Become Your Own Financial Advisor
This summary is based on the ideas and learnings from "Become Your Own Financial Advisor: The Real Secrets To Becoming Financially Independent", 1st Edition, by Warren Ingram in 2013. The description of the book mentions: "A step-by-step guide to financial peace of mind - financial freedom is possible for everyone. Money plays a role in nearly every aspect of our lives and, yet, very few of us know how to save, where to invest, and how to avoid money troubles. A range of topics are covered from saving, investing, debt management, and buying a house to common blunders to avoid". Overall, it is a basic attempt with honest intentions, but some content is opinion and objectively incorrect.
Summary Disclaimer
It should be emphasized that the summary only includes the content which was found to be relevant. There may have been additional information for many chapters, but it was seen to be unnecessary or incorrect in several cases. In this sense and as a consequence, the information included in the summary may appear different from the information included in the book. Finally, there is every possibility some information was mistakenly missed while reading the book.
Financial Freedom
Most people find it extremely difficult to be self-disciplined and instead prefer instant gratification. This is why most people are becoming less healthy as a population and why most people will not be financially free. Instead, more people will be slaves to their bosses or their money troubles for most if not all of their entire adult lives.
It is not possible for everyone to become truly wealthy, but anyone can become financially free. There are various routes of financial independence, but, in most cases, the most crucial step towards financial freedom is to become debt free. Most people struggle to get past this step, because they constantly increase their debt burden as their income increases. Because of this behaviour, many high-income earners are typically three months away from financial difficulty in the event of a loss of income. As they get salary increases, they buy more expensive vehicles and houses with debt, as they can now afford the higher monthly payments on this debt. If this cycle can be broken by limiting debt and paying it off more quickly as income increases, most people will be most of the way to financial freedom. The golden rule with money, which applies to any person at any stage of life or wealth, is that someone must always aim to spend less than they earn.
If someone is very disciplined and saves aggressively, it will probably take about 8 years for them to save their first R1 million. This assumes that they are able to save R5 thousand per month for 8 years with these savings invested in shares. Over the long term, shares grow at 15% per year and, through compounding, someone saving R5 thousand per month will have R1 million after 8 years. However, if this savings rate is continued at R5 thousand per month, the second R1 million will only take 5 years, while the third R1 million will only take 3 years. This compound growth is the greatest ally in investing and will be the tailwind which helps in obtaining financial goals.
If someone needs R10 thousand per month to cover expenses, then they will require only R2.7 million in investments to be financially free for the rest of their life. However, if someone needs R50 thousand per month to cover expenses, then they will require more than R13.6 million in investments. This is calculated by multiplying monthly expenses by 12 to get annual expenses and then dividing by 4.44% to get the value of the investments required. The rate of 4.44% is used because it is a sustainable amount of income which can be withdrawn from a diversified asset base over time. At a withdrawal rate of 4.44% per year, it is very likely for this asset base to last over a lifetime even if there are major stock market collapses. The important point is that the secret to financial freedom is to ensure that expenses remain as low as possible.
In order to achieve financial freedom, it is necessary to be free of bad debt at all times, build an emergency fund which can be used in the event of a financial emergency, always spend less than what is earned, try to save at least 15% of annual income, and build income-generating assets which can eventually pay for expenses in the future.
Starting Out
Comparing someone who starts saving R1 thousand per month at 25 and stops saving at 35 to someone who starts saving R1 thousand per month at 35 and continues until 60, the early investor will have saved a total of R120 thousand over 10 years, while the late investor will have saved a total of R300 thousand over 25 years. Assuming the same investment returns and by 60, the early investor will have investments worth R4.2 million, while the late investor will have investments worth R1.8 million. This is a clear illustration of how compounding can work for an investor provided they remain invested over long periods of time. The golden rule of saving is to start early and be consistent with savings.
In a career, it is recommended to specialize and be a revenue generator, such that it is possible to leverage skills and it is not always necessary to sell time. It is also important to avoid doing a job which is not enjoyable and it is definitely best to strive for bigger goals than just trying to get rich. However, perseverance often creates luck.
