RPF0285-Smelling_Financial_Fraud
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00:00:29.800 | Radicals, today I'd like to have a conversation with you on the topic of financial fraud,
00:00:38.560 | lies, hucksters, shysters, manipulation, just some of the injustices that are perpetrated
00:00:47.600 | on the average person.
00:00:49.880 | And I want to hopefully give you some tools and some ideas to protect yourself.
00:00:53.280 | We're going to talk about this from a wide range of perspectives.
00:00:57.700 | And my hope is that you will come away from today's show better equipped to defend yourself
00:01:03.900 | against all of those who would like to swindle you out of some of your hard earned money.
00:01:25.920 | Welcome to the Radical Personal Finance Podcast.
00:01:27.860 | My name is Joshua Sheets and I'm your host.
00:01:29.660 | Thank you for being with me today.
00:01:30.660 | We're going to tackle this topic head on in a straightforward way.
00:01:35.300 | I'm going to try to give you a bunch of examples so that you can see how broad it
00:01:38.820 | is.
00:01:39.820 | I'm not mad at any one particular situation, but I am mad that we're generally not taught
00:01:44.380 | how to think critically.
00:01:45.380 | I don't think I'm the world's greatest expert at teaching this, but I'll at least
00:01:49.820 | give you some thoughts that I believe will equip you with some better tools.
00:01:58.380 | Woke up this morning – and I've been thinking about this topic for the last few days.
00:02:02.700 | Yesterday's show I wasn't exactly sure what to do the show on.
00:02:05.180 | I thought about doing a show on financial fraud, but I wasn't quite ready for it.
00:02:10.460 | So I went ahead and played the interview for you that I played with Jake Tassilis yesterday
00:02:15.460 | on yesterday's show.
00:02:17.060 | I woke up this morning to a tweet from a listener who had sent me over a follow-up story on
00:02:23.260 | the man named Dan Price, who is the business owner that Jake Tassilis and I mentioned in
00:02:29.320 | yesterday's show, owner of Gravity Payments out in Seattle, Washington, the guy who raised
00:02:33.820 | all of his employees' rates – the rates of pay up to $70,000 of minimum wage.
00:02:42.860 | I hadn't followed this story closely and in a moment I'll read some information on
00:02:48.820 | it, but I hadn't followed it closely.
00:02:50.380 | I just said what I said in the interview yesterday that, well, hey, if he wants to do it, that's
00:02:54.940 | fine.
00:02:55.940 | But everyone jumps on this as an argument for why we should massively raise minimum
00:02:59.080 | wages across the country.
00:03:00.340 | This is an argument that's taking place in the US American culture right now.
00:03:03.940 | Bernie Sanders, a Democratic presidential candidate, is bringing this type of content
00:03:08.060 | to the forefront.
00:03:09.060 | So it's definitely part of today's political debate and political climate.
00:03:11.820 | I hadn't kept tabs on this, but this listener sent me an article, an extremely damning article
00:03:17.140 | from Bloomberg Businessweek about some of the background of what may have actually happened
00:03:22.980 | with Mr. Price and some of his actual business affairs.
00:03:30.060 | In short, there is compelling evidence to indicate that the whole publicity stunt was
00:03:35.740 | essentially a way of him trying to work his way out of some potential financial and legal
00:03:40.960 | problems that were faced by his actions, by his being served a lawsuit, and the lawsuit
00:03:44.980 | was served before his announcements about what he should do.
00:03:49.260 | I will – I might during the context of the show talk about more details of that or I'll
00:03:54.660 | just post links to the stories and you can check it out in the show notes for today.
00:03:58.260 | But what just made me realize is how important it is not to believe things like news articles,
00:04:05.260 | not to even believe things like some books and situations like that.
00:04:09.300 | I've got a number of things that are coming together that in this – in the context of
00:04:14.340 | this topic that are really contributing to my wanting to do it.
00:04:18.980 | So there was a story this morning of Dan Price and the gravity payments and just this weekend,
00:04:24.260 | there is – if any of you are on YouTube, probably you watch YouTube videos.
00:04:28.460 | It's likely that sometime in the last few months, you saw some information.
00:04:33.500 | You saw an ad that was played for you with a dude holding a camera up, doing a selfie,
00:04:38.140 | standing in his garage in front of some Lamborghinis.
00:04:40.700 | The guy's name is Tai Lopez.
00:04:42.060 | He runs a very large YouTube channel.
00:04:43.540 | But I was just looking at some of the information that was out there, people digging into some
00:04:48.020 | of the stuff that he's putting out with his brand and his organization and uncovering
00:04:52.700 | the lies and the misstatements and the lack of actual follow-up facts.
00:04:59.020 | I was looking at that and I'll cover that in a few minutes with some details.
00:05:03.940 | I was thinking about the Martin Luther King holiday that was just this last weekend and
00:05:09.060 | Martin Luther King, one of the US-American national cultural heroes, but the man had
00:05:15.340 | some serious, serious problems which I'll mention a few in a minute.
00:05:20.940 | Then looking – I'm reading a book by Pamela Yellen called Bank on Yourself, the Bank on
00:05:24.660 | Yourself Revolution, reading through the language in it and just stunned that this book was
00:05:28.540 | a bestseller just simply with regard to the language in it and some of the just atrocious
00:05:33.020 | marketing copy that's written in this thing.
00:05:39.220 | Watching the political battles of Donald Trump and Hillary Clinton and just scratching my
00:05:46.100 | head and saying, "What on earth is going on?"
00:05:48.940 | So we're going to talk about some of those issues.
00:05:52.900 | My overall encouragement is I want you to not believe anyone based upon their impressions,
00:05:57.260 | but I want you to do your own homework on me, on anybody else.
00:06:00.580 | I want you to do your own homework.
00:06:02.740 | My hope is to help you become a much more critical thinker.
00:06:05.780 | We'll talk about those issues.
00:06:07.420 | But I'm going to begin with playing for you a media clip here that I think is very
00:06:12.660 | important for you to hear.
00:06:15.020 | This was something I first became aware of when I was in college.
00:06:19.180 | In my business law class in college, my favorite class in all of my four years of university
00:06:25.660 | education was business law.
00:06:27.860 | We studied the case of the woman who spilled hot coffee on her lap.
00:06:33.340 | I came away from that recognizing how little I knew about what actually happens in some
00:06:40.260 | situations versus what is reported about what happens in some situations.
00:06:47.380 | This moment in my life was a real turning point and I recommitted myself to trying my
00:06:53.020 | best to do my homework on issues.
00:06:56.500 | I make plenty of mistakes.
00:06:58.060 | I get stuff wrong all the time.
00:06:59.660 | I don't claim any degree of necessary expertise on this, but I do my best to dig a little
00:07:04.740 | deeper and try to do homework on things.
00:07:08.580 | I'm going to play this audio clip for you.
00:07:10.220 | This would be a good thing if you are listening to me while you're sitting in front of a computer.
00:07:13.900 | I would recommend to you that you'll enjoy actually if you can separate your attention
00:07:17.740 | and watch a video, you will enjoy seeing this in video form so that you can see exactly
00:07:22.420 | who's talking, some of the news clippings and things like that that are put on the screen
00:07:25.940 | for you.
00:07:26.940 | If you're driving in the car, don't worry.
00:07:28.580 | You will certainly be able to grasp the story simply with the audio, but you won't miss
00:07:32.840 | a lot.
