As great as it sounds like a cure-all for the happiness you seek and the solutions to all your problems, it’s the opposite. There are a lot of reputable investing and personal finance websites but most of them lack information, insight and guidance on what I believe are the biggest threats to keeping our money safe. And it’s not a downturn in the markets or a recession.
It is fraud, schemes, scams, deception, scare tactics and comparison without context.
Richard Whitacre, an industrial mechanic in Pasadena, MD, got laid off from his longtime job in 2023. To make matters worse, he was diagnosed with colon cancer soon after. Then, out of nowhere, it seemed that a single investment would be Whitacre’s panacea. Through a friend, he discovered a firm called Yield Wealth and the “guaranteed” 15.25% return it was offering to investors on some products.
He withdrew his entire 401(k) from Fidelity ($763,094.21) and rolled it over into an individual retirement account with Yield, which at that time was affiliated with a firm called Next Level Holdings. Out of roughly 340 people known to have bought into an account with Yield, about two-thirds invested through an IRA or another retirement plan.
First appearing in the Wall Street Journal, “most investors know that reaching for yield isn’t wise. In this case, it appears to have been catastrophic.” – Jason Zweig ‘I Don’t Know Where to Turn or What to Do.’ His $763,094 Retirement Fund Is in Limbo. – WSJ
If an investment is presented to you with no element of risk, risk free, guaranteed, they are lying and, yes, it is too good to be true. No matter how convincing they make it sound or how envious you feel for not getting in on an amazing opportunity before everyone else does, always take a step back to evaluate the proposal from a broader context.
While these resources are good, they give only generalized descriptions and red flags of what to look for, not specific examples. I’m going to do that and call companies out to show you what to ask and how to know.
Investment Scams – What Consumers Need to Know – DFPI
What You Can Do to Avoid Investment Fraud | Investor.gov
AI Investment Scams are Here, and You’re the Target! – DFPI
Jason Zweig wrote another WSJ article trying to solve the financial puzzle of Yield Wealth Management and all its layers. Solving the Mystery of an Investment That’s Too Good to Be True – WSJ (Google the title of the article, MSN.com picked it up so you can read without a subscription.)
Even after all that he found and describes, Yield Wealth Management has a new website https://yieldwealthmgmt.com or Yield Wealth Management | Asset & Investment Planning that looks professional and legitimate at first glance. Here is what you need to know to find why it is not. You don’t need to understand the investment language to do this.
• Go to the About section. There are no names, pictures or team highlights of actual people at Yield. Copy the address shown in the map and paste it into a Google search. The results show Intellicapital Advisors LLC and Michael McAlpin as a contact. If you follow the link to Intellicapital Advisors’ website and then go to their About section, you will see Michael and the rest of their management team, as you should. If you read the article “Solving the Mystery of an Investment,” you will note that Michael McAlpin was pitched to become a business partner with Yield but he called off the possible merger in August.
• Within the About section, navigate to the Privacy Policy, again it’s a PDF from Intellicapital Advisors LLC.
• Next go to the Protection section. Yield’s primary custodian of choice is AET which stands for American Estate & Trust, Inc. At the very end of the page, you’ll see a small Learn More in blue that does link to AET’s website. Again, AET’s website looks professional and legitimate but no actual people listed in their About section.
• Then go to the Other Custodian Available page where it shows the logos of prominent financial institutions. However, if you click on the Learn More beneath each of these, you will get a PDF that I guarantee was downloaded from each of the institution’s websites. The reason Yield doesn’t directly link to these institution’s websites is because they can backtrack the link to Yield. So, there isn’t a legitimate relationship or “handshake” as it’s called when a website fails to establish a secure connection to these other custodians.
• Under the Investments section then Securities Backed Line of Credit, you’ll see a bunch of stock photos, no real people. This is going to be key in the future. Scroll down until you see a woman in a blue shirt. Her right hand appears to be in an awkward wave, a picture most likely generated by AI.
• And finally, they still offer the Odyssey (and Orbit) Mega-Yield Term Deposit under Investments with deposits insured up to $10,000,000. Yes, you read that right. If you scroll down to the Frequently Asked Questions, skim through the last two. If you Google Yield LTD., you’ll find an SEC – Securities and Exchange Commission link for Yield Wealth LTD where it states the registration status was terminated with the SEC on 9/5/2024.
A few more examples of what to look for to determine if what you are viewing is a questionable practice.
This is a Facebook ad.
You only need to do a quick Google search, and you will find their BBB profile and all the recent negative reviews. Chaikin Analytics | BBB Complaints | Better Business Bureau
Even a very large, well known investment company sponsoring a scare tactic ad on Facebook to get your attention.
And Reddit provides some unfiltered reviews for this. I keep seeing this advertisement on Facebook and I’m wondering if it’s legit. : r/investing
Trustworthy investment professionals don’t run deceptive ads on Facebook, private chat rooms on WhatsApp or Skype and will never DM (Direct Message) you to join or automatically enroll you into these chat groups.
The only experience I have with Crypto is blocking and eliminating the source of unsolicited group chats in text apps. My mom refers to them as the “bidders.” My brothers and I teamed up over the holidays to rid her account of these highly unscrupulous infiltrators. Gen Blogs | How a Skype notification turned into a costly lesson
The amount of AI generated content in social media, websites and advertising is more prevalent that you even realize. In a world that revolves around attention and how to capture and keep it, we need to become less reactionary and more curiously cautious. The onus is now on us to research and verify dubious claims before taking any action.
If, and the important word is if, something piques your interest but seems almost too good to be true or too enticing not to react, take a few minutes to mentally run through this list before affording yourself the distraction and embarking on an opportunity with unintended consequences.
- Enter the company name, investment fund, person, regulation, rule, idea, claim, whatever into any search engine to find trustworthy sources that explain and support what captured your attention to make you want to act.
- What is the motivation or intent of the person or company presenting the information?
- If you still aren’t certain and don’t have trusted financial professionals, ask someone you trust who has more knowledge or experience than you. That means asking up. Just like managing up with your boss, there is risk to this and is difficult to do. You may think you are asking a stupid or obvious question, but it could be the million-dollar question that preemptively saves you from making a catastrophic decision.
Featured Image – The Biltmore Estate, Asheville, NC – Photographer Cary Wauters. If you aren’t familiar with the history of this enticing investment, it’s been quite an undertaking to maintain and preserve it. 10 Fast Facts About Biltmore – Biltmore