WealthEsteem.org

Author: Paul Zagoridis

  • My Alfred scam call

    My Alfred scam call

    I just got a call from 0485 815 487 claiming to be from My Alfred for automated trading.

    I was caught off-guard because the guy had an Australian accent, and sounded more mature. Actually the whole site is targeted and tailored to Aussies.

    He started by claiming 3-20% return on capital per month. Nobody can deliver that and if they can they don’t make cold calls to strangers to share it.

    My first question was “How did you get my number?” The lies started there with “You probably made a financial enquiry online, that’s how we usually get numbers in our system.”

    I never make financial enquiries online with that number. So yep that is illegal. Legitimate brokers know where their enquiries come from.

    As soon as I started saying “This sounds like a scam”, he said “that’s your opinion” and hung up. Which is what scammers do. Legitimate brokers start providing evidence that they are regulated and have real world presence in Australia.

    I didn’t even get ask about Australian Financial Services licences, which they are required to have in order to call me or you. AFS Licences are not difficult to get unless you are a scammer. Plus an AFS Licence helps prove the business is legitimate.

    According to their website MyAlfred’s street address is a serviced office in Brisbane hosted by AtWorkSpaces or @WORKSPACES but I can’t find a company name behind the host. There are a lot of real estate listings for that address, so maybe they just have a dodgy tenant?

    Looking at the website, it has the usual red flags when combined with an unexpected cold call:

    • Forex
    • Commodities
    • Indexes
    • Derivatives
    • “Completely automatic”
    • “You dont need to lift a finger”

    At least they have a disclaimer:

    Disclaimer: Trading derivative products are not suitable for all investors. The derivative market carries risks to your investment, including the possible loss of part or all of your investment. Our website contains general information only. Before investing, It is recommended that traders consider whether the derivative market is an appropriate investment avenue in regards to risks, personal experience, and financial condition.MyAlfred website

    Also on the website is My Alfred is a software product of Forex EA Pty Ltd. This is supported by their website registration info.

    Forex EA Pty Ltd entered an enforcable undertaking with Australian Communications and Media Authority on 9 December 2021 for failing to comply with the Do Not Call Register Act 2006. Another strike.

    On a positive note MyAlfred’s whois information is not privacy protected. This is unusual as most scammers hide their registration information. Legitimate financial services firms also do not privacy protect their registration information.

    The auto trading robot looks like MetaTrader 4 or 5, I can’t tell from the grainy screenshot they’ve included. I’d guess Version 4 as that is the most popular. 100% of scammers use MetaTrader but not all MetaTrader using companies are scammers.

    My number is on the Australian Do Not Call Register so I should not have been called.

    More importantly, if they are merely selling access to highly-leveraged derivatives trades with custom indicators on a MetaTrader platform, that is not illegal. The horrible part of the business model is cold-calling Australians who mostly do not understand the risks associated with those choices. There are legitimate ways to tap into a market of people wanting to up their risk and rewards, but outbound telemarketing is too expensive for legitimate operators.

  • Welcome Back

    A belated Happy New Year. I could have edited the timestamp to make this on time but that would be cheating.

    During the Christmas shutdown we didn’t upgrade anything. It’s a long, boring and unenlightening story. You win some…

    Oh well. We are working on the erratic hosting. Sorry about that.

    The good news ins all writing staff are back on deck and tapping out articles.

  • Giving it away

    I tithe. That means 10% of my income and capital gains is given away. That either occurs quarterly on trading income or on settlement for capital gains. I give sacrificially, if I don’t miss it I’m not giving enough.

    Why? Because I think my gifts make the world a better place. I also believe that it is the obligation of the fortunate to contribute to society’s less fortunate. I also get better results when I’m tithing to when I’m not. The evidence for that is anecdotal and without scientific verification.  ; ) 

    The main reason I tithe right now is to answer the following question. When is the best time to start giving your wealth away? If I can’t give sacrificially today while I’m building the wealth how will I give once I’ve made it? And how will I know when I’ve made it sufficiently to start giving?

    There is never a good time to start giving. Start anyway the discipline is worth it.

  • One learner at a time

    When I learned to drive I was required to have a fully qualified driver in the front passenger seat. That “black licence” was required to be sober and responsible. That is good risk management on behalf of the community.

    In poker if you can’t tell who the sucker at the table is, look in a mirror. That is good risk management on behalf of your wallet.

    When investing make sure there is only one learner in the team per deal. Your team consists of you, your financier/broker, your lawyer and your real estate agent.