00:07:33.840 | But if you are in front of a computer, then this would be a good piece of audio for you
00:07:36.500 | to stop and then go ahead and watch the video.
00:07:39.980 | The video is 12 minutes and 14 seconds long, so feel free if you pause just to skip forward
00:07:44.420 | 12 minutes if you're going to watch it on a computer.
00:07:46.620 | Let's start with here, this story, because what you know about this story and what you've
00:07:52.540 | heard about the story may be two different things.
00:07:55.280 | This is a report from the Retro Report, which was a project of the New York Times, and this
00:08:01.380 | was published back in 2013.
00:08:04.460 | So here is the audio from the video.
00:08:08.140 | In Albuquerque, New Mexico, an elderly woman was severely burned when she spilled a cup
00:08:14.980 | of McDonald's coffee in her lap.
00:08:17.020 | An 81-year-old woman has been awarded $2.9 million after she sued McDonald's, claiming
00:08:23.140 | their coffee was too hot.
00:08:25.380 | Stella Liebeck spilled just eight ounces of coffee, but she attracted a flood of attention.
00:08:30.540 | The jury's award set off a media frenzy and became a rallying cry for those who believed
00:08:35.280 | our legal system had run amok.
00:08:37.380 | I think it's absurd.
00:08:38.620 | But as her story cycled through newspaper headlines, talk show storylines, and late
00:08:43.020 | night punchlines, one thing was lost, the facts.
00:08:47.820 | This story is the most widely misunderstood story in America.
00:09:05.500 | The public perception of it is Stella Liebeck won a lottery.
00:09:09.660 | She bought the coffee, she spilled it on herself, and now look, she's a millionaire.
00:09:13.700 | But of course the facts are much more complicated than that.
00:09:16.860 | Stella Liebeck was a 79-year-old widow sitting in the passenger seat of a parked car when
00:09:21.740 | she was burned on February 27, 1992.
00:09:26.020 | She had recently quit her job as a department store clerk and moved to Albuquerque to be
00:09:30.620 | near her daughter.
00:09:32.180 | The day that the burns happened, my mother and my nephew went through the drive-thru
00:09:38.580 | at McDonald's and got breakfast and coffee.
00:09:43.420 | And they pulled into the parking lot, and in the Ford Probe, there's slanted surfaces
00:09:48.940 | everywhere.
00:09:49.940 | There's no place to put the coffee.
00:09:51.660 | She put it between her knees and lifted the lid off.
00:09:55.180 | And in the process of doing that, spilled the coffee and all of the hot liquid went
00:10:00.460 | into the sweatsuit that she was wearing and pooled in the seat.
00:10:06.260 | All I remember is trying to get out of the car.
00:10:08.620 | I screamed, not realizing I was burned that bad.
00:10:11.820 | I knew I was in terrible pain.
00:10:14.820 | The severity of the burns caused Stella Liebeck to go into shock, and her grandson immediately
00:10:19.900 | took her to the emergency room.
00:10:22.080 | She was burned over 16 percent of her body.
00:10:25.300 | Six percent of the burns were third degree.
00:10:28.220 | She was in the hospital for a week.
00:10:31.860 | Medical bills were $10,000.
00:10:34.220 | So Stella reached out to McDonald's and asked to be reimbursed.
00:10:37.420 | We couldn't believe that this could happen over spilling the coffee.
00:10:41.980 | So we wrote a letter to McDonald's asking them to check the temperature of the coffee
00:10:48.380 | and to give recompense for the medical bills.
00:10:52.860 | And the response from McDonald's was an offer of $800.
00:10:58.100 | Stella Liebeck had never sued anyone before Albuquerque attorney Ken Wagner took her case.
00:11:03.760 | Before they went to trial, they tried twice to settle out of court.
00:11:07.280 | But McDonald's refused.
00:11:09.580 | We bought a product.
00:11:10.820 | It was used as intended.
00:11:13.180 | It was unreasonably hot and therefore unreasonably dangerous.
00:11:18.740 | And those were the essential facts.
00:11:21.540 | I was not in it for the money.
00:11:23.580 | I was in it because I wanted them to bring the temperature down so that other people
00:11:28.020 | would not go through the same thing I did.
00:11:31.740 | McDonald's policy was to serve coffee between 180 and 190 degrees.
00:11:36.940 | That's about 30 degrees warmer than most home coffee brewing machines.
00:11:41.500 | A burn expert testified that liquid at 180 degrees could cause third-degree burns within
00:11:46.980 | 15 seconds.
00:11:49.260 | Lawyers produced documents that showed that between 1983 and 1992, nearly 700 people claimed
00:11:55.500 | that they had been burned by hot coffee at McDonald's.
00:11:59.340 | McDonald's was on big-time notice that they had a product that was dangerous and it was
00:12:04.020 | burning people.
00:12:05.320 | We argued that to the jury, that they were callous and indifferent in simply not turning
00:12:10.700 | down the temperature.
00:12:12.780 | An expert for McDonald's testified that burns are exceedingly rare, one for every 24 million
00:12:18.420 | cups of coffee served.
00:12:20.420 | They just said it's statistically insignificant and we're not going to change what we do.
00:12:27.680 | People interact with hot beverages all the time in a fast food restaurant and that doesn't
00:12:32.980 | necessarily mean that the restaurant is doing something wrong.
00:12:38.500 | Attorney Tracy Jenks tried the case for McDonald's and argued that Mrs. Liebeck bore personal
00:12:43.220 | responsibility because she spilled the coffee on herself and that McDonald's coffee wasn't
00:12:47.780 | any hotter than the coffee at other fast food restaurants.
00:12:50.900 | She said the reason the coffee was so hot was because that's what customers wanted.
00:12:55.620 | McDonald's had a really, really strong reason for why they brewed their coffee at the temperature
00:13:01.420 | they did.
00:13:02.640 | It was an industrial standard based on the maximum extraction of the flavor and the maximum
00:13:08.380 | holding temperature.
00:13:10.420 | But the jury saw how liquid at that temperature can scald when they were shown graphic photos
00:13:15.120 | of Mrs. Liebeck's burned groin.
00:13:18.500 | The photos depicted where they had to graft the skin from the side of her legs to close
00:13:23.780 | the third degree burn.
00:13:25.500 | And I think if people would have seen the severity of the burns, they would have realized
00:13:31.100 | it was not a laughing matter.
00:13:33.860 | After seven days of testimony and four hours of deliberation, jurors came up with a comprehensive
00:13:39.140 | answer to a complicated case.
00:13:41.580 | They unanimously agreed to award Stella $200,000 in compensatory damages.
00:13:47.080 | But because she caused the spill, they reduced that to $160,000.
00:13:51.860 | Jurors set punitive damages to send the message to McDonald's to turn down the temperature
00:13:56.080 | of the coffee.
00:13:57.080 | I remember I could see Judge Scott going like this with his pencil and I thought, "Oh, I
00:14:02.560 | hope he's counting digits on the verdict form."
00:14:07.000 | And he was.
00:14:08.540 | They based the amount on the revenue from two days of coffee sales, $2.7 million.
00:14:14.820 | The size of the award got the media's attention, but it overshadowed the rest of the story.
00:14:20.440 | Details of the case and the facts related to how the jury made its decision went mostly
00:14:25.160 | unreported.
00:14:26.160 | Several days after the verdict, I had news crews from France, Japan, Germany in my driveway
00:14:33.880 | wanting to interview me.
