Friday, January 5, 2018

Faux Financial Planning

The Internet is rife with poor advice.

A reader sends me a link to a meandering 30-minute video of a chirpy young woman in what appears to be a bathing suit, standing in front of a string of Christmas lights, telling us how to pay off your mortgage in mere months.

Her "secret?"  Use cash-advances on credit cards and lines of credit to pay off the mortgage.  This "strategy" she claims, will "improve your cash flow!"  It is just all buzz-words and misdirection, but since you clicked on the video, she makes 1/10 of a cent in Adsense money.

The "strategy" is, of course, utter nonsense.   You are taking a low-interest, tax-deductible debt, and replacing it with a short-term, high-interest (some of the highest interest out there!) debt that is not tax deductible.

If you attempted this, you would likely end up bankrupt.   Maybe that is the plan - if you lived in Florida, a homestead State, they could not attach your home, anyway, in bankruptcy court.

But it is still nonsense advice - getting that many lines of credit to pay off a mortgage is hard to do - unless they are secured by the house - so you are back to having a mortgage.  Using debt to pay off debt makes no sense, unless the new debt is on better terms - and that is not the case here.

But it illustrates how people are desperate for "secrets" and "tricks" regarding finances and investments.   There are no secrets or tricks, sorry - that is the long and short of it.   You have to pay back debts, you can't double your money overnight.   Maybe Donald Trump can duck out of debts by cramming down lenders.   You and I can't.

Another video promises to "give you an 800 credit score in 45 days!" which is an interesting proposition for me - why would I want to lower my credit score to 800?   The fellow is unshaven and appears to be standing in the hallway of his apartment.  His "trick" is to become an authorized signer on someone else's credit account so that that other person's good credit rating is reflected on your score.   This might or might not work - the biggest problem being finding a patsy who will go along with this.   You see, people with good credit got there by not letting people con them in to schemes like this.   So good luck going up to a friend and saying, "Hey, why not make me an authorized signatory on your credit card!  I promise I won't rack up debt or anything!"

What was fascinating, though, was that the "comments" were all shills.   "This is great advice!" one person says, "I am going to subscribe to your channel and order your books and seminars!" or something along those lines.   All the comments were mindlessly positive because they were fake comments.  Another comments says, "I was skeptical at first, but then I saw all these positive comments, so it must be good!"

You can hire an internet company to spam-comment your youtube or blogger site to bring it up in the rankings.  For a few Rubles or Rupees, some folks in Russia or India will type in poorly-worded and poorly-spelled comments until any negative comments are "buried" and it appears there is a lot of activity on your YouTube channel or your blog - which then in turn generates more hits from unsuspecting real uses, as the video becomes "featured" as "popular".   This also generates AdSense dollars as well.

Once you click on one of these videos, you get more of them - like with my knitting experiments.  You are down the rabbit-hole of more and more horrific financial advice aimed at people who are hopelessly in debt and are not very astute.   No doubt, on a server somewhere at Google is the notation that I am financially desperate - and a patsy - and my name and contact information has already been sold to some boiler-room con artist.

Stop looking for short-cuts.   They don't exist.  If someone promises you something-for-nothing, odds are, they are going to take something from you and leave you with nothing.

Advice that seems too-good-to-be-true IS.   Anything that sounds too favorable to you should be viewed with skepticism, period.

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