    I made a mistake with these three units. I am breaking in a new broker, a new lawyer and it’s been a while since I bought three units at the same time — so I’m rusty.

    I had a 75% LVR loan offer on the table from NAB as part of my professional’s package. But it needs me to tidy up some outstanding paperwork that is not good timing right now.

    I heard of a broker who could organise finance for such small apartments easily. I casually mentioned this to another keen broker I know well, let’s call him Bob. Now Bob is a top producer for his firm. This guy writes loans. A lot of loans. This means he knows how to get things done.

    But my requirements are outside the square. Bob is good, but he’s also new at it – a little over a year. So he doesn’t have huge vats of experience.

    Bob tells me he can get me 80% LVR no probs. So I go with Bob. Three weeks later I get all the paperwork they want together and am running through the fees. Guess what? The extra 5% LVR will cost me 1% application fee, 3 months interest early repayment fee, 1.18% premium for the risk. So they’ll give me the extra 5% but take it back in fees! I pushed back and Bob found me another loan.

    During the scary time in the middle of this I called the Experienced and Reputable Broker. He said 90% LVR, LMI 1.5%, three day approval, two week settlement. I’m meeting with him on Monday.

    The lesson is one new driver at a time. Nothing is insurmountable providing there aren’t a dozen problems at once.

  • Hack Attempt #1

    Someone tried to hack the site tonight. I don’t know whether to be angry or flattered. So if you show up one day and it seems like I’ve moved into the porn-biz you’ll know:

    1. I’m 0wn3d by script kiddies (i.e. the site has been defaced).
    2. Don’t hire me as your IT security consultant

    Seeing as I don’t do any IT consulting anymore that should be enough warning.

    That leads me to reinforce the message, this site is really for my own and your amusement. Therefore it is in constant flux and doesn’t really get a lot of “systems” attention. While I do wish I could find out what is slowing the computer down, I’m not putting a lot of resources into the server.

  • Credit Card Danger

    I bought a strata unit with a credit card cash advance once. I’ve used the same technique for a deposit in a hurry. Until recently I was a fan of lots of credit cards with high limits — providing you knew how to manage a bank’s Debt Service Ratio (DSR) calculations.

    You see, banks assume your credit cards are maxed out all the time and factor that into your borrowing limit. What if you listen to Paul Clitheroe, Robert Kiyosaki or other wealth advisors [or pundits like me? 😉]

    Don’t carry a balance on your credit card?

    Surely that counts for something?

    Often not. The major banks’ DSR assume you carry the limit because you can. Look up “contingent liability” someday. So if the DSR looks tight you might cancel or reduce your limits before applying for the loan.

    Anyway I no longer favour lots of cards with lots of limits. You ask why (go on I’ll wait)?

    Three little words…

    …Fees, Fees, Fees.

    I have been a Citibank customer for years. It gave me a nice feeling to have Big US Bank credit cards in my wallet. But US banks are “early adopters” of fees and then the Aussie banks follow.

    In addition to annual fees and high interest rates, I have the priviledge of: late payment fee, over limit fee, foreign currency conversion fee and cash advance fee. Credit cards are not about convenience where a smart operator can take advantage of a system designed for balance-carrying sheep. The cash advance fee is 1.5% of the drawdown regardless of how long I keep the money.

    Now Westpac is following suit with similar fees and my experience is the other banks can’t resist a good revenue stream.

    Time to find a new source of quick cash.

  • Someone’s trying to screw you

    I just go home from listening to Peter Holmes à Court give a casual talk at the Sydney Chapter of Young Entrepreneurs Organisation. I won’t reproduce his entertaining, inspiring and insightful comments here — if you ever get a chance to hear Peter talk, take it.

    One point he did make was 

    “Someone’s always trying to screw you, don’t let it change you.” – Peter Holmes à Court 

    There is power in this zen-like state. There are crooks, opportunists, charlatans and even terrorists out there. We may be unfortunate enough to cross paths with a few. As a matter-of-fact it’s almost inevitable. But that doesn’t mean we must fret about it. We are big people now, with confidence to deal with whatever life throws up.

    Take some risks.

    PS Peter’s 10 points inspired a number of reactions in me. I’ll be posting on those reactions over the next few days.

  • Horse Trading

    I sat in on an exchange between two very experienced businessmen today. What an education in five minutes. The Salesman and the Entrepreneur.