00:14:35.040 | I mean, I was stunned.
00:14:37.560 | After the verdict came in Wednesday, August 17, the Albuquerque Journal ran the first
00:14:42.720 | story.
00:14:43.720 | The Associated Press and Reuters Wire Services then filed reports, and the story was picked
00:14:48.400 | up in dozens of newspapers worldwide.
00:14:51.400 | It became an international news event.
00:14:53.840 | But as the story's reach got bigger, the word count got smaller.
00:14:58.040 | In some papers, it was not more than a blurb.
00:15:01.040 | Six hundred and ninety-seven words in the Albuquerque Journal became 349 words in the
00:15:06.120 | AP and became as few as 48 words in various renderings by major metropolitan newspapers.
00:15:13.400 | Forty-eight words can't explain a lot.
00:15:16.520 | And then "woman coffee millions" sounds like a ripoff, not like a logical consequence of
00:15:22.360 | a thoughtful trial.
00:15:25.200 | The report aired on more than a dozen national broadcasts and twice as many local news shows.
00:15:30.760 | The condensed telling of the story created its own version of the truth.
00:15:34.840 | Instead of pointing out she spilled the coffee in the passenger seat of a parked car, this
00:15:39.380 | was the new narrative.
00:15:41.040 | It seems she was holding a cup between her legs while driving.
00:15:44.240 | Clamped it between her legs, drove down the street, spilled it, burned herself, sued McDonald's,
00:15:48.920 | and collected.
00:15:50.600 | Bella has received letters saying stuff like...
00:15:53.280 | I was driving down the road.
00:15:54.720 | I had no business driving down the road with coffee between my legs and all that stuff.
00:16:00.080 | See, they're just plain ignorant.
00:16:03.240 | My mother was made the villain in this story.
00:16:06.280 | It's like bullying.
00:16:07.280 | It feels like bullying.
00:16:08.280 | I mean, it's not like the McDonald's person leaned over the car and poured it.
00:16:12.360 | It was an accident.
00:16:13.760 | Very much like urban legends, it is a very compelling story.
00:16:17.920 | Once everybody decides what is true about something and the media has been sort of an
00:16:22.800 | echo chamber for it, then how do you deal with the fact that they might be wrong?
00:16:27.800 | Now she claims she broke her nose on the sneeze, got it to sizzle, or bending over looking
00:16:31.040 | at the chickpeas.
00:16:32.040 | Oh, my coffee was too hot.
00:16:33.640 | It's coffee!
00:16:35.920 | The lawsuit also got a lot of play on talk radio.
00:16:39.520 | It was a very hot issue for a long time.
00:16:41.280 | It's probably one of the most sensational, high-profile tort cases of the last 20 years.
00:16:47.840 | So when tort reform comes up, most people say, "Oh, sure, the McDonald's case."
00:16:53.040 | Republican lawmakers crafting the "Contract with America" seized the moment.
00:16:57.840 | They tapped into public outrage over frivolous lawsuits to promote the Common Sense Legal
00:17:03.320 | Reform Act.
00:17:04.600 | Liebeck's case became Exhibit A.
00:17:06.560 | The lady goes through a fast food restaurant, puts coffee in her lap, burns her legs, and
00:17:13.320 | sues and gets a big settlement.
00:17:15.120 | That in and of itself is enough to tell you why we need to have tort reform.
00:17:19.960 | She spilled hot coffee on her lap while sitting in her car and claimed it was too hot.
00:17:24.440 | Every day we hear about another outrageous lawsuit.
00:17:28.440 | Stella's portrayal as a scheming wannabe millionaire was based on the jury's award, but that amount
00:17:34.000 | was only a suggestion.
00:17:35.700 | In reality, the judge significantly reduced the punitive damages.
00:17:40.320 | The judge reduced the award to about $650,000.
00:17:44.920 | According to a source familiar with the case, it was settled for less than $500,000.
00:17:50.720 | Stella was not allowed to talk to the press.
00:17:53.200 | But over the last two decades, her lawsuit has become part of the cultural discourse.
00:17:58.400 | Pardon me.
00:18:00.400 | Excuse us.
00:18:02.400 | Oh!
00:18:06.400 | Coffee!
00:18:10.400 | You got a chance?
00:18:11.400 | Do we have a chance?
00:18:13.400 | You get me one coffee drinker on that jury, you're gonna walk out of there a rich man.
00:18:19.400 | Stella's daughter says that although over the years some stories have given greater context
00:18:24.600 | and a new perspective, such as the documentary Hot Coffee, her family is still haunted by
00:18:30.020 | a perception that doesn't seem to go away.
00:18:33.400 | Life's been getting bigger, Jesus getting smaller, spill a cup of coffee, make a million
00:18:39.600 | dollars.
00:18:40.600 | I like Toby Keith, but he did The American Ride.
00:18:46.360 | Do we have to keep living this over and over and over again?
00:18:50.280 | Man, it's hot.
00:18:51.840 | How hot is it?
00:18:53.660 | So hot I poured McDonald's coffee in my lap to cool off.
00:19:00.280 | What people believe are the facts of this case, and how deeply held those convictions
00:19:04.360 | are, has become useful to attorneys.
00:19:07.260 | The case that became an example of juries being out of control is now used to screen
00:19:12.440 | potential jurors.
00:19:14.800 | It's a wonderful litmus test.
00:19:16.440 | If you're putting someone on a jury, you really have to know how they feel about this case
00:19:21.400 | to know whether they're open to the facts that you're going to present.
00:19:26.960 | McDonald's has been in the public mind cast as the victim.
00:19:31.040 | That Stella Liebeck needed to defend her reputation is the saddest piece of this whole story to
00:19:37.600 | me.
00:19:38.600 | Stella Liebeck died in 2004 when she was 91.
00:19:43.400 | The emotion that she went through, she just felt like people were coming at her.
00:19:51.560 | McDonald's representatives didn't return emails or calls, but according to current franchisee
00:19:56.600 | handbooks, coffee must now be held and served 10 degrees lower.
00:20:11.040 | So I hope that overview is interesting for you.
00:20:14.840 | For some of you, maybe that's a reinforcement of information that you were already aware
00:20:18.120 | of.
00:20:19.120 | For some of you, maybe it's new information on a new something that you've ever done.
00:20:24.840 | If you're anything like me, those were allegations that I had made.
00:20:28.000 | Talked about how ridiculous it is that they have hot coffee and somebody consuming McDonald's
00:20:31.880 | and all for millions of dollars.
00:20:34.560 | And yet here are some facts pointing out how ignorant I was and how wrong I was.
00:20:42.080 | And it really stunned me because I started to learn I need to go and check out the other
00:20:47.000 | side of some things.
00:20:49.040 | Two interesting points for those of you who have consumed the audio only.
00:20:52.840 | First, the pictures that they showed are really, really, really compelling.
00:20:57.800 | It's just really, really sad to see these very, very serious burns on this elderly lady's
00:21:03.680 | legs.
00:21:04.680 | They're graphic and they are extremely compelling.
00:21:07.160 | The second thing was there was a clip in there from a Republican, I don't know, congressman
00:21:14.240 | or senator who was – he was the one who was talking about the need for tort reform.
00:21:19.360 | This is an example of why we need tort reform.
00:21:22.160 | That person's voice was represented – it was John Kasich who is currently a Republican
00:21:27.320 | candidate for president.
