Don't just dream about paradise, live it with Fiji Airways. Escape the ordinary with Fiji Airways Global Beat the Rush Sale. Immerse yourself in white sandy beaches or dive deep into coral reefs. Fiji Airways has flights to Nadi starting at just $748 for light and just $798 for value. Discover your tropical dreams at FijiAirways.com.

That's FijiAirways.com. From here to happy. Flying direct with Fiji Airways. Radicals, today I'd like to have a conversation with you on the topic of financial fraud, lies, hucksters, shysters, manipulation, just some of the injustices that are perpetrated on the average person. And I want to hopefully give you some tools and some ideas to protect yourself.

We're going to talk about this from a wide range of perspectives. And my hope is that you will come away from today's show better equipped to defend yourself against all of those who would like to swindle you out of some of your hard earned money. Welcome to the Radical Personal Finance Podcast.

My name is Joshua Sheets and I'm your host. Thank you for being with me today. We're going to tackle this topic head on in a straightforward way. I'm going to try to give you a bunch of examples so that you can see how broad it is. I'm not mad at any one particular situation, but I am mad that we're generally not taught how to think critically.

I don't think I'm the world's greatest expert at teaching this, but I'll at least give you some thoughts that I believe will equip you with some better tools. Woke up this morning – and I've been thinking about this topic for the last few days. Yesterday's show I wasn't exactly sure what to do the show on.

I thought about doing a show on financial fraud, but I wasn't quite ready for it. So I went ahead and played the interview for you that I played with Jake Tassilis yesterday on yesterday's show. I woke up this morning to a tweet from a listener who had sent me over a follow-up story on the man named Dan Price, who is the business owner that Jake Tassilis and I mentioned in yesterday's show, owner of Gravity Payments out in Seattle, Washington, the guy who raised all of his employees' rates – the rates of pay up to $70,000 of minimum wage.

I hadn't followed this story closely and in a moment I'll read some information on it, but I hadn't followed it closely. I just said what I said in the interview yesterday that, well, hey, if he wants to do it, that's fine. But everyone jumps on this as an argument for why we should massively raise minimum wages across the country.

This is an argument that's taking place in the US American culture right now. Bernie Sanders, a Democratic presidential candidate, is bringing this type of content to the forefront. So it's definitely part of today's political debate and political climate. I hadn't kept tabs on this, but this listener sent me an article, an extremely damning article from Bloomberg Businessweek about some of the background of what may have actually happened with Mr.

Price and some of his actual business affairs. In short, there is compelling evidence to indicate that the whole publicity stunt was essentially a way of him trying to work his way out of some potential financial and legal problems that were faced by his actions, by his being served a lawsuit, and the lawsuit was served before his announcements about what he should do.

I will – I might during the context of the show talk about more details of that or I'll just post links to the stories and you can check it out in the show notes for today. But what just made me realize is how important it is not to believe things like news articles, not to even believe things like some books and situations like that.

I've got a number of things that are coming together that in this – in the context of this topic that are really contributing to my wanting to do it. So there was a story this morning of Dan Price and the gravity payments and just this weekend, there is – if any of you are on YouTube, probably you watch YouTube videos.

It's likely that sometime in the last few months, you saw some information. You saw an ad that was played for you with a dude holding a camera up, doing a selfie, standing in his garage in front of some Lamborghinis. The guy's name is Tai Lopez. He runs a very large YouTube channel.

But I was just looking at some of the information that was out there, people digging into some of the stuff that he's putting out with his brand and his organization and uncovering the lies and the misstatements and the lack of actual follow-up facts. I was looking at that and I'll cover that in a few minutes with some details.

I was thinking about the Martin Luther King holiday that was just this last weekend and Martin Luther King, one of the US-American national cultural heroes, but the man had some serious, serious problems which I'll mention a few in a minute. Then looking – I'm reading a book by Pamela Yellen called Bank on Yourself, the Bank on Yourself Revolution, reading through the language in it and just stunned that this book was a bestseller just simply with regard to the language in it and some of the just atrocious marketing copy that's written in this thing.