An anecdotal observation of retirees is that those who worked as general managers, rather than specialists, tend to be dissatisfied with their careers and relieved that they are no longer in the rat race when they retire. Many of them struggle to quantify what they have actually accomplished after all of those years of work. A better alternative might be to develop the necessary skills and experience in an area of specialization which will create value for employers or clients. For example, an experienced engineer is generally more marketable than the general manager who manages the engineering company. In addition, in times of corporate turmoil, it is often the managers who are retrenched first, while skilled works who actually create value remain, as companies will rarely get rid of the people who actually bring in money. However, there is as much danger in becoming too specialized without any options to deploy those specializations.
There are still wealthy people who have made fortunes by selling their time. The most obvious are lawyers, advocates, medical specialists, and accountants. However, these careers share a common drawback in that the extra hours that they sell come at a high cost in other parts of life. Generally, it is required to sacrifice family time, exercise, social activities, and outside interests. By the time these people retire, they are often socially isolated, frequently divorced, and suffering from poor health. By definition, there are only a fixed number of hours in a day and, in addition, it is required to have a client to bill in those hours. So, if someone is in a position to choose, rather aim for a position which does not solely involve selling time - some examples include writers, musicians, actors, asset managers, software developers, and academics.
Short-term debt includes credit cards, personal loans, and hire-purchase agreements. Such short-term debt can only be described as bad debt and should always be avoided. Medium-term debt includes loans for vehicles. Such medium-term debt should usually be avoided but can be acceptable under special circumstances. However, many people spend too much on cars and, generally, someone should not spend more than 20% of their salary on the debt for their car, maintenance costs, petrol, and insurance. Long-term debt includes home loans. This can be good debt, as it is incurring debt to purchase something which could appreciate in value. Most people will take a loan from a bank to buy a home and then aim to pay off that loan over 20 years or less. In an ideal scenario, the home will appreciate in value, such that it at least maintains its worth against inflation - although, there are still running expenses of the property to consider.
Retirement annuities are one of the favourite products of insurance salesman, as they are able to earn a high commission from a relatively small monthly investment over many years. In addition, if someone earns a low monthly salary, they may not even see a benefit from the tax deferral offered from a retirement annuity. It is always important to check the tax calculations before investing in a retirement annuity. In some cases under unique circumstances, retirement annuities can be reasonable investments, but it is important to know what the retirement annuity actually entails.
Most studies on property ownership show that, in most instances, it is better to rent a home instead of buying one. Depending on the area, renting and investing the difference compared to owning a property will have a better long-term result, as owning a property includes costs of repaying the bond, levies, and rates which are usually higher than renting an equivalent property. There are other important factors to consider, such as the costs and time for maintenance and insurance, paying bond registration costs when buying the property, and paying an estate agent a high commission when selling the property. However, most people are not good at saving and investing money, so, even though it is sub-optimal, a house can be a good investment if it means at least some wealth is being accumulated, since the fear of losing the home will usually be enough to force discipline and repayment of the mortgage.
Building Up And Balancing Out
One of the major causes for divorce is financial stress and, most often, children are the real victims unfortunately. While this might seem overly gloomy, it is a reality which has unfolded many times over the last couple of decades. So, for protection from this situation becoming a reality, it is important to agree as a family what the priorities are and how these priorities will be funded. Choosing the right partner is likely the most important decision someone will ever have to make.
Retirement
It is not necessarily possible to give a figure of the amount of money at which someone will be financially independent. But, there are basic characteristics which can be applied to anyone who is financially free. These characteristics include being free of bad debt, which is debt incurred to buy things which will be consumed or will not appreciate in value over time; having an emergency fund equivalent to at least half of annual expenses (or facilities for secured borrowing); spending less than what is earned; and have income-generating assets which are sufficient to pay for futures expenses.
Over the very long term, shares and commercial property have grown by 11% to 15% per year, but there have still been long periods with much less growth. For retirees or those close to retirement, the prospect of low growth could be a major concern, as it means their capital might not keep pace with inflation or even their monthly expenses. The necessary actions and conservative assumptions should be taken during planning to prepare for this possibility.
Retirees often rejoice when interest rates increase, because they feel that they are getting a better return on their money. However, it is typical for interest rates to increase when inflation is high, so there is usually no actual benefit in real terms. The following is a list of low-risk and income-generating units trusts and their return in relation to inflation over 1-year and 10-year periods: type, 1-year average, 1-year inflation adjusted, 10-year average, 10-year inflation adjusted; money market, 5.46%, -0.65%, 8.67%, 2.44%; income, 6.86%, 0.75%, 9.25%, 3.02%; Prudential Low Equity, 9.86%, 3.75%, 10.67%, 4.44%; inflation, 6.11%, N/A, 6.23%, N/A; RSA Retail Bond, 7.25%, 1.14%, N/A, N/A.
