Beware of being scammed

I’ve long been interested in business, though in my retirement years, this interest is not as strong as when I was younger. One of the magazines I often read was “Entreprenuer Magazine” which, interestingly, still appears to exist as of today’s date (Nov. 24, 2022).

Because of this interest, the rise and fall of FTX—the cryptocurrency scam—has fascinated me. I recently watched this informative video and recommend it to anyone interested in educating themselves in this subject:

I’ve learned valuable lessons over the years when it comes to investing and one of them is: be careful what you invest in and make sure you are familiar with whatever company, business, or other field you wish to place your assets into.

For example, I would not invest one dollar into cryptocurrencies. Why? Several reasons: one, I have zero expertise, knowledge or experience in this new industry and two, the concept—though a promising one—sounds like a scam.

Why I believe cryptocurrencies are a scam is because of my understanding of currencies in general. Only governments of nations can issue “legal tender” currencies, and those official currencies are supposed to be backed up by the assets of whatever currency that government is producing.

What government is backing up, approving, guaranteeing, or issuing, say, Bitcoin? And simply because Bitcoin and other cryptocurrencies are being successfully exchanged does not insure they are legitimate.

Could I be wrong about crypto currencies? Certainly, and I’m probably am, but at this point in the game, I’m glad I did not jump on the crypto bandwagon.

“Who is rich? He who is content with his portion.”

And there is no doubt savvy investors in Bitcoin and other digital currencies are profiting handsomely, many becoming fabulously wealthy in the process. They get in on the ground floor, make their profits, and then get out before the inevitable crash. That takes skill, knowledge, and timing that I’ve never been able to utilize in this kind of investment arena which is why I lost so much money trading stocks.

Something else I’ve also learned about investing: we are attracted, like bugs to lightbulbs, by things new, technology orientated, and unfamiliar to us: crypto is a perfect example. The concept is so novel and exciting that people—many who are unsophisticated investors—are attracted to its obvious potential. And since most of us are prone to greed and “get rich quick” schemes, we become suckers for con-artists and charlatans—like Sam Bankman-Fried and his merry group of twenty-something con artists.

Crooks seem to grow out of thin air—they are everywhere. I no longer answer my phone and have not done so for years because of the incessant robocalls. It is is set to silent and calls coming in go immediately to my voice mail where I can screen them. I’ve become so cautious I no longer click on links from an email even if it appears to be from a legitimate company for fear I am being scammed into clicking on a phony link.

It’s tragic what has become of our society where criminals have such free reign to rob and deceive us out of our hard earned money. One of the best decisions I made was when I went through real estate school and learned the concept of “due diligence.” It is a concept that requires an individual interested in purchasing something to do the necessary required research and investigation before plopping down their hard earned money. “Buyer beware” is a closely related term.

Lastly, I believe a sound bit of investment advice is one that is as old as the hills: don’t put all your eggs in one basket. In the video above, at timestamp 10:20, it alleges that Tom Brady, the famous quarterback, invested his $650 million dollar fortune into FTX. To say this another way, if this is true, Brady just lost his entire fortune; a lifetime of hard work went down the drain in one day. One day. Along with a sizable chunk of his now ex-wife’s fortune.

Why would Brady do such a foolish thing? Again, I don’t know if this claim he placed his entire fortune into FTX is true, but let’s assume it is accurate. What possessed him to do this? And why his entire fortune? Wouldn’t prudence suggest investing your entire life’s fortune into one “company” be foolhardy and an unnecessary risk? Why not, instead of placing one’s entire fortune in any one single company, only putting, say, $300 million? Then, if it goes south, you still have $450 million left over, right?

This story about Brady is unbelievable and, quite frankly, stupid if it is indeed true. Why would someone risk 100% of their wealth on one investment, whether it be a certain stock, business venture, real estate deal, or an unproven crypto venture run by an unkempt twenty-something in a t-shirt and shorts? This insanity truly boggles the mind.

Finally, a quote from the “Ethics of the Fathers” which resonates with my soul and is full of wisdom:

“Who is rich? He who is content with his portion.” Some translations put it this way: “Who is rich? He who is satisfied (or happy) with his lot.”

Part of happiness is being grateful for what we have and being aware that discontent with our portion in life appears to be hardwired into our DNA; it is the wise individual who understands the grasping and the “always wanting more” dark sides of human nature—and who can tame this beast—who experience a great degree of happiness and contentment.