Watching the political battles of Donald Trump and Hillary Clinton and just scratching my head and saying, "What on earth is going on?" So we're going to talk about some of those issues. My overall encouragement is I want you to not believe anyone based upon their impressions, but I want you to do your own homework on me, on anybody else.

I want you to do your own homework. My hope is to help you become a much more critical thinker. We'll talk about those issues. But I'm going to begin with playing for you a media clip here that I think is very important for you to hear. This was something I first became aware of when I was in college.

In my business law class in college, my favorite class in all of my four years of university education was business law. We studied the case of the woman who spilled hot coffee on her lap. I came away from that recognizing how little I knew about what actually happens in some situations versus what is reported about what happens in some situations.

This moment in my life was a real turning point and I recommitted myself to trying my best to do my homework on issues. I make plenty of mistakes. I get stuff wrong all the time. I don't claim any degree of necessary expertise on this, but I do my best to dig a little deeper and try to do homework on things.

I'm going to play this audio clip for you. This would be a good thing if you are listening to me while you're sitting in front of a computer. I would recommend to you that you'll enjoy actually if you can separate your attention and watch a video, you will enjoy seeing this in video form so that you can see exactly who's talking, some of the news clippings and things like that that are put on the screen for you.

If you're driving in the car, don't worry. You will certainly be able to grasp the story simply with the audio, but you won't miss a lot. But if you are in front of a computer, then this would be a good piece of audio for you to stop and then go ahead and watch the video.

The video is 12 minutes and 14 seconds long, so feel free if you pause just to skip forward 12 minutes if you're going to watch it on a computer. Let's start with here, this story, because what you know about this story and what you've heard about the story may be two different things.

This is a report from the Retro Report, which was a project of the New York Times, and this was published back in 2013. So here is the audio from the video. In Albuquerque, New Mexico, an elderly woman was severely burned when she spilled a cup of McDonald's coffee in her lap.

An 81-year-old woman has been awarded $2.9 million after she sued McDonald's, claiming their coffee was too hot. Stella Liebeck spilled just eight ounces of coffee, but she attracted a flood of attention. The jury's award set off a media frenzy and became a rallying cry for those who believed our legal system had run amok.

I think it's absurd. But as her story cycled through newspaper headlines, talk show storylines, and late night punchlines, one thing was lost, the facts. This story is the most widely misunderstood story in America. The public perception of it is Stella Liebeck won a lottery. She bought the coffee, she spilled it on herself, and now look, she's a millionaire.

But of course the facts are much more complicated than that. Stella Liebeck was a 79-year-old widow sitting in the passenger seat of a parked car when she was burned on February 27, 1992. She had recently quit her job as a department store clerk and moved to Albuquerque to be near her daughter.

The day that the burns happened, my mother and my nephew went through the drive-thru at McDonald's and got breakfast and coffee. And they pulled into the parking lot, and in the Ford Probe, there's slanted surfaces everywhere. There's no place to put the coffee. She put it between her knees and lifted the lid off.

And in the process of doing that, spilled the coffee and all of the hot liquid went into the sweatsuit that she was wearing and pooled in the seat. All I remember is trying to get out of the car. I screamed, not realizing I was burned that bad. I knew I was in terrible pain.

The severity of the burns caused Stella Liebeck to go into shock, and her grandson immediately took her to the emergency room. She was burned over 16 percent of her body. Six percent of the burns were third degree. She was in the hospital for a week. Medical bills were $10,000.

So Stella reached out to McDonald's and asked to be reimbursed. We couldn't believe that this could happen over spilling the coffee. So we wrote a letter to McDonald's asking them to check the temperature of the coffee and to give recompense for the medical bills. And the response from McDonald's was an offer of $800.

