The FBI has arrested two people for stealing $69 million from people who thought they were putting money into investments. Instead it was used to buy jewelry, cars and fancy homes, according to the LA Times. The two main players in the scam told people they would get back 25 percent per year and as much as five times their initial investment for getting involved in this life insurance pool. In order to make it seem like it was real they bought several policies and showed potential targets. So, it looked legit from the get go. But the two crooks were already in trouble with the SEC for stealing $7 million in a “prime bank note” scam. There is no such thing as a prime bank note. So, what is the common thread here? People lose common sense when greed gets the better of them. Any time someone offers you a great return on your money and you are supposed to believe them on faith, you’re asking for it.
The student loan program as we have known it comes to an end June 30. It will be replaced with a new program that has extremely high rates and it will negatively affect people taking out loans this fall. For those who have been in college or are about to finish college, you can avoid the high rates. All you need to do is what’s called an “in-school consolidation.” To do that you must give up your six month grace period and lock in RIGHT NOW. Don’t wait until June 30 because everyone will be trying to do it around that time. Again, this is the last time you’ll be able to lock in at a decent rate. The new rates are going to be much higher. For parents taking out loans, the rate will be 8.5 percent. For students, it will be 6.8 percent. But if you lock in right now, your rate will be between 4 and 6 percent. Normally, students don’t think about doing anything for six months after they graduate because of the grace period, but you need to act now. For more information go to, loanconsolidation.ed.gov. And, Get Clark's latest update.
When the IRS says you owe additional money and need to pay up, most people roll over and play dead. It seems like the right thing to do, right? Well, yes. But did you know you can fight to lower what you owe. According to the GAO, people who appeal what they owe win 40 percent of the time. Those are good odds, but most people never follow through. This becomes more important when you learn that the number of people being audited is going up about 20 percent each year. If you have a “S corp” the odds are even greater that you’ll be audited. So, take a chance. Just make sure you keep good records and take those with you when defending your case.
Clark talks so much on the show about rotten companies and ripoffs that it’s hard to believe anyone is above board. Well, we’ve got one more instance for you, just to drive the point home even harder. Have you heard of “Ameriprise Financial?” It used to be American Express Financial but has spun off into a new outfit. Ameriprise reps convinced a large group of older Exxon retirees to put their retirement money into variable annuities and they lost it all. In fact, the people lost so much money that a division of the NASD is fining Ameriprise $22 million. That’s an unusual move for the NASD, so it tells you how dangerous these vehicles are. One man profiled in a story had $1 million saved at retirement. In five years, his million dwindled to $300,000. Clark hopes Ameriprise learns its lesson on this. You never, ever want to get involved with a variable annuity. So, when salespeople start pushing them on you – and they will push hard – run the other way!
Clark doesn’t leave the house without a watch on, but many young people today have never worn one. Cell phone, computers and PDAs all give us time along with other things. In turn, it’s killing the watch business. Watch sales are down 12 percent in the past few years, and those geared toward younger people are down 19 percent. Only about one in nine teens wear a watch, and almost none have any intention to buy one. You can probably get a great deal on a watch if you decide you want one.
For as many years as Clark can count, people have been calling the show to ask about pre-paid legal services and whether they are worth it. The most well known is “Pre-Paid Legal.” Barron’s did a story on this company recently and discussed the many pitfalls of getting involved. The article said the company is basically a multi-level marketing company and its numbers are growing. But what else do you need to know about the company? Well, you pay a monthly fee and you have access to an attorney for 60 hours of tiral defense work. That means time in the courtroom, so people only get about two hours of prep time outside the courtroom. Any attorney knows that most of the time is spent preparing for time in the courtroom. So, how do people feel about the company? Well, membership in the organization has continued to grow, but about 50 percent of the customers drop out after one year. After two years, two thirds are gone. On the other hand, competitor MetLife keeps 99 percent of its clients. If you’re considering being a customer, that should be clear enough. If you’re considering a sales position, only two percent of sales reps sold more than 10 memberships to the company. So the sales success rate is pretty low.