00:21:30.920 | So if you think it's not relevant, here it is today that there was a representative
00:21:34.880 | using that as the case to illustrate why there needs to be tort reform and now he's running
00:21:39.540 | for president as a Republican candidate.
00:21:42.160 | Now leave aside tort reform for another day.
00:21:45.320 | I don't have a clue.
00:21:46.320 | I'm not competent enough to discuss that.
00:21:49.040 | But for me, that story opened my eyes and it opened my eyes and said, "Hey, I got
00:21:53.760 | to pay a little bit more attention to what's going on."
00:21:56.880 | Now that story occurred in 1993 and the fast-moving events of story published in the local daily
00:22:03.060 | newspaper in Albuquerque picked up by AP and Reuters in the news and then spreads across
00:22:07.120 | the world.
00:22:08.440 | What about today in a day of financial media?
00:22:11.840 | And just think over the last year, as I record this, it's January 26, 2016.
00:22:16.520 | Over the last year, think of all of the ridiculous hoaxes perpetuated that you've seen in your
00:22:21.400 | social media feeds.
00:22:23.040 | Whether if I post this, then Facebook Zuckerberg is going to – Mark Zuckerberg is going to
00:22:28.200 | give me money because he just is giving away charitable money or some of the hoaxes that
00:22:32.820 | occurred in the last two weeks with this billion-dollar lottery that was out there, the Powerball
00:22:39.000 | or some of the stupid privacy notice things that were going on.
00:22:43.320 | If I post this as Facebook, Facebook, this is my information.
00:22:46.560 | It's just absurd.
00:22:47.920 | And yet this stuff spreads so fast, so fast, and we perpetuate it in our ignorance.
00:22:56.240 | And that's why the Dan Price example was so key.
00:23:00.120 | The reason I started with McDonald's hot coffee is everyone knows the story but very
00:23:04.720 | few people know the facts because even though sometimes in the past it was corrected, most
00:23:10.280 | people if you talk about the McDonald's hot coffee case, most people that you talk
00:23:14.040 | with are going to say, "Oh, yeah.
00:23:15.240 | How ridiculous is that?"
00:23:16.800 | And they don't know what's actually going on, and that's what happens with these online
00:23:20.800 | memes with the way the information moves.
00:23:23.380 | Everyone says, "Yeah, that's crazy."
00:23:25.520 | Dan Price, perfect example.
00:23:27.560 | The furor that came out when he publishes that I'm going to make $70,000 per year,
00:23:33.480 | the minimum wage at my company, and here I am, this magnanimous, gracious CEO.
00:23:37.320 | I've cut my personal compensation from $1.1 or $1.2 million to $70,000, and we're going
00:23:42.880 | to have this great idealistic company, and how wonderful this is.
00:23:46.240 | Well, this gets splashed everywhere.
00:23:48.400 | He's on the front cover of this magazine, of that magazine, Inc. magazine, invites him
00:23:51.720 | to speak, give him the equivalent, check the facts out a little bit, give him $120,000
00:23:57.720 | of value in kind for him to come and speak at their magazine conference, and he's on
00:24:03.160 | the Today Show.
00:24:04.160 | He's all over the place.
00:24:05.160 | It inspires and incites this national conversation about minimum wage laws and the importance
00:24:10.680 | of having a fair and living wage, and yet you look at it after the fact and as things
00:24:15.560 | are starting to emerge, I'm not willing to judge the actual facts, but here there's a
00:24:21.040 | lawsuit that he's been served two weeks prior to this announcement about his egregious personal
00:24:28.800 | compensation, and obviously the details of the lawsuit at this point are quiet, but the
00:24:37.120 | evidence seems compelling that he's lying.
00:24:42.240 | Now what will be the case?
00:24:43.920 | I don't know, but you certainly do not see on the Today Show – I have not seen or heard
00:24:49.080 | of him being back on the Today Show facing the accounts because in our culture we don't
00:24:54.240 | care about what's actually going on.
00:24:56.640 | And so whether it's Dan Price with gravity payments and the $70,000 living wage argument
00:25:02.120 | or whether it's – let me give you these other examples just to show how they tied
00:25:06.000 | it in.
00:25:07.000 | Martin Luther King.
00:25:08.000 | Martin Luther King is a national hero in the United States of America.
00:25:11.880 | I don't know what your opinion is of him or what you think about him, but he is generally
00:25:16.200 | lauded as a cultural icon, somebody who completely changed and led the civil rights movement
00:25:24.200 | in the United States to lead to black and white equality in the culture.
00:25:28.680 | Now, most of us are pretty familiar with that story.
00:25:32.240 | Most of us are familiar with the famous sit-in by Rosa Parks sitting in on the bus, and most
00:25:40.680 | of us know the story.
00:25:41.960 | Well, what about some more of the facts behind the story?
00:25:45.640 | A couple of ones to pique your interest just a little bit.
00:25:49.000 | I'll begin with just an interesting little background from four paragraphs of an essay.
00:25:54.400 | This essay is by economist Gary North.
00:25:57.680 | He says this.
00:25:58.680 | "In the summer of 1960, I read King's book, Stride Toward Freedom, published 1958.
00:26:03.480 | It was about the 1955 to '56 bus boycott in Montgomery.
00:26:07.360 | The book persuaded me that it had been a legitimate protest.
00:26:10.400 | Here was a privately owned bus line that had a monopoly granted to it by the city.
00:26:14.920 | It forced blacks, Negroes in 1960, to sit in the back, yet they paid full fare.
00:26:20.520 | Worse, they paid, had to get off the bus, walk to the rear exit door, and get on.
00:26:25.880 | This was deliberate humiliation.
00:26:27.640 | It was an outrage, but hardly any white person was outraged in 1955.
00:26:32.300 | What the book did not reveal was that profit-seeking streetcar lines in the South did not originally
00:26:36.440 | have this seating policy.
00:26:38.360 | This began around 1900.
00:26:40.200 | It was forced on them by the government.
00:26:42.240 | Typical was North Carolina.
00:26:44.200 | In 1899, the North Carolina General Assembly passed legislation requiring railroads and
00:26:49.100 | steamboat companies to "provide separate but equal accommodations for the white and
00:26:53.640 | colored races at passenger waiting stations or waiting rooms, and also on all trains and
00:26:57.720 | steamboats carrying passengers," with exemption for servants or express trains.
00:27:02.960 | Streetcar companies followed the railroad precedent.
00:27:05.360 | In 1907, the General Assembly passed similar legislation for street and interurban railways,
00:27:10.380 | but this time specifically mandated that white passengers sit toward the front of each car
00:27:14.360 | and colored passengers sit toward the rear.
00:27:16.840 | This legislation was expanded in 1939 to provide details of maintaining segregated seating
00:27:21.680 | in buses.
00:27:22.680 | It's also worth noting that the Montgomery bus line soon decided to abandon the segregation
00:27:27.120 | policy, but a local judge forced the company to return to the old policy.
00:27:31.920 | That was when the blacks sued in federal court.
00:27:34.120 | You can feel free to read the rest of that essay if you want.
00:27:36.520 | It's posted behind a paywall, but I will link to it in the show notes.
00:27:41.320 | So a little bit of background on the laws.
00:27:43.660 | Most of us don't know much about those laws.
00:27:47.000 | Even a little bit of background on Rosa Parks, it wasn't an accident.
00:27:53.800 | It wasn't an accident that somehow she just one day decided to screw up her courage and
00:27:58.360 | say, "No, I'm not going to get in the back of the bus."