Stella Liebeck had never sued anyone before Albuquerque attorney Ken Wagner took her case. Before they went to trial, they tried twice to settle out of court. But McDonald's refused. We bought a product. It was used as intended. It was unreasonably hot and therefore unreasonably dangerous. And those were the essential facts.

I was not in it for the money. I was in it because I wanted them to bring the temperature down so that other people would not go through the same thing I did. McDonald's policy was to serve coffee between 180 and 190 degrees. That's about 30 degrees warmer than most home coffee brewing machines.

A burn expert testified that liquid at 180 degrees could cause third-degree burns within 15 seconds. Lawyers produced documents that showed that between 1983 and 1992, nearly 700 people claimed that they had been burned by hot coffee at McDonald's. McDonald's was on big-time notice that they had a product that was dangerous and it was burning people.

We argued that to the jury, that they were callous and indifferent in simply not turning down the temperature. An expert for McDonald's testified that burns are exceedingly rare, one for every 24 million cups of coffee served. They just said it's statistically insignificant and we're not going to change what we do.

People interact with hot beverages all the time in a fast food restaurant and that doesn't necessarily mean that the restaurant is doing something wrong. Attorney Tracy Jenks tried the case for McDonald's and argued that Mrs. Liebeck bore personal responsibility because she spilled the coffee on herself and that McDonald's coffee wasn't any hotter than the coffee at other fast food restaurants.

She said the reason the coffee was so hot was because that's what customers wanted. McDonald's had a really, really strong reason for why they brewed their coffee at the temperature they did. It was an industrial standard based on the maximum extraction of the flavor and the maximum holding temperature.

But the jury saw how liquid at that temperature can scald when they were shown graphic photos of Mrs. Liebeck's burned groin. The photos depicted where they had to graft the skin from the side of her legs to close the third degree burn. And I think if people would have seen the severity of the burns, they would have realized it was not a laughing matter.

After seven days of testimony and four hours of deliberation, jurors came up with a comprehensive answer to a complicated case. They unanimously agreed to award Stella $200,000 in compensatory damages. But because she caused the spill, they reduced that to $160,000. Jurors set punitive damages to send the message to McDonald's to turn down the temperature of the coffee.

I remember I could see Judge Scott going like this with his pencil and I thought, "Oh, I hope he's counting digits on the verdict form." And he was. They based the amount on the revenue from two days of coffee sales, $2.7 million. The size of the award got the media's attention, but it overshadowed the rest of the story.

Details of the case and the facts related to how the jury made its decision went mostly unreported. Several days after the verdict, I had news crews from France, Japan, Germany in my driveway wanting to interview me. I mean, I was stunned. After the verdict came in Wednesday, August 17, the Albuquerque Journal ran the first story.

The Associated Press and Reuters Wire Services then filed reports, and the story was picked up in dozens of newspapers worldwide. It became an international news event. But as the story's reach got bigger, the word count got smaller. In some papers, it was not more than a blurb. Six hundred and ninety-seven words in the Albuquerque Journal became 349 words in the AP and became as few as 48 words in various renderings by major metropolitan newspapers.

Forty-eight words can't explain a lot. And then "woman coffee millions" sounds like a ripoff, not like a logical consequence of a thoughtful trial. The report aired on more than a dozen national broadcasts and twice as many local news shows. The condensed telling of the story created its own version of the truth.

Instead of pointing out she spilled the coffee in the passenger seat of a parked car, this was the new narrative. It seems she was holding a cup between her legs while driving. Clamped it between her legs, drove down the street, spilled it, burned herself, sued McDonald's, and collected. Bella has received letters saying stuff like...

I was driving down the road. I had no business driving down the road with coffee between my legs and all that stuff. See, they're just plain ignorant. My mother was made the villain in this story. It's like bullying. It feels like bullying. I mean, it's not like the McDonald's person leaned over the car and poured it.