One of the keys to a successful retirement is ensuring that there is a plan once stopped working. Many people suffer from post-retirement depression, because they have nothing to do with their time. While financial affairs are an important part of the plan, other considerations are equally important and also need attention. Unfortunately, this affects many wealthy retirees who have spent so much time at their jobs that they have no interests outside of work once they stop working. As a starting point, it can help to think about what would like be done the first Monday once in retirement.
Many married couples really struggle in the initial phase of retirement, as someone will often retire before the other person. This can cause friction in the relationship which can be pre-empted by honest discussion in the months and years prior to retirement. It should not be assumed that each partner has the same ideas about retirement as the other partner. If possible, it can be helpful for both people to retire at similar times. In the situation where only a single person has been working, the situation can be even more troubling, as the person who has been home has a routine and life which is independent of their partner. This can lead to disruption when both partners suddenly spend every day at home.
Entrepreneur, Planning Finances
No one should go into a business expecting to fail, but they should be realistic about the chances of succeeding. Businesses do fail for a variety of reasons and it is important to build another plan outside of a business to ensure there will be financial stability and security in the event of a business failure. For example, it would be wise to develop a portfolio of assets which carry low investment risk and are not directly related to the business or its sector. These assets should also be diversified across different types of asset classes, such as government bonds, commercial property, shares, and money market accounts. Ideally and as a reasonable, someone should aim to have enough investments to cover their minimum expenses without needing to completely rely on their business (which then becomes a bonus).
Importantly, it is necessary to always resist the urgent to keep transferring money to a business if it is short on cash flow. Many entrepreneurs continue to fund their failing business with any available capital in an attempt to keep their business afloat, but this can have disastrous impacts if the business does not recover. Thus, it is vital to keep to a plan and avoid sunk costs by knowing when to stop - discipline and rational decision-making are important in these situations, as there can be more important things to maintain than trying to save a failing business.
Budgeting And Debt Management
There are a lot of similarities between financial discipline and physical discipline. It is very easy to access information about health and exercises, but there are still so many unfit and obese people who do not have underlying conditions preventing them from being healthy. In most cases, this is because most people do not have the will to be disciplined about their health over long periods of time. In the same way, most people do not really have the will to be financially disciplined over their entire lifetimes - unfortunately, it is more difficult to recover from financial negligence than health negligence.
Most types of debt are forms of bad debt and should be avoided at all costs. This is debt which is used to purchase items which do not generate income, will lose most of their value, or might be consumed without a lasting impact. Some examples of bad debt include bank overdrafts, credit card debt, and store card debt. There are almost no situations in which someone should use bad debt, as the interest rates are so high and payment terms are so inflexible that this type of debt is nearly guaranteed to cause problems - in most cases, there are much better alternatives.
Many fortunes have been created and destroyed by people using debt to buy productive assets. These are assets which are able to generate income and have the potential to increase in value. An optimal level of debt on productive assets for any individual is around 15% to 60% of their assets. This means that, if someone has R1 million in assets, they should borrow a maximum of R600 thousand to buy more productive assets. Some people may argue that more debt should be taken to be more tax efficient and generate better growth more quickly, but caution should always be applied when trying to rush wealth creation - it is necessary to have a clear understanding of the potential risks.
Step Away From Property
It is possible to compare the growth of residential property against the share market, property companies, government bonds, cash, mortgage rates, and inflation. Long-term performance from 1900 to 2012; asset class, indicator, long-term average growth after inflation; residential property, ABSA House Price Index, 1.9%; share market, All-Share Index, 7.5%; listed property, SA Listed Property, 6.4%; bonds, All Bond Index, 2.0%; sash, STefI Call, 1.0%. This shows that the best-performing investment is the share market, while residential property performs relatively poorly. Moreover, a residential property is not necessarily a low-risk investment either. This is due to the concentration in a single area of a certain country and low liquidity if needing to sell urgently (although, it should be mentioned that there may be the benefit of leverage through a home equity line of credit which could mitigate requirements for liquidity).