00:28:01.320 | It was planned in months by the local NAACP organization.
00:28:06.480 | It was there and it was a premeditated planned event.
00:28:10.640 | Evidently, the girl that was originally scheduled to do that found out that she was pregnant
00:28:15.600 | on the day that the protest was scheduled.
00:28:19.800 | So that would have been bad PR and so Rosa Parks was recruited for the opportunity and
00:28:25.840 | she volunteered to do it.
00:28:28.500 | Those little details provide a little bit of interesting cultural context to what we
00:28:32.440 | read about in our history books.
00:28:34.500 | But specifically to Martin Luther King, the two aspects that are very rarely talked about
00:28:39.320 | was number one, the man was a serial adulterer over and over and over and over and over again.
00:28:44.940 | He was a sex addict, very rarely reported on because that's considered to be personal
00:28:51.400 | shortcomings.
00:28:52.400 | But probably even the more egregious example was his plagiarism of many of his published
00:28:58.940 | and even spoken works.
00:29:00.620 | I'll link to an article in the show notes for today if you'd like to read.
00:29:04.900 | But it's definitely an extremely troubling double standard, extremely troubling.
00:29:12.620 | Now I don't usually try to press these issues because there's such a cultural hot button
00:29:19.020 | and especially Martin Luther King because he is such a polarizing figure and again,
00:29:24.420 | widely renowned.
00:29:25.420 | We have a national holiday after him because of the work that he did.
00:29:29.000 | So I don't – I'm not an abrasive person.
00:29:30.780 | I don't post these articles on the day of his – during the – around the celebration.
00:29:36.860 | I guess if I were a better marketer, I probably should.
00:29:39.840 | But I usually wait six months after.
00:29:41.600 | So it's not in the middle of it all and then I post the troubling strategies.
00:29:45.940 | The point is how much of that stuff do we actually know?
00:29:49.300 | Now bring it in a little bit closer to finance.
00:29:52.020 | I like to use these non-financial examples because that's something we're more common
00:29:55.940 | with.
00:29:56.940 | What about finance?
00:29:57.940 | Well, with finance, I refer you to the Tai Lopez example of this guy on YouTube.
00:30:04.500 | He posts a selfie of him and his Lamborghinis in his garage in the Beverly Hills.
00:30:08.680 | And here, look, I've got all this money.
00:30:10.060 | I've got all this stuff.
00:30:11.060 | So therefore, you should listen to me.
00:30:12.060 | But we don't have any actual objective proof of anything.
00:30:15.460 | We don't have any history of anything.
00:30:17.380 | And yet here's the person that is today making huge splashes all across the internet
00:30:21.260 | with a massive online business to be able to build wealth.
00:30:25.300 | So my recommendation to you is that you not believe anyone based upon your impressions.
00:30:30.780 | We could go down the list.
00:30:31.780 | I'll skip the political topic and give you just a simple example of things like podcasts.
00:30:36.060 | One of the things that I appreciate so much from many of you is those of you who write
00:30:40.940 | reviews of the shows on iTunes.
00:30:42.740 | That's really, really helpful because you know what?
00:30:45.380 | Some of my competition doesn't wait on individual reviews.
00:30:51.500 | There are a number of online podcasting groups in which if you participate, you can quickly
00:30:58.860 | amass hundreds and hundreds of five-star reviews for your shows.
00:31:02.180 | Well, that helps with the rankings but it manipulates things.
00:31:05.340 | So when you're looking and trying to figure out something as simple as what I work in
00:31:08.940 | every day is what podcasts are doing well and you go based upon the number of views,
00:31:11.780 | you always have to ask, "Are these paid or are these actual listeners?"
00:31:16.260 | It's always a challenge.
00:31:18.100 | You can't believe people based upon your impressions.
00:31:20.100 | So I want to give you some tools, just some simple ideas that I hope will be helpful to
00:31:24.900 | you when considering financial information.
00:31:28.220 | Before I do that, sponsor first half hour is Paladin Registry.
00:31:31.260 | Paladin Registry is my best attempt to solve this problem of reputation and due diligence
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00:32:20.940 | And it is the absolute best system that I have seen anybody come up with for vetting
00:32:24.780 | financial advisors.
00:32:25.780 | Personally, I believe everyone needs a good financial advisor.
00:32:29.200 | If you don't have one, start your interview process at Paladin.
00:32:32.780 | Go to RadicalPersonalFinance.com/Paladin.
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00:32:41.300 | net wealth.
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00:32:46.180 | It is important that you fill in the information accurately so that they can match you up with
00:32:51.080 | an advisor who will help you.
00:32:52.980 | And by the way, thank you to those of you who give me feedback on your experience in
00:32:56.780 | meeting with the Paladin advisors.
00:32:58.460 | Overall, it's been good.
00:32:59.940 | I had a couple of people say, "Well, the advisor just didn't impress me all that much and then
00:33:03.220 | they didn't follow up with me."
00:33:05.100 | No problem at all.
00:33:06.820 | I appreciate having that feedback and that's good to know.
00:33:09.820 | The use of this referral link is not a commitment to work with this person.
00:33:14.020 | It's just simply a good place for you to start your interview process.
00:33:17.580 | So RadicalPersonalFinance.com/Paladin.
00:33:20.660 | Now the challenge that we face with finance and that you face and that I face is that
00:33:25.660 | majority of our population around us just seems to be totally brainwashed and incapable
00:33:31.080 | of critical thought.
00:33:32.500 | Now is that by design or happenstance?
00:33:34.900 | I don't know.
00:33:36.300 | I don't know.
00:33:38.300 | I lean towards the direction of its design based upon the research that I found but I'm
00:33:43.140 | not quite 100% there.
00:33:45.820 | And whether it is or not, it really doesn't matter because we can at least see that that
00:33:49.300 | is the case.
00:33:50.300 | And so then whether it was, again, happened or whether it was designed in this case, it
00:33:55.300 | doesn't really matter that much to what we should do.
00:33:58.300 | So when you're looking at financial advice and gurus and things like that, here are a
00:34:01.700 | couple of tips.
00:34:02.780 | Number one, is the financial guru leading with lifestyle and luxury and flashiness first
00:34:15.060 | or are they leading with something else, something with more substance?
00:34:18.980 | If you find that a guru or a teacher of some kind is trying to lead with their symbols
00:34:24.380 | of success, flashy cars, fancy watches, lots of jewelry, big houses, things like that,
00:34:32.620 | my experience has shown that you can pretty much write off the value of what they have
00:34:36.700 | to sell.
00:34:37.700 | Now, it's not to say that you can't gain some good ideas from them but you should proceed
00:34:43.520 | with caution.
00:34:45.600 | This is probably the most reliable indicator that I can come up with because in my experience,
00:34:53.100 | I've not – I've had the unique good fortune of being able to connect with a number of
00:34:57.740 | people that I know were actually wealthy and I've also had the unique good fortune of
00:35:01.860 | being able to connect with some people who wanted you to believe they were wealthy but
00:35:06.620 | weren't actually wealthy and I've been able to see under the hood or beneath the
00:35:11.980 | clothes to mix our metaphors.
00:35:17.140 | People that are truly wealthy very rarely flaunt their wealth.
00:35:21.500 | Now you've got to pay – you've got to figure out the difference between somebody
00:35:24.300 | who is a mega wealthy, mega wealth, who has $300 million and for that person, for them
00:35:31.340 | to drive $300,000 cars is comparatively similar to you driving a $3,000 car.