It was an accident. Very much like urban legends, it is a very compelling story. Once everybody decides what is true about something and the media has been sort of an echo chamber for it, then how do you deal with the fact that they might be wrong? Now she claims she broke her nose on the sneeze, got it to sizzle, or bending over looking at the chickpeas.

Oh, my coffee was too hot. It's coffee! The lawsuit also got a lot of play on talk radio. It was a very hot issue for a long time. It's probably one of the most sensational, high-profile tort cases of the last 20 years. So when tort reform comes up, most people say, "Oh, sure, the McDonald's case." Republican lawmakers crafting the "Contract with America" seized the moment.

They tapped into public outrage over frivolous lawsuits to promote the Common Sense Legal Reform Act. Liebeck's case became Exhibit A. The lady goes through a fast food restaurant, puts coffee in her lap, burns her legs, and sues and gets a big settlement. That in and of itself is enough to tell you why we need to have tort reform.

She spilled hot coffee on her lap while sitting in her car and claimed it was too hot. Every day we hear about another outrageous lawsuit. Stella's portrayal as a scheming wannabe millionaire was based on the jury's award, but that amount was only a suggestion. In reality, the judge significantly reduced the punitive damages.

The judge reduced the award to about $650,000. According to a source familiar with the case, it was settled for less than $500,000. Stella was not allowed to talk to the press. But over the last two decades, her lawsuit has become part of the cultural discourse. Pardon me. Excuse us.

Oh! Coffee! You got a chance? Do we have a chance? You get me one coffee drinker on that jury, you're gonna walk out of there a rich man. Stella's daughter says that although over the years some stories have given greater context and a new perspective, such as the documentary Hot Coffee, her family is still haunted by a perception that doesn't seem to go away.

Life's been getting bigger, Jesus getting smaller, spill a cup of coffee, make a million dollars. I like Toby Keith, but he did The American Ride. Do we have to keep living this over and over and over again? Man, it's hot. How hot is it? So hot I poured McDonald's coffee in my lap to cool off.

What people believe are the facts of this case, and how deeply held those convictions are, has become useful to attorneys. The case that became an example of juries being out of control is now used to screen potential jurors. It's a wonderful litmus test. If you're putting someone on a jury, you really have to know how they feel about this case to know whether they're open to the facts that you're going to present.

McDonald's has been in the public mind cast as the victim. That Stella Liebeck needed to defend her reputation is the saddest piece of this whole story to me. Stella Liebeck died in 2004 when she was 91. The emotion that she went through, she just felt like people were coming at her.

McDonald's representatives didn't return emails or calls, but according to current franchisee handbooks, coffee must now be held and served 10 degrees lower. So I hope that overview is interesting for you. For some of you, maybe that's a reinforcement of information that you were already aware of. For some of you, maybe it's new information on a new something that you've ever done.

If you're anything like me, those were allegations that I had made. Talked about how ridiculous it is that they have hot coffee and somebody consuming McDonald's and all for millions of dollars. And yet here are some facts pointing out how ignorant I was and how wrong I was. And it really stunned me because I started to learn I need to go and check out the other side of some things.

Two interesting points for those of you who have consumed the audio only. First, the pictures that they showed are really, really, really compelling. It's just really, really sad to see these very, very serious burns on this elderly lady's legs. They're graphic and they are extremely compelling. The second thing was there was a clip in there from a Republican, I don't know, congressman or senator who was – he was the one who was talking about the need for tort reform.

This is an example of why we need tort reform. That person's voice was represented – it was John Kasich who is currently a Republican candidate for president. So if you think it's not relevant, here it is today that there was a representative using that as the case to illustrate why there needs to be tort reform and now he's running for president as a Republican candidate.

Now leave aside tort reform for another day. I don't have a clue. I'm not competent enough to discuss that. But for me, that story opened my eyes and it opened my eyes and said, "Hey, I got to pay a little bit more attention to what's going on." Now that story occurred in 1993 and the fast-moving events of story published in the local daily newspaper in Albuquerque picked up by AP and Reuters in the news and then spreads across the world.

