Identity for Profit
In 2005, I was advised by a group of real estate investors. One who says he owns 50 different properties with many partners. He advised if I do not have money for investing, I should use my identity for prospect investors to use to purchase property and I get a small share. At the time, people made lot of money and different kind of real estate financial schemes.
Definitely it is a bad advice because if the investors default the loans, you are ultimately responsible for the loans and the properties are under the water.
Related Horror Stories
How My Wife’s Financial Planner Mismanaged Her Investments for Years
Sounds like my wife’s ex financial planner. I warned her after meeting him once before she gave him her money but she trusted him because her dad uses him (btw her dad has less than 1% of his net worth with this guy). Took me five years of doing yearly reviews with her to finally pull the money and put in index funds.
They put her in an annuity, impossible to liquidate private reits and my favorite was summer of 2020 after qe was in full force they put a third of her money in bonds. The underperformance was insane. Had it just been 10% worse than an index fund I’d be so happy.
Churned and burned
Some time in the past, a “financial advisor” convinced me that I could make a lot of money trading commodities. Wrong! I figured out he was just “churning” me (putting me into and out of too many positions, just to earn the commission), and I closed the account, buy not until he lost 80% of my money in less than a year!
Whole life insurance as an investment vehicle
The one stands out and given by multiple of professional or so-called professional is to buy a "Whole Life Insurance" as an investment vehicle plus life insurance coverage vs. a "Term Life Insurance" policy.
Just do some calculations of the future value (Excel formula FV) in 20 years of the estimated monthly premium cost for a $1 million Whole Life Insurance vs. a 20 year Term Life Insurance (for the rate of return, you may assume 8%, in some estimates the long term retun of the stock market if you invest that money in Index Mutual Funds.) – you'll be SHOCKED!
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