00:35:38.420 | So that type of person isn't trying to flaunt their wealth but when you have a business
00:35:41.760 | owner or somebody who's trying to sell you something online talking about their $300,000
00:35:46.740 | car, there's a good chance and a good possibility that it's really not indicative of their
00:35:53.260 | overall wealth.
00:35:56.860 | The wealthy people of the world generally want to hide it.
00:36:00.800 | Why would you ever want anyone to know that you are wealthy?
00:36:04.820 | Think about it.
00:36:05.900 | If you're wealthy, you've got to deal with all kinds of people coming to you and asking
00:36:08.540 | you for money.
00:36:09.540 | You've got to deal with being one of the 1% that everyone in society is mad at.
00:36:13.860 | You've got to deal with the risk of people trying to come and get your wealth and if
00:36:18.900 | you're actually wealthy, you know that the way that you get wealthy and stay wealthy
00:36:23.340 | is frugality and thrift and wise investing.
00:36:28.220 | So if you're actually wealthy, what on earth would compel you to advertise your wealth?
00:36:33.940 | Well, the only thing that would compel you to advertise your wealth was if you could
00:36:37.780 | somehow earn off of that advertisement.
00:36:41.740 | If you could display that wealth and therefore convey that you have that wealth and then
00:36:45.660 | you can earn something.
00:36:47.580 | People following you as a guru of wealth, attracting an attractive mate to you, showing
00:36:53.580 | off that you've got some advantage, showing your clients that you're really, really competent,
00:36:58.860 | showing that advertising who you are.
00:37:02.420 | But other than that, if you don't have something to gain for it, why would you want anyone
00:37:05.220 | to know that you're wealthy?
00:37:06.220 | I'm not saying you wouldn't want to enjoy the fruits of your wealth.
00:37:09.460 | It's nice to ride in a luxury car.
00:37:10.980 | It's nice to own a helicopter if you enjoy that kind of thing.
00:37:14.180 | But usually there's a difference between being able to enjoy that and advertising that.
00:37:18.900 | The people who are really wealthy never display their wealth.
00:37:22.260 | It's all hidden behind a very large wall around their house.
00:37:26.260 | If you want a good example, come down to where I live here in West Palm Beach.
00:37:28.740 | You can go to Palm Beach Island or drive up to Jupiter Island.
00:37:31.420 | You drive around Jupiter Island, one of the most highest concentrations of wealth in the
00:37:37.340 | country.
00:37:38.540 | Drive around Jupiter Island.
00:37:39.540 | The roads are public.
00:37:40.660 | You will hardly see a single house because they're all hidden back from the road.
00:37:45.900 | That's why these islands – I mean you got Jupiter Island and what?
00:37:48.020 | Jupiter Island, Jekyll Island and Mount Desert Island.
00:37:50.340 | This is where the wealthy go to get away and put up walls around themselves.
00:37:53.260 | The fact that it's an island is really, really useful because people don't accidentally
00:37:56.860 | go onto the island.
00:37:58.400 | But you never see the houses.
00:37:59.400 | I had a unique experience one time when I was – I just graduated from college.
00:38:05.380 | I was invited by a friend to go for dinner at the house of an estate on Palm Beach.
00:38:11.380 | Prior to getting there, I did not know what the circumstances were.
00:38:16.360 | Now if I had known, I probably – I don't know what I would have done.
00:38:19.020 | But anyway, I didn't know.
00:38:20.020 | I just thought that would be fun.
00:38:21.020 | We're going to go have dinner with some guy.
00:38:22.380 | He's dead now.
00:38:23.380 | So I can – I'm not betraying any privacy of anything that matters.
00:38:28.340 | But the man's name was John Kluge.
00:38:30.620 | He was formerly the richest man in the world back in the '90s.
00:38:34.340 | So when we got there, they gave me the address and Palm Beach is an interesting place.
00:38:39.400 | Many of the streets look the same.
00:38:40.540 | They have walls covered with some sort of vegetation.
00:38:42.980 | The gardeners are the ones who make a ton of money in Palm Beach, keeping everything
00:38:46.520 | looking beautiful.
00:38:47.520 | We just pulled through this little gate, through this little hole in the wall and all of a
00:38:50.740 | sudden I realized that we're on this massive multi-multi-acre estate.
00:38:56.160 | From the outside, you would have never had any idea.
00:38:59.480 | But the house was huge and the grounds were massive.
00:39:03.780 | To give you an idea of how big they were, I had known a story from another connection
00:39:07.540 | of a man who had owned a house in the back of this guy and we actually worked it out
00:39:10.880 | over dinner that night, the connection from this other story.
00:39:14.140 | The guy told the story about how some rich guy had bought his house just simply to knock
00:39:18.780 | it down and put in a garden.
00:39:20.040 | His house was on Palm Beach worth many millions of dollars.
00:39:24.520 | I don't know whether to say tens or – I would say – yeah, tens probably.
00:39:29.080 | Many millions of dollars and the guy had bought this house simply to knock the house down
00:39:32.220 | so he could have a bigger garden out behind his house.
00:39:34.300 | Well, the man was John Kluge and this estate was huge.
00:39:38.240 | But to this day, if I didn't have the address, I could not find it.
00:39:41.740 | I wouldn't have any idea where to go.
00:39:44.380 | But when I'm walking around this multi-acre estate in the middle of Palm Beach, all of
00:39:47.500 | a sudden it's different and you can see how big it is.
00:39:50.760 | People who are truly wealthy generally hide that wealth just a little bit and they only
00:39:54.960 | display it in areas where it's safe, in areas where they're with their peers.
00:40:00.760 | Now I again have had the unique experience of living here in this part of the world and
00:40:05.640 | I'll give you – I'm friends with a man who was formerly the CEO of one of the world's
00:40:10.480 | largest investment banks up in New York City.
00:40:14.480 | You know what car he drives?
00:40:16.000 | A Prius because he doesn't care.
00:40:19.000 | Now I can't remember if his wife has a Mercedes but he drives a Prius.
00:40:22.560 | It's easier and better to be underestimated.
00:40:25.760 | Usually I happen to have some – I wind up going to the Everglades Club which is a private
00:40:34.440 | club in Palm Beach.
00:40:36.480 | Once or twice a year I get an invitation from somebody who's a member there.
00:40:39.440 | I always enjoy going because my friends that I've had the pleasure of building relationships
00:40:45.400 | with, it's just kind of fun to peer into the Palm Beach society.
00:40:51.240 | You would be surprised at how restrained generally the expressions of wealth are even though
00:40:57.400 | sometimes you're sitting at a table and you know for a fact that everyone around that
00:41:02.280 | table is worth hundreds of millions of dollars.
00:41:05.760 | Even among the glittering rich, you find that the expressions of wealth are often a little
00:41:10.440 | bit subdued.
00:41:11.440 | Now when you get into the mass affluent, you know that they're always subdued.
00:41:16.160 | Read – again, read Tom Stanley's work, The Millionaire Next Door.
00:41:19.200 | He'll prove it to you again and again and again and again and again.
00:41:23.280 | You start to see, wait a second, why is this person advertising their wealth?
00:41:28.600 | Unless there's a benefit in it for them, there's no reason for a wealthy person to
00:41:32.400 | talk about it.
00:41:34.400 | That should be a big red flag.
00:41:38.480 | I think on tomorrow's show, I'm going to do a review of John Schaub's seminar.
00:41:41.520 | You know what I most appreciate about John Schaub?
00:41:44.360 | He invited his seminar participants over to his house, had a chance to spend some time
00:41:48.880 | there, and his house, his cars, everything was understated.
00:41:55.680 | That means a whole lot more to me now than the guy who previously when I was sucked into
00:42:01.680 | the world of gurus was talking about this and this flashy Porsche and that flashy giant
00:42:06.920 | $300,000 bus, etc.
00:42:10.200 | So when you see somebody advertising their wealth, you should be very, very suspicious.
00:42:15.760 | Doesn't mean they don't have it.
00:42:17.120 | Doesn't mean there's not a reason for it.
00:42:18.500 | Just be very suspicious and it should immediately put you on guard.
00:42:21.720 | Next, when you see somebody using broad and imprecise language, that should make you suspicious.
00:42:27.040 | This is my biggest problem, again, reading Bank on Yourself for a comprehensive project
00:42:31.080 | I'm working through on this infinite banking concept.
00:42:33.240 | I can hardly get through the first chapter because the language in the book is so broad
00:42:38.640 | stroke.
00:42:39.760 | It gets deeply into an us versus them.
00:42:41.800 | Wall Street is ripping you off.
00:42:44.000 | Who is Wall Street?
00:42:45.880 | Wall Street is a place.
00:42:46.880 | Yes, I know it's a metaphor for a community, but who specifically?
00:42:50.960 | Because there's a big difference between all the different people that are involved in
00:42:53.360 | Wall Street.
00:42:54.760 | If somebody gets into an us versus them mentality, usually it's because they're trying to create
00:43:01.960 | a cult of personality.
00:43:04.280 | I'm reminded of Robert Greene's work in the book 48 Laws of Power, which is a really twisted
00:43:10.080 | book.
00:43:11.080 | But basically if you want to create and develop for yourself power, here's how to do it.
00:43:14.160 | It's an interesting book.
00:43:15.880 | But two of his laws are especially poignant to our conversation today.
00:43:20.680 | Law 27, the summary is, "You need to play on people's need to believe to create a cult-like
00:43:26.360 | following.
00:43:28.000 | People have an overwhelming desire to believe in something.
00:43:31.120 | Become the focal point of such desire by offering them a cause, a new faith to follow.
00:43:36.800 | Keep your words vague but full of promise.
00:43:39.640 | Emphasize enthusiasm over rationality and clear thinking.
00:43:42.980 | Give your new disciples rituals to perform.
00:43:45.000 | Ask them to make sacrifices on your behalf.
00:43:47.280 | In the absence of organized religion and grand causes, your new belief system will bring
00:43:51.120 | you untold power."
00:43:53.520 | You see that happening constantly, people's desire to pit certain segments against other
00:43:58.280 | segments, whether it's in politics, the Republicans versus the Democrats, or the Main Street versus
00:44:03.160 | Wall Street, or the 1% versus the 99%.
00:44:06.600 | Whatever the example is, it's all about building that cult of personality.
00:44:12.840 | Law 32 is useful too with the point that I just made.
00:44:16.640 | Play to people's fantasies.
00:44:17.640 | "The truth is often avoided because it is ugly and unpleasant."
00:44:21.240 | So Joshua's instructions here, "The truth about wealth building is it takes time.
00:44:25.840 | It takes discipline.
00:44:26.840 | It's hard work."
00:44:29.600 | So the truth is often avoided because it is ugly and unpleasant.
00:44:33.280 | Never appeal to truth and reality unless you are prepared for the anger that comes for
00:44:37.800 | disenchantment.
00:44:39.000 | Life is so harsh and distressing that people who can manufacture romance or conjure up
00:44:43.360 | fantasy are like oases in the desert.
00:44:46.360 | Everyone flocks to them.
00:44:47.720 | There's great power in tapping into the fantasies of the masses.
00:44:51.960 | So when you see people pitting one versus another, and you see people building those
00:44:55.160 | fantasies, playing on those strings, be careful.
00:45:00.160 | Be careful.
00:45:01.160 | A couple more and then some tips, but before I get to the last two points to watch out
00:45:05.400 | for and the tips for you, sponsor second half hour of the show is SoFi.
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00:46:19.760 | Last two.
00:46:20.880 | Last two points here on just watching out for financial fraud.
00:46:25.400 | Look for vague allegations without technical precision.
00:46:29.760 | This to me is a major warning bell.
00:46:32.220 | When you see people make these broad, broad strokes, I talked a moment ago about they,
00:46:37.940 | they are doing this, Wall Street is doing this, it's a problem.
00:46:42.660 | And when you see these vague allegations without any specific clear allegations, you know you've
00:46:50.980 | got a problem, especially if there's no footnotes.
00:46:52.980 | This is just playing on the emotional needs that people have without footnoting things.
00:46:58.780 | So look for that.
00:46:59.780 | And if you see those vague and broad allegations, you've got a major problem.
00:47:03.540 | Finally, the one that just drives me nuts is look for deceptive charts.
00:47:08.900 | As I've been reading this Bank on Yourself book, it is so frustrating.
00:47:13.220 | I finally found about the eighth chart in the book, I finally found a chart that was
00:47:16.780 | well-created.
00:47:18.520 | If you see a chart with an unlabeled axis, that should be a major red flag.
00:47:22.940 | If you see a chart that doesn't go from zero to whatever the value is that's being displayed,
00:47:27.780 | that should be a major red flag for you.
00:47:29.740 | If you see a chart that's showing a selected period of data, that should be a major red
00:47:34.140 | flag for you.
00:47:35.180 | It's not that those types of charts shouldn't be used from time to time.
00:47:38.940 | You can't always display a chart of the entire stock market history when you're trying to
00:47:42.720 | look at the stock returns for the last year.
00:47:44.420 | That's not useful to you.
00:47:45.920 | You do sometimes need to home in on what is the appropriate period.
00:47:50.880 | But when you see a chart that's being pooled to support a point and it's got a specific
00:47:54.660 | date range, the most egregious example in this Bank on Yourself book was the chart that
00:47:59.420 | was chosen for stock returns, real estate returns, and gold returns.
00:48:03.740 | Every one of them had a different date range and every one of them was the worst possible
00:48:07.500 | expression, the worst timing whatsoever instead of being a standardized version to show, "Hey,
00:48:16.420 | here's how these things compare."
00:48:18.460 | You know you've got a deceptive practice if you've got deceptive charts or at least you
00:48:22.480 | should be suspicious and you should go and recreate the chart yourself and dig into it.
00:48:28.180 | So just some simple tips for you.
00:48:29.820 | Again, this is not a comprehensive list, but just some simple tips.
00:48:33.020 | I wanted to use these examples so you can start to be aware of them.
00:48:35.260 | Number one, the internet is your friend.
00:48:37.780 | When you're doing searches, if you get interested in something, read one side of the story and
00:48:42.140 | then try to find the other side of the story.
00:48:44.700 | If you're researching a business opportunity, type in the name of that business opportunity
00:48:49.240 | and then read the reviews and then type in the name of that business opportunity and
00:48:53.500 | add scam to the back end and read what comes up.
00:48:56.380 | If you don't find any negative information about a company, that should also be a big
00:49:02.200 | red flag.
00:49:03.900 | It's very hard to have anything that's going to work for everybody.
00:49:08.540 | Most companies are going to annoy some people.
