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Old 06-17-2014, 12:50 PM   #61
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A while ago, probably mid 90s, the engineering manager of one of my principal clients called me and said he had a business idea he wanted to discuss with me outside of work. He was a smart young engineer and as a software consultant working on embedded systems, I was often approached about business ideas (usually meaning they wanted me to work for free on some pie in the sky idea). He wouldn't tell me what it was on the phone, even after my pressuring, he said he wanted to take me out to dinner to discuss it. I figured it was some new product he wanted to do and didn't want his employer to know. At dinner I of course asked what his idea was. But instead of telling me he started asking questions something like, "What is it that you want to achieve in life." I started thinking OMG, what am I going to do. Normally I would just tell someone like that exactly what I thought. But this was the engineering manager I had to work with at an important client. Of course eventually he got around to Amway. I really couldn't believe it at first. Here was an intelligent EE, what was he doing trying to get into some MLM scheme. I really didn't know what to do, how to say no politely. As I remember it, I just let him talk and told him that I was too busy now, but maybe later. We worked together for quite a while after that but I never heard about it from him again. I guess he figured it out on his own. Just wonder how much money he lost in getting his education.
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Old 06-17-2014, 01:15 PM   #62
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Pink sheets
Limited partnerships
Mutual funds
Private equity
Real estate
Profit-taking on stock sale
Leverage

I have tried them all at various times in the 70s/80s, losing money at times. Fortunately, it was before I had serious money to invest. I made money on some of them BUT the advice was always bad for self-serving reasons. It is possible to make money in all these ways, but you have to work at each one.
60's/70's - Dean Witter broker et al - I escaped private equity. Unfortunately early on 66/67 profit taking got me my first sports car.

heh heh heh - Bogle's Folly starting about 1977 in my 401k ended up being the lead sled dog while I was foolishly being a legend in my own mind until finally the light came on.
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Old 06-17-2014, 01:20 PM   #63
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Was definitely during accumulation...around '04 or '05.


Yeesh.
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Old 06-17-2014, 05:02 PM   #64
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Jim Cramer - Does not this guy dish out worse advise everyday? He contradicts himself over and over. His advise made me loose 30K in a day in March 2008 - Bought Bear Stearns a day before it was sold to JPM for $2. He kept saying the book value of this company was above $100 and stock closed at $30 that day. It was a double whammy for me as I was also working for Bear and lost my job later that year.
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Old 06-17-2014, 05:27 PM   #65
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I'm always being told by 1 sister and bil that I should get out of the stock market in all accounts, online trading, 401k & ira. They keep their money in a regular bank savings account and bank cd's. They keep saying at least they won't lose any money.
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Old 06-17-2014, 05:50 PM   #66
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I'm always being told by 1 sister and bil that I should get out of the stock market in all accounts, online trading, 401k & ira. They keep their money in a regular bank savings account and bank cd's. They keep saying at least they won't lose any money.
Except in real money terms they are not keeping up with inflation, so in effect they *are* losing money.

I concur that they have terrible advice.
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Old 06-17-2014, 07:31 PM   #67
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Except in real money terms they are not keeping up with inflation, so in effect they *are* losing money.

I concur that they have terrible advice.
I did mention the inflation word and the fees they pay when they keep rolling the cd's over into different banks. They feel "safe" and think I am foolish. We all have a risk level.
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Old 06-17-2014, 08:17 PM   #68
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It resulted in less after-tax value than investing outside an IRA, aka the IRA trap.
Deductible IRA? If so, how does your marginal tax bracket when you made the contributions compare to your tax bracket when taking distributions? For me the IRA is a huge winner as I saved 28% federal to pay 7% federal.

I can see a point if it is a non-deductible IRA, but for most people they come out ahead with a deductible IRA though I concede that 0% qualified dividends and LTCG narrow the advantage - but who could have anticipated 0% LTCG and qualified dividends?
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Old 06-17-2014, 08:53 PM   #69
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"Internet Stocks!" in 2000.
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Old 06-17-2014, 09:15 PM   #70
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Mary Kay (still going on). DW was approached a few years ago but listened to me and backed away. Housewife up the street fell for it and her hubby spent over $3K on the base inventory. Now she will have cosmetics for the rest of her life!

(Someone forgot to tell her she had to be a high pressure salesperson)
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Old 06-17-2014, 09:28 PM   #71
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Since we're sharing Amway stories.... My first close encounter was my brother. He called me out of the blue and spent an hour describing his wonderful new business and that I should consider joining it. He dropped enough hints that I asked him point blank if it was amway - he kept changing the subject. Eventually he said it was. I told him to talk to me in a year and show me his success. He pinged me periodically over the next few years - I nipped the conversation every time by asking if he'd declared a profit or loss on his taxes. It was always a loss. He'd have excuses that he was writing off things to make it a paper loss. I'd ask if he spent more money than he made - or was he cheating on his taxes... He got so angry that I wouldn't drink the kool-aide that he eventually stopped speaking to me. for a few years. Amway caused a riff in our family.