What about today in a day of financial media? And just think over the last year, as I record this, it's January 26, 2016. Over the last year, think of all of the ridiculous hoaxes perpetuated that you've seen in your social media feeds. Whether if I post this, then Facebook Zuckerberg is going to – Mark Zuckerberg is going to give me money because he just is giving away charitable money or some of the hoaxes that occurred in the last two weeks with this billion-dollar lottery that was out there, the Powerball or some of the stupid privacy notice things that were going on.

If I post this as Facebook, Facebook, this is my information. It's just absurd. And yet this stuff spreads so fast, so fast, and we perpetuate it in our ignorance. And that's why the Dan Price example was so key. The reason I started with McDonald's hot coffee is everyone knows the story but very few people know the facts because even though sometimes in the past it was corrected, most people if you talk about the McDonald's hot coffee case, most people that you talk with are going to say, "Oh, yeah.

How ridiculous is that?" And they don't know what's actually going on, and that's what happens with these online memes with the way the information moves. Everyone says, "Yeah, that's crazy." Dan Price, perfect example. The furor that came out when he publishes that I'm going to make $70,000 per year, the minimum wage at my company, and here I am, this magnanimous, gracious CEO.

I've cut my personal compensation from $1.1 or $1.2 million to $70,000, and we're going to have this great idealistic company, and how wonderful this is. Well, this gets splashed everywhere. He's on the front cover of this magazine, of that magazine, Inc. magazine, invites him to speak, give him the equivalent, check the facts out a little bit, give him $120,000 of value in kind for him to come and speak at their magazine conference, and he's on the Today Show.

He's all over the place. It inspires and incites this national conversation about minimum wage laws and the importance of having a fair and living wage, and yet you look at it after the fact and as things are starting to emerge, I'm not willing to judge the actual facts, but here there's a lawsuit that he's been served two weeks prior to this announcement about his egregious personal compensation, and obviously the details of the lawsuit at this point are quiet, but the evidence seems compelling that he's lying.

Now what will be the case? I don't know, but you certainly do not see on the Today Show – I have not seen or heard of him being back on the Today Show facing the accounts because in our culture we don't care about what's actually going on. And so whether it's Dan Price with gravity payments and the $70,000 living wage argument or whether it's – let me give you these other examples just to show how they tied it in.

Martin Luther King. Martin Luther King is a national hero in the United States of America. I don't know what your opinion is of him or what you think about him, but he is generally lauded as a cultural icon, somebody who completely changed and led the civil rights movement in the United States to lead to black and white equality in the culture.

Now, most of us are pretty familiar with that story. Most of us are familiar with the famous sit-in by Rosa Parks sitting in on the bus, and most of us know the story. Well, what about some more of the facts behind the story? A couple of ones to pique your interest just a little bit.

I'll begin with just an interesting little background from four paragraphs of an essay. This essay is by economist Gary North. He says this. "In the summer of 1960, I read King's book, Stride Toward Freedom, published 1958. It was about the 1955 to '56 bus boycott in Montgomery. The book persuaded me that it had been a legitimate protest.

Here was a privately owned bus line that had a monopoly granted to it by the city. It forced blacks, Negroes in 1960, to sit in the back, yet they paid full fare. Worse, they paid, had to get off the bus, walk to the rear exit door, and get on.

This was deliberate humiliation. It was an outrage, but hardly any white person was outraged in 1955. What the book did not reveal was that profit-seeking streetcar lines in the South did not originally have this seating policy. This began around 1900. It was forced on them by the government. Typical was North Carolina.

In 1899, the North Carolina General Assembly passed legislation requiring railroads and steamboat companies to "provide separate but equal accommodations for the white and colored races at passenger waiting stations or waiting rooms, and also on all trains and steamboats carrying passengers," with exemption for servants or express trains. Streetcar companies followed the railroad precedent.