It is also important to look at the cost of an investment. In the case of residential property, one of the major costs would be a mortgage or home loan. The average mortgage interest rate over certain periods has been higher than the nominal growth on property before inflation. This means that investors in residential property actually paid more in interest than they gained in growth on the value of the property. However, mortgage interest is not the only cost of owning residential property, as there are also initial costs involved in buying the home. These costs include transfer duties, bond registration, and legal fees which can range from 2.5% to 8.0% of the value of the property. In addition, there are estate agent fees when selling the property which can range from 3% to 7% of the value of the property. Finally, there are also maintenance costs which could average as much as 1.5% of the value of the property per year.
In a study by Eichholtz in 1994, an index was constructed to investigate the returns of property in the Herengracht district of Amsterdam from 1628 to 1973. The study showed that, over nearly 400 years, the real prices of homes has averaged only 0.5% per annum. The results are fairly consistent over each century with the lowest real growth being -0.2% from the 1700s to 1900s and highest real growth being 1.3% in the 1600s. This study is valuable in that it focuses on a specific area in which the houses have not changed in size and which has always been considered a prime residential area. Thus, over the long term, residential property basically tracks inflation (as would be expected from a non-productive asset).
All property investments are heavily influenced by interest rates. When interest rates fall substantially, property prices usually increase in response and, when interest rates rise substantially, property prices usually decrease in response. This is due to people having more or less capacity to take on debt. There may also be a subtle influence from the economy, where, if the economy growth substantially, property prices tend to increase and, if the economy shrinks substantially, property prices tend to decrease. Any factors which impact rental income will also have an effect on property prices, such as population growth, electricity costs, political environment, legislation changes, crime, and general sentiment.
Despite being the cause of some of the biggest investment collapses, like Sharemax and Masterbond, property syndications still attract unsuspecting investors who are looking for income. Ultimately, property syndications are poor investments for the investors but great investments for the promoters who receive fees. In addition, their construction is often complicated and vague, such as buying shares in a business which gives an unsecured loan to another business which actually buys the physical property - since the loan is unsecured, the property is not used as surety if the syndication fails and investors will be left with nothing (often, the promotors own the other business themselves and may sell it to the syndication for a profit). In addition, shares are often very illiquid and difficult to sell at a fair price and require additional fees. It is very difficult to argue that all of the parties are operating in the best interests of the syndication.
Investments 101
To become financially independent, create a realistic budget, make sure to avoid bad debt, build a cash safety net, reduce and eventually eradicate all debt, and build an investment portfolio. The steps to invest successfully include defining an investment objective, establishing how much can to contributed towards investments each month, deciding what assets to buy, getting started on buying shares, and keeping the process going.
It is possible to diversify within asset classes, across asset classes, and over time. Over long periods of time, a diversified portfolio of assets will provide consistent growth with reduced risk. Most investors perceive risk to be market volatility. Inflation destroys the value of money subtly and incrementally on a daily basis. Asset allocation is how much capital is divided between different asset classes, like shares, property, bonds, and cash. Most people should have a range of 35% to 75% of their investments in shares with the remainder in safer assets, like bonds and cash. Usually, shares and listed property offer long-term capital growth, while bonds and cash offer stability and liquidity. In most conventional cases, someone who is young without immediate requirements for income should consider more high-risk assets, while someone who is old with retirement approaching should consider more low-risk assets.
Considering the difference between a lump-sum investment and incremental investments over time, there is a 66% chance that a lump-sum investment will outperform the incremental investments over a period of 12 months. This is consistent across markets and different asset allocations. Most gamblers would classify this bet as low-risk.
For centuries, people have used gold as the ultimate hedge against unforeseen risks. In times of political upheaval, economic collapse, or war, wealthy families used gold as their primary method of storing and transporting their wealth. However, this changed in the last half of the 1900s when countries started issuing currency which was not underpinned by gold. This eventually caused gold to be replaced by USD and other safe currencies as the ultimate hedge against unmanageable risks. For most people, gold is unnecessary in a portfolio, as it is ultimately an unproductive asset.
In investing, predictions are known as forecasting. They should only be followed for purely entertainment. They should never be followed for real investment advice. Most experts have horrific accuracy rates when it comes to forecasting and many people lose a lot of money as a result. There is always someone else on the other side of the trade.