00:49:10.260 | Most companies are going to drop the ball and do something poorly with customer service,
00:49:14.340 | even take something as simple as a show like mine.
00:49:17.620 | If you were to go and look at a show and you're going to find just everything is five-star
00:49:24.300 | reviews, there's no three stars, there's no four stars, and there's no one stars, well,
00:49:28.700 | that should be a good indication to you that those reviews are probably not accurate.
00:49:34.500 | Now hopefully and thankfully to those of you who love my show and have listened to it,
00:49:39.820 | for radical personal finance, the majority of the reviews are five-star, but still there
00:49:44.620 | are a bunch of one-star and three-stars because I rub people the wrong way.
00:49:50.460 | I'm good at angering some people and I screw stuff up.
00:49:54.460 | I'm not great at everything and that's normal.
00:49:57.660 | That's normal experience.
00:49:59.580 | There are some people that really love you and there are a lot of people who tolerate
00:50:02.120 | you and there are some people who can't stand you.
00:50:04.400 | So look for a business and read both sides because a good business should be able to
00:50:09.760 | stand up to the problems.
00:50:12.100 | Every business is going to have problems.
00:50:13.680 | Every business opportunity is going to have problems.
00:50:15.500 | Every investment is going to have problems.
00:50:18.460 | You need to read both sides of every story.
00:50:21.380 | You should be able to make the positive case for something and the negative case for something.
00:50:24.860 | One of my goals with my kids is I really hope that my kids are trained in the formal art
00:50:29.620 | of debate.
00:50:30.620 | I'm not exactly sure how to do that, but I would like to do that with them.
00:50:33.660 | I regret – one of my regrets is I didn't spend time in school with formal debate.
00:50:38.380 | I've learned some of the habits and studied a little bit after the fact, but I never got
00:50:42.140 | the chance to participate in debate competitions.
00:50:44.100 | But in a debate, you should always be able to make the strongest cases for both sides.
00:50:50.060 | You never win a debate unless you can argue against the strongest case that your opponent
00:50:54.100 | has.
00:50:55.300 | So when you're considering an investment option, you should know what the major advantages
00:51:00.060 | and the major disadvantages are.
00:51:02.100 | If you read a book that's just painting the rosy picture and never points out the
00:51:05.420 | problems of that strategy, you probably have a sales brochure and you don't have an accurate
00:51:11.940 | book.
00:51:13.740 | Look for both sides of the story.
00:51:16.540 | Check for social proof.
00:51:18.420 | Look for subscriber counts.
00:51:20.100 | Look for reviews.
00:51:21.220 | Look for the social media follower counts.
00:51:24.300 | Look at the website rankings.
00:51:25.500 | The first thing you should do generally when you are looking at a website is check its
00:51:29.580 | ranking on Alexa or compete.com and find out does this website – is it relevant at all?
00:51:36.980 | Use some of the third-party tools that will help you to know is the person here – how
00:51:41.340 | big of a difference are they making?
00:51:42.700 | Now, remember, many things can be faked.
00:51:44.780 | I'm sure that Alexa rankings can probably be manipulated.
00:51:48.340 | I don't know how to manipulate those but social media followers, those can be manipulated.
00:51:52.060 | I can go out and buy thousands of Twitter followers, thousands of Instagram followers,
00:51:55.980 | thousands of Facebook followers.
00:51:57.660 | You can buy all that stuff.
00:51:58.660 | You can buy subscriptions to podcasts.
00:52:01.300 | You can buy reviews.
00:52:03.020 | You can go out and buy that stuff.
00:52:04.680 | But still, directionally, they're a good indication.
00:52:09.780 | Look for academic quality and academic level work.
00:52:14.300 | Look for the academic citations.
00:52:15.760 | Look for at least some level of careful language when dealing with financial topics.
00:52:22.260 | Now, academic stuff can be faked too but it's – there's a difference between that versus
00:52:28.260 | just some of the over-the-top sales stuff that you read online.
00:52:31.880 | Look for things.
00:52:33.540 | And then finally, buy and read books, not expensive products.
00:52:36.620 | Products have their place.
00:52:37.620 | You're going to be going out with a bunch of products in the future and products should
00:52:41.180 | be usually priced more highly.
00:52:42.980 | But if you're not building and buying products after building a foundation with books, you're
00:52:47.020 | doing it wrong.
00:52:48.400 | Start with the stuff that is cheap.
00:52:50.460 | Books have the highest density of information and the lowest cost.
00:52:53.760 | Start with books.
00:52:55.260 | Read books.
00:52:56.380 | Then move on.
00:52:57.380 | Buy info products.
00:52:58.800 | Then move on.
00:52:59.800 | Buy seminars, coaching, things like that after the fact.
00:53:03.020 | And you'll start to build on your knowledge.
00:53:05.740 | Do it little by little.
00:53:07.180 | So I hope that some of these tips are useful to you.
00:53:12.180 | I don't know if it's possible to create a comprehensive scam-busting curriculum.
00:53:17.100 | I don't know.
00:53:19.340 | These are just some tools that have been useful for me.
00:53:22.340 | I led with the major ones.
00:53:23.700 | But I just ask you to build and develop your skills of critical thinking.
00:53:30.340 | I'm working hard to develop mine all the time, learning to be more careful with my
00:53:34.580 | logic, learning to smell out the logical fallacies that I commit, learning to be a better researcher.
00:53:40.900 | But guys, we're doomed if more people don't wake up and just pay attention.
00:53:48.860 | I mean, come on.
00:53:49.860 | We're going to wind up with Donald Trump as our president of the United States.
00:53:54.060 | What on earth is there to say?
00:53:59.660 | We're doomed.
00:54:00.660 | Anyway, if we're not doomed, I'll stick around and I'll do my best to help us work the way
00:54:06.820 | through the dooming.
00:54:07.820 | And we'll be back tomorrow with some optimistic, upbeat personal finance advice.
00:54:14.500 | Oh, politics, politics, politics.
00:54:18.260 | Thank you so much for listening to today's show.
00:54:20.020 | This content has been valuable to me, to you.
00:54:22.100 | I'd appreciate your supporting the show on Patreon.
00:54:24.380 | Become a patron of the show.
00:54:26.260 | Direct supporter, radicalpersonalfinance.com/patron is where you find out all the information
00:54:30.620 | on that.
00:54:31.620 | Radicalpersonalfinance.com/patron.
00:54:35.540 | Thank you to those of you who support the show there.
00:54:37.820 | It's really, really important.
00:54:38.820 | You know, I brought advertisers on the show here because there wasn't enough patron dollars
00:54:42.740 | for me to continue doing the show the way I wanted to do it.
00:54:45.860 | But still, the patronage gives me a stable foundation of some income, which allows me
00:54:51.060 | to be a little bit picky and choosy with the advertisers.
00:54:53.260 | And that's really important.
00:54:55.520 | Because if I get in a place where I'm doing all kinds of work and I have, if I have financial
00:54:59.700 | pressure to make things work, then I just start accepting anywhere, anyone, it starts
00:55:03.020 | to hurt the integrity of my opinions.
00:55:06.780 | So the patron program is really, really important.
00:55:09.220 | So if you'd like to become a patron and support the show directly, please go to radicalpersonalfinance.com/patron.
00:55:14.780 | And I'll be back with you soon.
00:55:16.540 | [music]
00:55:23.540 | [music]
00:55:28.540 | (upbeat music)