In 1907, the General Assembly passed similar legislation for street and interurban railways, but this time specifically mandated that white passengers sit toward the front of each car and colored passengers sit toward the rear. This legislation was expanded in 1939 to provide details of maintaining segregated seating in buses. It's also worth noting that the Montgomery bus line soon decided to abandon the segregation policy, but a local judge forced the company to return to the old policy.

That was when the blacks sued in federal court. You can feel free to read the rest of that essay if you want. It's posted behind a paywall, but I will link to it in the show notes. So a little bit of background on the laws. Most of us don't know much about those laws.

Even a little bit of background on Rosa Parks, it wasn't an accident. It wasn't an accident that somehow she just one day decided to screw up her courage and say, "No, I'm not going to get in the back of the bus." It was planned in months by the local NAACP organization.

It was there and it was a premeditated planned event. Evidently, the girl that was originally scheduled to do that found out that she was pregnant on the day that the protest was scheduled. So that would have been bad PR and so Rosa Parks was recruited for the opportunity and she volunteered to do it.

Those little details provide a little bit of interesting cultural context to what we read about in our history books. But specifically to Martin Luther King, the two aspects that are very rarely talked about was number one, the man was a serial adulterer over and over and over and over and over again.

He was a sex addict, very rarely reported on because that's considered to be personal shortcomings. But probably even the more egregious example was his plagiarism of many of his published and even spoken works. I'll link to an article in the show notes for today if you'd like to read.

But it's definitely an extremely troubling double standard, extremely troubling. Now I don't usually try to press these issues because there's such a cultural hot button and especially Martin Luther King because he is such a polarizing figure and again, widely renowned. We have a national holiday after him because of the work that he did.

So I don't – I'm not an abrasive person. I don't post these articles on the day of his – during the – around the celebration. I guess if I were a better marketer, I probably should. But I usually wait six months after. So it's not in the middle of it all and then I post the troubling strategies.

The point is how much of that stuff do we actually know? Now bring it in a little bit closer to finance. I like to use these non-financial examples because that's something we're more common with. What about finance? Well, with finance, I refer you to the Tai Lopez example of this guy on YouTube.

He posts a selfie of him and his Lamborghinis in his garage in the Beverly Hills. And here, look, I've got all this money. I've got all this stuff. So therefore, you should listen to me. But we don't have any actual objective proof of anything. We don't have any history of anything.

And yet here's the person that is today making huge splashes all across the internet with a massive online business to be able to build wealth. So my recommendation to you is that you not believe anyone based upon your impressions. We could go down the list. I'll skip the political topic and give you just a simple example of things like podcasts.

One of the things that I appreciate so much from many of you is those of you who write reviews of the shows on iTunes. That's really, really helpful because you know what? Some of my competition doesn't wait on individual reviews. There are a number of online podcasting groups in which if you participate, you can quickly amass hundreds and hundreds of five-star reviews for your shows.

Well, that helps with the rankings but it manipulates things. So when you're looking and trying to figure out something as simple as what I work in every day is what podcasts are doing well and you go based upon the number of views, you always have to ask, "Are these paid or are these actual listeners?" It's always a challenge.

You can't believe people based upon your impressions. So I want to give you some tools, just some simple ideas that I hope will be helpful to you when considering financial information. Before I do that, sponsor first half hour is Paladin Registry. Paladin Registry is my best attempt to solve this problem of reputation and due diligence for financial advisors so that I can recommend some advisors who've been vetted at least to a pretty good basic first step.

Now I'm not confident that Paladin Registry is perfect. I'm sure there are some scamsters somehow who slip through. I think they're really, really good though and they're at least better than everything else that you can find. So if you are in search of a financial advisor, consider starting your search with Paladin Registry.

The way it works is advisors apply to be a part of the program. Paladin checks them out. They check their complaints with FINRA. They check out their credentials. They check out their business practices. They take into account their length of service and they carefully vet them. And only once they pass the vetting process do they actually let them in to the registry.

