top Story
Some 1,500 teens from around the world at the Chabad CTeen convention hear a personal greeting from UN Secretary-General Ban Ki-moon on March 1, 2015.
Ban Ki-moon Greets 1,500 Jewish Teens at Chabad CTeen Convention
Latest Blogs Stories
Doug Goldstein

What are the ramifications of giving up your US citizenship? Would it effect your visiting the US?

brit mila at French jewish community

Chasidim believe that Metzitza B’Peh (MbP) is an essential part of the circumcision ritual.

Herzog & Livni

AMERICAN INTERFERENCE in ISRAELI ELECTIONS is IMMORAL and 1000% CHUTZPADIK!

Baruch Marzel (left) and Hanin Zoabi

Extremism from Jews is considered a “danger;” Arab extremism and anti-Jewish terror is “legitimate”

It was in fact Israel, not Palestinians or journalists, who began spreading the older photos, in order to generate credibility for the “slander” angle.

Next week we celebrate Purim, more relevant and illuminating in light of current events than ever

“They all attack each other” is how David described campaign tactics. “Welcome to politics, my son,”

Most Israelis think kowtowing to US demands to get on Obama’s “good side” won’t work and isn’t right

Big questions this week: Does materialism make people happy? Can one be happy with what they have?

A Rosh Yeshiva guessed 60% of bochurim in Israel’s yeshiva system belong there only 3-4 yrs post HS

Wednesday evening 25th of February there’s just the event for Anglos to attend, The Anglo Vote!

3 men pin the terrorist. In the white shirt is Jerusalem’s Mayor Barkat, taking a hands-on approach

The necessity for setting financial goals and how to realize your life’s dreams.

Not long ago Israelis waited nightly during campaigns for TV broadcasts of election campaign movies

I heard men singing…I saw men dancing. Can you imagine? It’s literally FREEZING out there! WOW!

Lapid is not anti-Haredi; He’s pro-Haredi in his way, wanting them to flourish. and join society

More Articles from Doug Goldstein, CFP®
Doug Goldstein

What are the ramifications of giving up your US citizenship? Would it effect your visiting the US?

Doug Goldstein

Big questions this week: Does materialism make people happy? Can one be happy with what they have?

The necessity for setting financial goals and how to realize your life’s dreams.

Discussing the connection between speech and thought and how a foreign language affects decisions?

Can a business trying to find solutions to world problems be profitable?

In our second podcast this week, Doug meets James Clear, entrepreneur and expert on personal habits. How easy is it to change your behavior to achieve your goals? And how can you improve your financial habits if they are deeply ingrained? Listen to your favorite personal finance show for the answers to these questions and […]

Does wealthy always equal healthy, and how do personal relationships affect your financial success?

Find out about the relationship between money and life and why you need to budget and save

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: