5 Biggest Investment Ripoffs to Avoid ❌(shady scam alert)


100 comments

I think you missed one BIG Rip off. I'll never buy one but I know some people who have. Timeshares. They try to sell them to you and say they're an investment, but to me I don't see how they work. The only thing that I can see is that the person who sells the timeshares gets a commission? Or the company gets a steady flow of income from you as you faithfully pay payments on your timeshares. It is real estate that is not yours, and does not make you money. Maybe you have heard of horror stories about people being stuck with timeshares they bought while on vacation, and now want to get rid of them

Jeff, I bought whole life with investment and active manager that was advice to me. I look them l lost money. Should I cut loose? Stop pay this?

I don’t know how to invest so I went to a financial advisor – and the first thing he offered me to buy is the A share mutual funds🤦‍♂️

Amen on the Whole Life policies. NEVER saw a client where it made sense. I can lump VULs, UL policies in the same category – 90% of those don't make sense either

I think the Personal Banking or Infinite Banking is one of the worst deals for consumers. I would like to hear your take on this concept.

big question here. if you have a whole life policy and you know they pay you back after two years and continue to pay you monthly like aflac. how do you know its a good move to keep it?

What should reasonable fees be for a financial advisor? I'm with Merrill Lynch now and the fees are killing me as the market is tanking. Like taxes the fees keep deducting. I don't mind paying for advice, I just need to know what is reasonable. I went to ML because I was recently widowed and it was large and "safe." Now I'm wondering…

But then you promote fundrise.. which is illiquid for the most part. Takes 5 years to get a non penalized return

A written summary of the topic in the description? Brilliant. That is what I am missing with EVERY video. Thank you. Great job.

Hey Jeff…long time viewer, first time commenter. Love the content! I am an entrepreneur and currently have no 401k or IRA. I have real estate and cash. I wanted to put money in a place where I would gain more than my bank account and not have any losses….SOOoOOoooo I bought an IUL for myself from myself. I understand the cost but I’m ok with that as long as I know I’m not losing money. Happy to hear your feedback.
-Enrique

speaking of #5. I know someone who pretty much guaranteed they guy 30% return if he went with and IUL policy. He is an agent with FEG. I commented on the post and said "if it's too good to be true, then it probably isn't!" The guy is an insurance agent.. but he was pushing selling as an investment and the guaranteed returns, talking about caps and floors. Also stated the investment was regulated by the federal government. Ridiculous! SMH!

I thought life insurance agents CANNOT in their pitch sell any life insurance products as an investment?

I made the mistake in my early 20's of buying a Front end Loaded Mutual fund but when they asked what I thought I would put in or be able to save they made me sign it so when I got pregnant and sick and didn't put in as much as I planned I got a BILL for her "promised commission". This was at my local bank. Basically because I had so much cash in my account I got the "Oh, you should sit down with one of our bankers to grow your money" and I was completely uneducated and maybe 21 yrs old but technically an adult. Then I got the "Talk" and the pretty graphs and how I could be a home owner in only a few years and such. Not only was there a 5% up front Load fee but the Mutual fund operating costs were 2%+ when I actually educated myself about what a mistake I made. I would estimate I lost about 8k on that mistake but at least I was introduced to
My MIL got screwed by the ANNUITY salesman. They are wealthier and invested about 500k and after fees, losses, and learned that they didn't have their money or access and what mistake they made they lost about 100k. ANNUITY FEES are INSANE!!!!
I did not use a licensed contractor as he mis represented himself and I didn't confirm his license with the state. If I had I would know he had three judgments against him already. We had lost 10k in him to the shoddy work and hours of sleep and he actually cursed me out on the phone multiple times but . . . . . . . . . it was the cost to actually fix it and have it undone and done correctly was 52k on a house. Had to rip down the sheet rock and redo the electrical and plumbing. State did file another cease and desist and another strike against him but even though we win in small claims court to get our 10k, He already had like sooooooo much in other liens, like from the state, They will get their money first. We won but we know that we will never actually see a penny from him.

Why is a Roth IRA better then a index universal life Insurance policy for a savings/retirement? I’m getting ready to make my first investment and I’d like to understand why ULI is a scam over Roth IRS?

He made multiple mistakes/omissions in this video.