And it is the absolute best system that I have seen anybody come up with for vetting financial advisors. Personally, I believe everyone needs a good financial advisor. If you don't have one, start your interview process at Paladin. Go to RadicalPersonalFinance.com/Paladin. Put in your information, you'll enter your name, your address or your zip code and your net wealth.

That will help them to make sure that they properly associate you with an advisor. It is important that you fill in the information accurately so that they can match you up with an advisor who will help you. And by the way, thank you to those of you who give me feedback on your experience in meeting with the Paladin advisors.

Overall, it's been good. I had a couple of people say, "Well, the advisor just didn't impress me all that much and then they didn't follow up with me." No problem at all. I appreciate having that feedback and that's good to know. The use of this referral link is not a commitment to work with this person.

It's just simply a good place for you to start your interview process. So RadicalPersonalFinance.com/Paladin. Now the challenge that we face with finance and that you face and that I face is that majority of our population around us just seems to be totally brainwashed and incapable of critical thought. Now is that by design or happenstance?

I don't know. I don't know. I lean towards the direction of its design based upon the research that I found but I'm not quite 100% there. And whether it is or not, it really doesn't matter because we can at least see that that is the case. And so then whether it was, again, happened or whether it was designed in this case, it doesn't really matter that much to what we should do.

So when you're looking at financial advice and gurus and things like that, here are a couple of tips. Number one, is the financial guru leading with lifestyle and luxury and flashiness first or are they leading with something else, something with more substance? If you find that a guru or a teacher of some kind is trying to lead with their symbols of success, flashy cars, fancy watches, lots of jewelry, big houses, things like that, my experience has shown that you can pretty much write off the value of what they have to sell.

Now, it's not to say that you can't gain some good ideas from them but you should proceed with caution. This is probably the most reliable indicator that I can come up with because in my experience, I've not – I've had the unique good fortune of being able to connect with a number of people that I know were actually wealthy and I've also had the unique good fortune of being able to connect with some people who wanted you to believe they were wealthy but weren't actually wealthy and I've been able to see under the hood or beneath the clothes to mix our metaphors.

People that are truly wealthy very rarely flaunt their wealth. Now you've got to pay – you've got to figure out the difference between somebody who is a mega wealthy, mega wealth, who has $300 million and for that person, for them to drive $300,000 cars is comparatively similar to you driving a $3,000 car.

So that type of person isn't trying to flaunt their wealth but when you have a business owner or somebody who's trying to sell you something online talking about their $300,000 car, there's a good chance and a good possibility that it's really not indicative of their overall wealth. The wealthy people of the world generally want to hide it.

Why would you ever want anyone to know that you are wealthy? Think about it. If you're wealthy, you've got to deal with all kinds of people coming to you and asking you for money. You've got to deal with being one of the 1% that everyone in society is mad at.

You've got to deal with the risk of people trying to come and get your wealth and if you're actually wealthy, you know that the way that you get wealthy and stay wealthy is frugality and thrift and wise investing. So if you're actually wealthy, what on earth would compel you to advertise your wealth?

Well, the only thing that would compel you to advertise your wealth was if you could somehow earn off of that advertisement. If you could display that wealth and therefore convey that you have that wealth and then you can earn something. People following you as a guru of wealth, attracting an attractive mate to you, showing off that you've got some advantage, showing your clients that you're really, really competent, showing that advertising who you are.

But other than that, if you don't have something to gain for it, why would you want anyone to know that you're wealthy? I'm not saying you wouldn't want to enjoy the fruits of your wealth. It's nice to ride in a luxury car. It's nice to own a helicopter if you enjoy that kind of thing.

But usually there's a difference between being able to enjoy that and advertising that. The people who are really wealthy never display their wealth. It's all hidden behind a very large wall around their house. If you want a good example, come down to where I live here in West Palm Beach.