Investment Options
In an endowment, money is invested via a lump sum or monthly debit order for 5 years or longer. Endowments have a fixed contract at the start of the investment, so there are specific rules which regulate changes to monthly payments and lump sum additions. The money which can be taken out of an endowment when it matures is tax-free for the investor, as the endowment itself internally pays income tax and capital gains tax. For trusts and income earners who are at the maximum income tax rate, endowments can be a tax-efficient way of saving, as the income tax and capital gains tax rates inside the endowment are lower than the maximum rates which individuals pay and lower than the rate which trusts pay. Generally, this is relevant for people who are at an income tax rate of more than 30%.
For people who are very financially disciplined, a home loan can also be a source of low-cost finance for other assets. Some people use their home loan as a credit facility to buy reasonable cars or purchase growth assets, which can be a very efficient way of using debt at good interest rates. However, this is also a very easy way to fall into an even bigger debt trap with the purchase of expensive cars, jewellery, furniture, and appliances. If someone is going to use their home loan as a single debt facility, they must make sure to pay off their purchases within the time frame of the original debt.
There are a handful of great money managers who have beaten the market over the long term, but there are not many of them and news about them is only known after they have reached their peak as investors. For example, 8 out of 10 unit trusts in South Africa have not been able to beat their benchmark over periods of 10 years. By far the best decision which most investors can make is to invest in indexed and low-cost investments. Over the long term, these funds will be better off than most fund managers more than 80% of the time. There is little need for someone to do anything or manage anything, as the investment is very passive in nature without relying on arbitrary decisions.
A retirement annuity is a personal pension fund. A retirement annuity is protected by law from creditors and a nominated beneficiary will receive money from the retirement annuity without incurring estate duty or executor fees. However, investments are highly regulated and restrictive with regard to asset allocation - leading to sub-optimal management. Moreover, the funds are not accessible before reaching an age of 55. The fees are usually disappointing.
Insurance
Most people need insurance to protect themselves and their families from financial disaster in the event they experience a loss. Potential losses are wide-ranging and include the loss of property, work, or life. In most instances, if someone has sufficient capital, the premiums they would pay for insurance would actually be better utilized within their investments. However, very few people manage to actually reach this stage of independence.
The first cover someone should buy is a medical aid or hospital plan. At the very least, a hospital plan will ensure placement at a private hospital with covering of expenses in the event of a major accident or emergency medical condition. This would include costs related to the diagnosis, treatment, and care of any emergency medical condition, set of defined medical conditions, and chronic conditions. For someone who is young without financial dependants, it is also advisable to insurance against illness and disability. This is protection against the possibility of an accident or condition which leads to permanent disability and loss of the ability to work. For disability cover, it may be beneficial to consider buying an income-replacement policy instead of a policy which pays a capital amount. Critical illness cover is related to treatment for heart attacks, cancer, stroke, coronary artery bypass surgery, dementia, blindness, deafness, organ transplants and various other terminal illnesses - as someone gets older, it becomes more difficult to get critical illness cover. Life cover becomes important when someone has financial dependants, such as a spouse or children. To determine how much life cover would be necessary, start with a minimum which would cover monthly expenses if not fully replace the lost income - as a starting point, calculate annual income and multiply it by 25 to determine the lump sum which would be needed. In most cases, the cover provided by employee packages is cheaper than what is available for someone on their own.
Taxes, Trusts, And Wills
It should be acknowledged that most tax advisors are useless investment advisors and provide terrible investment advice. In most cases, they will present investments which may save on tax, such as tank containers, aeroplane syndicates, and farming ventures, but these investments are generally terrible. Just because they work with numbers involving money does not mean they know how money and markets actually work. Tax is typically a lower priority factor when making a decision about investments, as its impacts are usually similar between the available possibilities.
When someone dies, their assets become part of an estate which is legally required to be closed down according to a fixed procedure. There are various laws around wills and estates, such that a will ensures that assets are distributed in a chosen manner. If there is no will, then the distribution of assets will be determined by the judgement of a bureaucrat. Upon death, the estate is reported to a division of the Master of the High Court: Deceased Estate which supervises the administration of estates. Sadly, some of these divisions are inefficient and in a state of decline and, whenever this is the case, there is opportunity for corruption. It is vital to ensure someone has a valid will drafted by a specialist. The fee for a will should be minimal and paid for per hour - many banks will offer free wills, but these often come with high fees as they appoint themselves as executors around 3.5% plus VAT. It is usually best to appoint a trusted family member or close friend as the executor who can then appoint competent professionals to assist with the estate for a reasonable fee.