1. Loaded Mutual funds: While its true that charging a big commission up front, like 5.75% (hence "loaded"), the commission in the following years generally decreases to a fraction of a percent, such as .25%. So lets do the math using a $100k investment. You would pay $5,750 in year one and every year after that you would pay only about $250 (100k x .0025). By year 10 yo would have paid a total of about $8,000 in commissions. Compare this to your typical mutual fund that charges a flat 1% fee for assets under management. Using the same 100k, your first year you would pay 1k in commission and about 1k for every year thereafter (obviously it'll be more than 1k because your 100k should be earning about 8% interest per year). Therefore, by year 10, you would have paid $10k or more in commission. So the Loaded MF is $8k in commission over 10 years while the regular mutual fund is $10k over 10 years. As you can see, front loaded mutual funds are not a scam, just structured differently.

4. Whole Life Insurance: I think he has a fundamental misunderstanding of how life insurance works. Term is like renting an apartment while Whole Life is like buying a house. The WL builds equity (Cash Value) in the policy with the Death Benefit increasing each year as the cash value increasing. WL policies can be used for many different reasons, but I will agree that they are not right for everyone at every point in their life. He also mentions that their can be a dividend paid by the WL policy which is typically 5-6%. Its true that this is gross and that the cost of insurance can be 1-2% of that, but mutual funds do the same thing. If you deduct the taxes and fees you will pay over the life of the mutual fund and during the period of distribution, you will not actually be earning 8%, it is more like 5%. Finally, in my opinion, whole life insurance should not be viewed as an investment tool, it should be viewed as a bank account. If you earn 3-4% interest on a bank account, I think we would all agree that that would be pretty nice. Also, you money is at zero risk in a life insurance policy and you can take loans against the cash value. So essentially WL is like a bank account with a death benefit…not a bad deal. Final point, "buy term and invest the rest" is a myth. There are many videos on YouTube doing a side by side comparison of WL and Term and showing how Term is more expensive in the long run with nothing to show for it.

5. Universal Life: This guy doesn't know what he is talking about… He mentions there is a Cap on the UL, but he fails to mention that there is a floor, which means that the Life insurance company will guarantee a minimum amount of interest every year (like 3%). There are many more reasons why UL can be a great strategy such as tax benefits, loan provisions, etc… but again its not for everyone. It absolutely is not a rip off if structured properly.

In conclusion, Jeff is a good guy and I like his videos, but he isn't always right, especially when talking about life insurance. At the end of the video he says he knows a lot of people who have been ripped of by WL or UL, but he couldnt possibly know if it was a rip off if he doesnt understand all the benefits of the policys and exactly how they work. They may have been a rip off if the Agent/advisor did not structure the contract properly. Finally, Yes opening a ROTH IRA is a basic first step if you are not above the income threshold. If you are, then UL could be a great option.

Other than that, keep up the good videos Jeff.

You stated there are tins of mutual funds that operate this way……how is it a rip off???? Its called broker fees. This is not a Non profit.

This is the problem with Youtube. People giving advice that don't know sh*t but base their advice on their limited experience. Bro…read Nelson Nash's book (Becoming Your Own Banker) from cover to cover, THEN give your 2 cents on whole life. BTW comparing whole life to term is NOT comparing apples to apples.

Have to take issue with #4, but I agree with you on the investment angle. Whole life policy as an INVESTMENT vehicle is terrible. But WHO believes insurance is an investment? Term life policies only last for 20-30 years, depending on term selected, and when it is done, it is over and you have to re-qualify for a new policy, at 50-60 years old, after dealing with whatever ailments you have suffered, and likely to be at 10 times your original cost. You can't spout off "these new ones don't require a doctor", well… they don't require a lawyer either. Please clarify your position before a bunch of 70 year olds stop payments on their whole life policies and end up screwing themselves.

Name someone who made tons of money using whole life or IUL. None. Thats right because life insurance should never be used as an investment vehicle. You the policy owner should always have full control of your investments. I can guarantee you that more than 90% of policy owners have no comprehension of their policies. The agents persuasion was just too good. Once they made their commission you're as good as dead to them.

In another video on how to invest 500.00 you talk about FUNDRISE, isnt that essentially non traded REITS which are illiquid?

I broke even 10 years later when I cancelled my whole life insurance policy. It was sold to me when I was 18 years old. Clearly opportunity loss. Hate that product. What I hate most about whole life insurance is when you die, guess who gets to keep the “cash value” of the policy?

You do realize you get to keep the cash value of the premiums you pay in Whole life, granted that cash value is less than your accumulated premium costs early on but evens out later. It’s like buying a home vs renting. Not to mention your cash balance grows with dividends and all disbursements are paid out tax free and you can even take a non-structured loan against your death benefit to leverage other purchases if you’d like. It’s rly not a bad product, misunderstood. Research LIRP. But I agree definitely not for everyone, Like annuities.

Jeff, what about Fundrise? I have heard you speak about this company positively on other videos. However, in this video you include non-traded REITs as being bad because they are illiquid. Is Fundrise good or bad?

Timeshares are RIP offs!!!!. They will bill you and when you try to use the best location they will say it's not available..but a regular person trying to rent that same time it will be available..this way you are paying the contract without use..and they get paid by the non owner to use the location.. now the timeshare companies make twice the price..or even 3 times the price..

You are an Idiot  Jeff Rose… there is a cap for the IUL product to offset any losses. Ive had a 401K account and lost it all due to the 2008 bust… yeah… maybe there is a cap but at least I wont lose the principal. you don't get all the upside.. you just get no downside in the IUL… you are a liar

Thank you for your video. I have suffered a lot. I don't buy anymore insurance because they are all crooks looking for easy way out to live off people's ignorance . I closed the door so tight on insurance.

A Forex course from Market Traders Institute. I paid a little bit more than $3,000 to learn to trade using Fibonacci method. I would have done no worse reading tea leaves to trade. Market Traders is a complete scam up selling their over-priced software.

Lmao 401k over an indexed universal life policy? 😂 you must be joking. It's not how much you earn, it's how much you keep

Here is additional info on ripoff#4:
U.S. treasury decision number 1743

Dividends declared by a participating companies are not dividends in a commercial sense of the word( but are simply refunds to the policyholder of a portion of the overcharge collected).
In other words, the 5.7% example isn’t even a real dividend.
Good info. Keep it up. People need to hear this

bought an IUL two years ago. thought my cash value was building up, but nope, after investing 22k in two years my cash value is only 4k. my money is being eaten up by the cost of insurance aka fees. Agent says fees are so high because the death benefit is high. they sold me a fantasy policy with numbers so outrages that i was absolutely livid when i studied the insurance illustration, complete fantasy land numbers. I thought this policy would be a retirement fund for me, but it will not, it will just be a bill I will be paying for the rest of my life. I am currently getting out of this pos policy. and the guy who sold me on it, WAS a family friend. wow..

Just curious Jeff, in what situations would you see permanent cash value- life insurance making sense? Assuming the client is maxing out 401k/roth.

Yeah, I got ripped off on my Fixed Whole Life Insurance, when I should have gotten a Term Life Insurance. After a few months of learning about Life Insurance and IRA, 401Ks, and other financial products, I am happy that I canceled my policy, but still interested in getting a term life insurance.

Would you consider Rich Uncles a collection of nontraded REITs? I see that they have a descending fee structure based on how long you've owned the share – down to 0% after 3 years.

i invest in different platforms and in real estate. to the youtube community; the only thing i regret is not starting when i was broke and understanding the concept of paying yourself first even when that meant the bills might not get paid.

The only part of this I disagree with is the actively managed index funds. Sure with passive index funds you capture 100% of the gains, but also 100% of the losses over time as well. Its worth the difference for some people to have an index fund actively managed for stop/loss considerations over time.

Whole life only really makes sense if you are given the option to front load it, AND you have so much cash you have no idea what to do with it and want to shelter it's returns from tax AND you've maxxed out every other account type.

So… 99% of people – NO. Bad! Don't touch!

Whole life insurance has a cash value not just the insurance. So what that means is if it's structured right you can borrow from your policy at a lower return rate than you would get from any Bank.
Also as you mentioned there is an interest and yes the cost of the insurance with heat up to interest. But the point is if it's structured right after 5 years you're not even paying into the shorts anymore and you have the insurance for life. But when you are 30 years old and you finished 30 years on a term insurance when you reapply for insurance that insurance is not going to be $21. In fact is going to be way more

I have this F***up brother in law who joint this MLM company called Premire Finacial Alliance (aka pyramid scheme )which is currently being sued.He sold to his sister(my wife) 1Million UIL or whole life policy w/o my knowledge costs $700/mth😖for 20yrs.needless to say when I found out about it we got in a very heated argument and demanded she cancel it right a way.

HELP…
PLEASE, PLEASE, PLEASE… YOUR thoughts on investing in the "life info" life info app business.
Is it a scam or a good thing?

Hi Jeff. I'm curious because I just got licensed to sell life insurance with a non profit company and I'm also working to become a CFA. I was under the assumption that whole life policies were good investments for young people and/or children who are in good health because they can 1. Lock in the death benefit while they're young and healthy without having to worry about being dropped or having their premiums drastically increased, like with term insurance. 2. Be paid off in 10, 20, or 30 years years and then it's permanent insurance that will never go away. The cash value benefit is just an added bonus. I just bought a whole life on my daughter who is 6 years old, it's $44 a month, and it will be paid off when she is 26. And it will continue to build cash value as long as it's in force. If she cashes it out when she's 26, she will have about 12,000 in cash value for college expense or whatever. But she could also just leave and let it grow until she's 36 or older and use it as a retirement fund or even roll in into a Roth IRA. So my question is, is this a good investment for children? I want to be an honest agent and I don't want to rip people off in any way. I want to make sure I'm actually offering them the best option for their situation. If you treat people right, they'll be a better customer than if you trick them just so you can make money.

.. there must be no value in creating your own LLC for creating your own tax exempt whole life policy and having an independent underwriter create a policy for you …

Whole life is good for Infinite Banking. You can also lower the commission cost by going through programs directly from an insurance company.

I’m trying to do research on Agora Financial and all their so called “Newsletters” or “Automated Indicators” like The Real Money Indicator by Dave Gonigam on Agora Financials newsletter called “5 min. Forecast. Any info please let me know. They basically shove emails down your through with all kinds of gurus and big researchers claiming they have the best picks to send you with really good % win rates.

The 401K is the worst investment it really benefits only the employer because they pay none of the fees that 401k buy and holders have to pay plus 100% of whatever the future tax brackets going to be on both the capital and capital gains while also getting affected by the market like in 2008 which by the way income stream from a 401k and Ira is negatively affecting retirees by taxing their Social Security benefits as well

Jeff, If you have any clients that are thinking about buying a Whole Life Policy, have them ask the Agent what the Surrender Cash Value is on that policy anytime in the first two years. It's during that time that the Life Insurance Company is paying the Agents commission. That's why the Surrender fees are so incredibly high for the first two years of the policy.

If you haven't ran numbers on an index universal life products I don't really think you qualify To try to educate the General public On the product most people that Talk Bad about IUL do not even have a license to sell it or don't even know how the product works inside and out And the unique advantages Over traditional tax qualified plans

Wait….wait….I want to throw my 2 cents in here…. I will watch the rest of the video later, buuuuuuut loaded mutual funds is my first disagreement. Alright sorta…..

You focused on the expense, but never mentioned anything about the quality of the advice. Never mentioned anything about the quality of the strategy. Never mentioned anything about not the months and/or years of analysis work that a representative does for free in hopes that the client will go ahead and trust and invest in the recommended strategy.

Sooooo….yeah….I disagree. It is a long term relationship.

Sooooo…yes, there is a such thing as a no load mutual fund where there is no commission charge. There is a such thing as big companies with no load mutual funds where clients can call and get assistance with making an investment.

Sooooo…to focus on the expense without discussing the value add that a quality financial advisor can bring to the table is outright misleading.

Nooooow…. there is a such thing as an investment advisor representative that has different ways of being compensated for their services. Soooo… if a client wants to pay an hourly fee or a percentage of their assets to invest, that's fine, buuuuuuut that is not what we are talking about here…

So…back to the loaded mutual funds…. Let's use your numbers…. Just take your numbers and divide that over however many hours you think it would take to do a quality investment analysis and then double that number if u are being ultra conservative in your calculations. And don't forget, you will need to redo that entire analysis for one of two reasons….The first, the client's financial situation has changed and you need to go a different direction. That also includes that a family emergency has come up and it is big enough that their financial situation has changed so guess what, u r eating that time and energy to develop that strategy recommendation. The second situation is that it took so long to earn the client's trust for the recommendation so you have to do updated numbers to make sure the investment is still suitable for the client.

I have more to say, but I will likely delete this later. I am just up on YouTube….lol…

Soooo according to you, there should be no loaded mutual funds and everyone should be required to go to the mutual fund companies to get their advice. If a representative is not able to earn a commission, then why would they service the client?

I don't want to put words in your mouth, buuuuuut all I heard was why loaded mutual funds were so bad. Did you discover a different way that folk could earn a commission?

Welp…..gotta go….Y'all who disagree with my feedback better respond b4 I delete this….lol…

Good night….

In this video you tell people that's it's stupid to buy non-traded REITs and then 5 months later you make another video comparing your Fundrise (non-traded REIT) investment vs. Lending Club. SMDH

So where we could invest in the retirement plan besides the 401k and Roth IRA.. where we could invest for college funds .. honestly I thought the IUL wasn't that bad, comparing to saving or 529 ? Am I totally wrong?

Agree with Astrit (below). The author makes some good points on 1-3 (though doesn't tell the entire story). As for #5, the IUL, he doesn't seem to have a complete understanding of the product. What other investment credits you during the 'up' years yet gives you zero (i.e. sideways) during the down? The IUL. And, yes, if your horizon is <10 years, it's not a good idea. But, if you have 10 or more years till retirement, pack as much cash as you can into an IUL.

I am a divorced Dad and I am desperately trying to find a way to accumulate funds fast for my daughter who just finished high school, and is taking a break before going to college next year. I want to surprise her with a decent car when she picks a college so that she can focus on her studies instead of a car loan and student loan. After that, she is on her own but I will always be there for emotional support. I waited so long because I had to pay my ex wife a large child support for years but now thank God its over. I wish my ex had invested for her college but her irresponsibility is one of many reasons for divorce.

Wow I just watched Video on Life Insurance And He said They Don't Offer Whole life Insurance. The Return is 5% And you Can Borrow Tax Free its untouchables. Investing in Stocks is Big BILLIONS Not Enough Honest People in wall street This why Folks hide Money in Caves.

I definitely got scammed 1900 dollars lost and what’s sad is I never made it back the account is making less money than my money market account. I am having better success with betterment. Any advise I need help.

I recently purchased a whole life policy at the beginning of this year and was shown an index universal index life policy projection just today. The UIL looked more attractive for the reason you mentioned in the video: “you can get the ups but no down” while the whole life looked less attractive at only a 4% growth rate. Should i pull the plug on the whole life after paying on it for the last 11 months and skip the whole UIL altogether? (I have not opened a Roth IRA as of yet). Thanks in advance!

1-3 make sense, Whole Life makes some sense here, but the IUL piece was just…way off. You left off the protection from down markets — a huge piece. And the overall fees over time are no different than financial advisors making 1% or more perpetually. Insurance fees are front-loaded, financial advisors take money all along the way (and of course it becomes A LOT as one's wealth grows). No one I know says you'd get "all of the upside, none of the downside." Straw man alert! I expected more from Jeff.

Our company's group RRSP (401k in US) matching plan is vested in a S&P 500 index fund for 2 fucking percent. Like I have a choice but to bend over and hope they use lubricant.

I totally agree with you. But 20 years ago as a young insurance agent I had people with no license argue term vs. Whole life with me so I gave what they wanted. The question I have for you is what about people who aren't exactly insurable in the term Market who need burial insurance the only option that we seem to have is a final expense policy that you and I both understand is nothing more than a whole life policy please advise.

I was just licensed as an insurance agent. In the training from the insurance schools, they tell you that after 3 years, you can take money from your whole life policy because X dollars will be there.

I saw you mentioned americanfunds, I have 3 questions if you could please answer them. 1. I was sold the ABALX is the same as American Growth Fund?
2. Does the advisor who sold me the fund get paid every time I buy shares?
3. I've been on this fund for over 6 year's what should I do?

Thank you for all that you do.

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