My next encounter was with a coworker. Like CaliforniaMan it was a very smart EE/embedded systems engineer, Sam. He would ask folks out to lunch at work - and hit them with his spiel. We started comparing notes. Eventually we started calling these lunch invites "invitation to Samway". I'm not sure he signed anyone up.

The company is very profitable for the folks who sell inspirational seminars and videos to aspiring amway salesfolks. That's where the real money of amway is.
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Old 06-17-2014, 09:55 PM   #72
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Bought Bear Stearns a day before it was sold to JPM for $2. He kept saying the book value of this company was above $100 and stock closed at $30 that day. It was a double whammy for me as I was also working for Bear and lost my job later that year.
The privately-held company I worked for had an ESOP that ran out of steam around 2003, so management took the company public. A locally prominent financial adviser urged us to hang onto all of our shares after the IPO ... and we listened. Dumb! But the financial wizard told us what we wanted to hear. He had about a dozen of my co-workers dancing to his tune -- we all had big blocs of stock.

When my wife and I finally divested, the share price was 40% of the IPO price. If we'd sold half our shares at the IPO we'd be $200K richer.

We were fortunate compared to many co-workers who had gone into the ESOP heavily leveraged. They were ruined by margin calls when the bottom dropped out of the market in 2008. And, I kept my job in the ensuing rounds of layoffs -- a lot of co-workers didn't.

The advice to hang onto a heavy investment in company stock is the only time I've ever paid for financial counseling. Sometimes when I'm in a dark mood I wonder if my guru wasn't shorting the stock on the side. But I have to conclude that he wasn't crooked, he was just a bonehead -- like me.
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Old 06-17-2014, 10:11 PM   #73
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Old 06-18-2014, 10:28 AM   #74
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Old 06-18-2014, 12:10 PM   #75
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Guy I was dating when I was a sophomore in college: "You have to carry a balance on credit cards so you'll get a good credit rating". I've never carried a balance on credit cards. I've also never been turned down for credit except during some years when bad stuff my first husband did affected my own credit rating.

"Buy the best house you can afford". This was the conventional wisdom in the 1970s and 1980s. I lived in northern NJ till 2003 and it was really all I could do to afford a house in a decent neighborhood. I probably could have borrowed more after my divorce in 1997, and I did make a fat profit on the house I bought, but when DS needed private school, I was able to afford it because I wasn't mortgaged to the eyeballs. When current DH and I moved to a LCOL area, we didn't buy anything near what we could have afforded. Didn't need it. Having retired a little earlier than expected, I'm grateful we're not stuck with giant mortgage payments and property taxes.

Yeah, I got the Amway pitch, too, when I was in a short period between jobs. Guy from my church wanted to meet and tell me about a "business opportunity" that would let me spend more time with my son and had flexible hours. We met at Starbucks and I knew something was up when he asked for the receipt and carefully filed it away. I hate selling, so that was easy to turn down.
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Old 06-18-2014, 02:38 PM   #76
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It must be really poisonous Kool-Aid, since many Amway stories end with "my relative/friend was angry with me for not joining, tried to make me feel guilty," etc.

It's no accident that Amway adherents refer to it as "The Business," as if they were doing secret work which musn't be openly named. I had another relative, with a pompous streak, who loved to put in those verbal quotation marks when she talked about how well "the business" was doing. Yeah, they give you "the business," all right! LOL

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Since we're sharing Amway stories.... My first close encounter was my brother. ... He got so angry that I wouldn't drink the kool-aide that he eventually stopped speaking to me. for a few years. Amway caused a riff in our family.

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Old 06-18-2014, 03:04 PM   #77
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One more bad advice post. Few years back I was talked into paying for a stock picking website (mistake #1). Paid for 6 months of stupid advice, foul language, personal insults(#2). The genius running it went by the common name of Musca domestia. Never going back there, what a jerk. Good lessons learned.
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Old 06-18-2014, 03:08 PM   #78
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One word... plastics.
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Old 06-18-2014, 03:23 PM   #79
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I had no problem avoiding Amway. My step father is a get rich quick junkie so of course got sucked into Amway.

He tried to start a red wiggler farm in our backyard (yes worms but they escaped because he forgot to put a screen across the bottom of the bins)' he paid lots of bucks for a system on how to get rich in real estate and when I was in high school he got into Amway.

They had closets full of product that he couldn't sell and he didn't have the personality to sign other people up so I've never been the least bit interested.
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Old 06-19-2014, 03:47 PM   #80
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On the eve of my retirement in 2007, a frat brother tried to convince me that when I got my 401K distribution (in a few months) I should roll over half of it into a whole life policy purchased from him.

Good thing he was a friend. I hate to think what he might have recommended me if I was a perfect stranger!
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