    Entrepreneur: We bought these from you last time at $1.62. Why do you want $2.25?
    Salesman: I have to pay MGM an 18% royalty on these.
    Entrepreneur: (grabs a calculator) $1.62 +18% (+10% for safety) that’s $2.10. How many have you got?
    Salesman: I’ve got 20,000 now and another 15,000 on the water.
    Entrepreneur: I’ll take the lot over 3 months and pay you slowly. I don’t want them showing up at my competitors. They’ll kill the market.
    Salesman: Ok, deal.

    I spoke to the Entrepreneur after. He was happy to get the product at a price he can move the stock. You make your profit when you buy and just collect it when you sell. But you don’t have to screw your supplier. The Salesman knows he’s got a reliable sale. Win-win all round. But the whole deal was concluded in 10 minutes.

  • Small Unit Finance

    It seems that GE – Mortgage Insurance Services has decided that small units (<50sqm) are not good. This is a relatively new wrinkle as I have seen the lender summaries that brokers use to assess lenders. GEMIS used to do these loans.

    Anyhow if it was easy everyone would do it and I wouldn’t have the opportunity to earn excess returns.

    Tonight I heard that there is still a financier or two left who can lend 80% Loan-Value-Ratio (LVR). It may cost me a rate premium, but that’s still ok. More as it comes to hand.

  • WealthEsteem’s 12 Life Insurance Rules of Thumb

    American Express called Nella this week. They’re selling a life insurance policy.

    So here are a dozen Life Insurance Rules of Thumb.

    1. For the Term of his natural life? Jargon Busters

    Term Life Insurance is a straight-up insurance policy. You die (or some other defined incident) and the insurer pays money. Whole of Life Insurance has a savings component and surrender value. Commissions, fees and charges are higher on Whole of Life, plus it takes about 20 years for Whole of Life to offer a decent return.

    What to do?

    1. Buy term – invest the rest. Note that second phrase.
    2. Build your asset base to provide sufficient income, until insurance is no longer required.

    2. Never buy insurance from telemarketers, or On sweatshops and boiler rooms.

    How much money would it take to make you ring people at home in the evenings to sell stuff? They can’t pay me enough.
    Nella used to sell trade magazine advertising over the phone. Nella gave great phone for great commissions. Telemarketing is an expensive business and premiums pay for it.

    3. Cheap and “easy”, “no medical” insurance isn’t, or What free lunch?

    Online, I compared three Term policies from two insurers monthly premiums.

    AmountCo. ACo. B
    $100,000$15.07$12.30
    $200,000$22.65$24.60
    $300,000$27.28$35.98

    Most brokers can get an average person $500,000 coverage for the $300.000 premium.

    4. Don’t smoke, or Can you say Yule Brunner and Steve McQueen?

    You know it kills you? Well your insurance company knows it. Smoking will add about 75% to your premium. I know it’s “Yul Brynner” but you’d be surprised how many people search Google with the misspelling.

    5. TPD? Better than ADD.

    Total and Permanent Disability cover is expensive and full of “exclusions”. That’s insurance speak for reasons not to pay you. However it is nice to get paid as soon as something bad is diagnosed. So I have Term Life and a much smaller $100,000 TPD cover. Should a bad thing happen I get money for treatment and to put my affairs in order. Term cover will then pay out when the end comes.

    6. Only insure income producing assets, or Do you want fries with that?

    Brokers love to upsell. Your home-maker spouse allows you to work and you’d miss them on cold nights. Don’t insure them unless they make mortgage payments. Invest the premium instead.

    7. Review your insurance at least every two years, or know when to fold ‘em.

    Once your assets are feeding you, do you really need half a million in Term Life? Thinkaboudit!

    8. Income Protection Insurance, or You don’t need it, till you need it.

    Can you afford 6 months unable to work? Would your investments eat you? Watch out for medical history excluding you on this.

    9. Get Term Life before 34 but not too soon, or How old am I again?

    Most people can qualify for Term Life before 34. Does a 23 year-old without obligations need it? No.

    10. Start investing, or That means today, slacker!

    Do something about it today. Insurance companies only write business for the cashflow to invest. There’s a lesson in that.

    11. The most powerful force in the universe?, or Up, up and away

    Compound interest. There’s an article in just this. You do know that at 10% p.a. you double your money every 7.2 years?

    12. Add you’re own or Whose life is this anyway?

    I can’t tell you everything or you won’t learn. Get a piece of paper out and write a plan. Now! I’ll wait…

    Then add a reply down there with the suggestion…

    I’m waiting…

    Really…