Special thanks to all those who made a donation in person or online for the 18th annual Clark's Christmas Kids toy drive. It's not too late to help a needy family in your neighborhood! Donate now online and play Santa to a foster child this holiday season. RIP-OFF ALERT: If Clark told you that he could serve as your investment manager and earn you a steady 10% year after year, would you believe him? That was the promise Bernie Madoff made in a $50 billion Ponzi scheme that he ran for decades.
Madoff's actions were so secretive that even his own children didn't know what he was doing. When he confessed to them, it was
his own children who turned him in.
Know this: There is no such thing as a super-safe return of 10% or more. It is not possible.
Perhaps the Madoff scheme survived for so long because it didn't exactly promise outrageous rates of return by Ponzi scheme standards. The average Ponzi scheme might offer a 10% return monthly -- not over the course of year, as Madoff did. So he didn't exactly raise the suspicions of savvy investors -- even though they should have known better just the same.
What made individual investors, banks, charities and even (reportedly) Hollywood luminaries like Steven Spielberg buy into Madoff's scheme?
Two words: affinity fraud. Simply put, they were being pitched on a product by someone like themselves and they let their guard down.
See Clark's recent discussion of affinity fraud for more background on this topic. Before you consider any investment, you've got to do your homework. Can you handle the risk? Are the returns being promised reasonable? Finally, know the difference between saving and investing. Saving is safe and consequently offers very low returns. Investing isn't safe, but it does come with the possibility of higher returns.