Along with a will, it can be helpful to keep a good record of assets for executors to know what to track. This list of assets should be kept with a family member, financial planner, lawyer, or accountant, so that someone knows where to find it when it is needed. It is possible to leave specific items to specific people or use a percentage allocation of the estate to specific people. It may be tempting to create rules to govern the distribution, but this may only lead to frustration and fighting between the recipients. With regard to distributions for young children, it may be best to leave the bulk of the assets to a trust with them as beneficiaries and trusted guardians managing the trust as trustees.
It is vital for a will to be dated and clarify that it revokes previous wills. This allows for a will to be changed at any time with the most recent will being the only valid will. Every page of the will needs to be signed with the last page being signed at the end of the written words without leaving blank spaces between the words and signatures. The signing of the will must also be witnessed by at least 2 other people who must sign in the presence of the owner of the will and in the presence of each other. To avoid a situation in which there is potential conflict of interest, it can be helpful to avoid asking someone who is likely to receive something from the estate to be a witness of the will.
If money is placed in a trust, the money is legally given to a new entity and only the trustees and beneficiaries may decide how the trust is managed. The trustees manage the affairs of the trust according to a trust deed which stipulates how the money should be managed and who should benefit from it. Trust law is complex and it is necessary to ensure the trust is correctly structured and was created for the right reasons. Historically, trusts may have been used as tax shelters or ways to hide money, but this is no longer relevant due to changes which levy higher taxes against them.
Getting Help From Professionals
There is a misconception among many people that having money will solve problems and get rid of worries. However, money is usually stressful, as it introduces concerns for what to do with that money and poor decisions can have greater costs (and possibly at the worst of times). A wrong decision could mean the difference between financial independence and starting over again. If one is pursed, it is the job of a financial advisor to give advice about what is rational and irrational in decisions and what is realistic and unrealistic in expectations. It is necessary for a financial advisor to be trustworthy, understanding, and put the interests of their clients before their own interests. In almost every case, a financial advisor should be a Certified Financial Planner (CFP) with globally recognized qualifications. In addition, independent advisors are not affiliated with any product provider, bank, or insurance company without direct conflicts of interest, although some may still be novices chasing commissions (although very few are high skilled and ethical advisors).
Money And Relationships
If someone is married, it is important to have an understanding of how each other views and manages money. This should be directly discussed without assumptions based on personal philosophies and experiences. It is somewhat rare to find that both parties in a relationship have a similar attitude towards money and, in most cases, it will be required for an agreeable compromise between the parties. Occasionally, one person is more careful about spending money, while the other person is more carefree with buying and this can be fertile ground for conflict if it is not discussed early and with proper communication and planning. Also, a very common situation to avoid is when one spouse is blissfully ignorant of the family finances and investments while the other spouse manages everything.
Financial Blunders To Avoid
Without a doubt, the bulk of those who are in constant financial difficulty are people who consistently spend more than they earn. Sadly, these same people tend to repeat this error throughout their lifetime without learning from past mistakes. It is common for excessive debt to be a financial problem, especially in relation to vehicle and luxury purchases, as people tend to calculate affordability by the amount of debt they can repay each month. However, although arguably less distressful but on the opposite end of the spectrum, there are those who save too aggressively and are unable to become comfortable with spending money once they retire. Financial matters are complicated only if they are allowed to be and it is only possible for someone to solve their financial troubles by deciding to do so themselves.
Whether it be in accounting, medicine, law, or engineering, a track record of success in a certain field does not automatically make someone a successful investor. The markets have humbled many intelligent people over hundreds of years, especially those who are overconfident or arrogant. To be successful with investments, it is necessary to be confident in abilities but humble enough to accept inevitable mistakes. However, luck always plays a substantial role.
Since the mid-1990s, there have been numerous collapses of large investment schemes. At the most basic level, these scams convince people to part with their capital because they are fearful or greedy. The unscrupulous operators are experts in playing to these emotions once they have identified what drives a certain person. This has cause untold damage to many people and, in many cases, retirees were the main victims - unfortunately, some of them commit suicide rather than face life without savings. Most of the scams are based on partially believable facts and property is often used as a cornerstone. It is fear or greed which allows people to deceive themselves when they are sold a story by a scam.