My Investment Advice

While we were visiting family in Utah, a friend of theirs called and said he wanted to come visit. That "visit" turned in to a sales presentation. I have been thinking about that experience and it has prompted me to want to write this post about how to make wise investments. Here are my guidelines.

1. Just because someone is a member of your church, or friend of the family, or former church leader does not mean they automatically are selling a good product.

My home teacher, or former mission companion may truly believe that the product they are selling is good, but they are still human and can be deceived. And Christianity is no guarantee of honesty. We all hope that Christians are honest, but in reality, everyone has weaknesses, and honesty may be their weakness.

John W. Hardy, in his article, "Recognizing—and Avoiding—Bad Investments,” Ensign, Sep 1983, 55 said of members of our church,

"Another reason Latter-day Saints succumb to fraudulent investment schemes is that many of us think, some quite falsely, that we are good judges of people and their intents and can easily judge between good and evil. We tend to be very trusting of other people.

In investment matters, many Latter-day Saints have a certain amount of naivete. Perhaps their missionary attitude and desire to love all men causes them to be overly trusting. Even so, the Savior teaches us that we must be as wise as serpents in conducting our affairs. (See Matt. 10:16.) When we make an investment, we are not playing with play money. We are investing hard-earned dollars.

We need to go the extra mile in identifying the credentials of the individual taking our investment dollar. We need to carefully study out in our minds the nature of the investment. If we feel uneasy or feel we lack the ability to analyze an investment, it may be worth the cost of paying a financial expert to give us independent advice about the investment before we invest."

2. Be wary of those who sneak in a sales presentation.

To me, it is a deception to make an appointment to "come visit", while having the real motive of making a sales presentation. This man in particular even went so far as to pretend he wasn't making a sales presentation, but was just doing "public service announcements". He said over and over he was only going around trying to make people aware of the problems. But when push came to shove, he was more than happy to share with us his solution that would only cost us $59.95. Actually, I don't know how much it cost because he never would say the price. Pretending one thing, but having an ulterior motive is deceptive and dishonest. Period.

3. Be ware of salesmen who try to sound knowledgeable, but don't even know the correct vocabulary.

This guy was giving his "public service announcement" about the danger of cell phones, and other devices that put out electromagnetic waves. He said, "The 3G phone that they have today put out 3 Gigahertz of power, and it is all concentrated at your head." At this point I had already walked out of the room and was in the adjacent kitchen. I couldn't stand to listen anymore. But when he said that, my husband reached his melting point. He stood up and said, "First of all, 3G stands for "Third generation", NOT 3 Gigahertz." The man said, "That's what they tell YOU!" My husband left the room, but not after making a comment about "Snake oil". But I noticed that then the man changed his vocabulary and began referring to the "Third generation" phones.

This man just happened to have a lap top and DVD for us to watch about the dangers of electromagnetic frequencies. Most of the video he showed was clearly from the 80s or 90s. It clearly was not a DVD made in the past 10 years. It included a clip from 20/20 that showed a report of the dangers of cell phone use, and the risk of brain tumors. I think I saw that report when it originally aired. It showed men using the 1G cell phones that looked more like a walkie talkie. But the dating of the DVD made me question whether or not their data is current. Who knows but what cell phone technology today is improved in this area.

He said that he was diagnosed with "Bell's Palsy", but he thinks his nerves were damaged by energy waves. I said, "Well, Bell's Palsy is a virus." He looked confused and said, "It is?" Kind of hard to catch a virus from energy waves. He said he had therapy that restored the use of his face. He is convinced that if he had only found his company's solution sooner, he wouldn't have had the paralysis in his face. His testimony might be convincing to some, but not to me because he didn't even have a clear understanding of his own illness.

4. Beware of salesmen who use "Scare tactics"

This focus of this entire presentation was to make us absolutely petrified about the possibility of getting cancer from too many electric currents running through our bodies. Now, I'm not discounting that there could be some truth to this. I don't know the effect of cell phones being pressed to the brain for hours a day. I have also heard that people who live under a huge transformer also have more health problems. But my problem comes in his solution to this danger. After telling us about this dangerous threat to humanity, he told us that his company makes a pendant that they claim will repel the unwanted energy waves. Sorry, but If we have "3 gigahertz" of energy swarming around us, I hardly think a magic amulet is going to repel it all.

5. Beware of companies that use multi level marketing.

When I was a teenager, I was exposed to "Amway". Even as a young girl, the idea of making money in that way didn't seem right. I could see that only a small percentage of people were making the big money at my expense. I rejected multi level marketing then, and I still reject it today. Part of why I reject it is that it plays on people's greed. They want something for nothing. In that same article, John Hardy said, "Few individuals are immune to the temptation to make a fast dollar. We often are affected with a desire to “keep up with the Joneses.” The Lord described some of the inhabitants of Zion in the early years of the Church as persons who “seek not earnestly the riches of eternity, but their eyes are full of greediness.” (D&C 68:31.) The Lord has counseled us not to set our hearts upon the things of the world, but to seek first the kingdom of God. If we do this, all else will be added to us.

To avoid investment fraud, we must first avoid greediness."

6. If it sounds too good to be true, it probably is.

There is no one panacea for all financial problems or illness. When we are experiencing trials we tend to want a quick fix. But when we have serious problems, there are no easy answers. We need to be wary to not be gullible in our time of most vulnerability.

I have been exposed to many companies over my life time. Some weren't necessarily multi level, but were marketing products that were supposedly better than products found in the stores. That may be true, but the price was also well above the prices in the stores. No offense to my family and friends who sell these products, but here are a few I have been offered a sales position for.

--Amway
--Mellaluca skin products (backed by a prominent Osmond brother, who actually made the presentation I attended.)
--Trichromalean diet pills
--Avon
--Tupperware
--Energy egg (supposed to keep your vegetables fresh for weeks...mine already are)
--Laundry ball (somehow ionizes your water so that you don't use laundry soap.)
--candle companies
--rubber stamp companies
--pampered chef
--baskets
--Mary Kay cosmetics
--Another cleaning product line that I can't remember the name of.

Some of these companies even require that you, the salesperson, buy a certain amount of their products each month. Basically, you are paying your own salary.

There are many good articles in the church magazines about avoiding consumer and investment fraud.

Karianne Salisbury, in her article titled, “Protecting Family Finances by Avoiding Fraud,” Liahona, Sept. 2008, N4–N6 gave some other important guidelines. She said, "An opportunity that requires an immediate response is typically a clear sign of fraud. Someone trying to sell an opportunity may try to persuade by saying it’s the chance of a lifetime or only a certain number can participate, but the need for a quick decision means there is little or no time to think about the commitment or to check the background of the investment.

Elder M. Russell Ballard of the Quorum of the Twelve Apostles emphasized the importance of carefully evaluating financial decisions in a 1987 general conference address.

“There are no shortcuts to financial security,” Elder Ballard said. “Do not trust your money to others without a thorough evaluation of any proposed investment. Our people have lost far too much money by trusting their assets to others. In my judgment, we will never have balance in our lives unless our finances are securely under control” (“Keeping Life’s Demands in Balance,” Ensign, May 1987, 13).

Fraudsters will try to create a sense of urgency to encourage investors to jump in before various concerns or anxieties can settle. It is important to take the time to carefully consider each aspect of the decision. A quality investment opportunity will be around long enough to allow the time needed to fully contemplate the options."

I could probably write much more on this subject, but this will suffice for now. There are many church talks given about the subject of avoiding investment fraud. A search can be found by going to www.lds.org and clicking on Gospel library, and search the subject.