You can go to Palm Beach Island or drive up to Jupiter Island. You drive around Jupiter Island, one of the most highest concentrations of wealth in the country. Drive around Jupiter Island. The roads are public. You will hardly see a single house because they're all hidden back from the road.

That's why these islands – I mean you got Jupiter Island and what? Jupiter Island, Jekyll Island and Mount Desert Island. This is where the wealthy go to get away and put up walls around themselves. The fact that it's an island is really, really useful because people don't accidentally go onto the island.

But you never see the houses. I had a unique experience one time when I was – I just graduated from college. I was invited by a friend to go for dinner at the house of an estate on Palm Beach. Prior to getting there, I did not know what the circumstances were.

Now if I had known, I probably – I don't know what I would have done. But anyway, I didn't know. I just thought that would be fun. We're going to go have dinner with some guy. He's dead now. So I can – I'm not betraying any privacy of anything that matters.

But the man's name was John Kluge. He was formerly the richest man in the world back in the '90s. So when we got there, they gave me the address and Palm Beach is an interesting place. Many of the streets look the same. They have walls covered with some sort of vegetation.

The gardeners are the ones who make a ton of money in Palm Beach, keeping everything looking beautiful. We just pulled through this little gate, through this little hole in the wall and all of a sudden I realized that we're on this massive multi-multi-acre estate. From the outside, you would have never had any idea.

But the house was huge and the grounds were massive. To give you an idea of how big they were, I had known a story from another connection of a man who had owned a house in the back of this guy and we actually worked it out over dinner that night, the connection from this other story.

The guy told the story about how some rich guy had bought his house just simply to knock it down and put in a garden. His house was on Palm Beach worth many millions of dollars. I don't know whether to say tens or – I would say – yeah, tens probably.

Many millions of dollars and the guy had bought this house simply to knock the house down so he could have a bigger garden out behind his house. Well, the man was John Kluge and this estate was huge. But to this day, if I didn't have the address, I could not find it.

I wouldn't have any idea where to go. But when I'm walking around this multi-acre estate in the middle of Palm Beach, all of a sudden it's different and you can see how big it is. People who are truly wealthy generally hide that wealth just a little bit and they only display it in areas where it's safe, in areas where they're with their peers.

Now I again have had the unique experience of living here in this part of the world and I'll give you – I'm friends with a man who was formerly the CEO of one of the world's largest investment banks up in New York City. You know what car he drives?

A Prius because he doesn't care. Now I can't remember if his wife has a Mercedes but he drives a Prius. It's easier and better to be underestimated. Usually I happen to have some – I wind up going to the Everglades Club which is a private club in Palm Beach.

Once or twice a year I get an invitation from somebody who's a member there. I always enjoy going because my friends that I've had the pleasure of building relationships with, it's just kind of fun to peer into the Palm Beach society. You would be surprised at how restrained generally the expressions of wealth are even though sometimes you're sitting at a table and you know for a fact that everyone around that table is worth hundreds of millions of dollars.

Even among the glittering rich, you find that the expressions of wealth are often a little bit subdued. Now when you get into the mass affluent, you know that they're always subdued. Read – again, read Tom Stanley's work, The Millionaire Next Door. He'll prove it to you again and again and again and again and again.

You start to see, wait a second, why is this person advertising their wealth? Unless there's a benefit in it for them, there's no reason for a wealthy person to talk about it. That should be a big red flag. I think on tomorrow's show, I'm going to do a review of John Schaub's seminar.

You know what I most appreciate about John Schaub? He invited his seminar participants over to his house, had a chance to spend some time there, and his house, his cars, everything was understated. That means a whole lot more to me now than the guy who previously when I was sucked into the world of gurus was talking about this and this flashy Porsche and that flashy giant $300,000 bus, etc.

So when you see somebody advertising their wealth, you should be very, very suspicious. Doesn't mean they don't have it. Doesn't mean there's not a reason for it. Just be very suspicious and it should immediately put you on guard. Next, when you see somebody using broad and imprecise language, that should make you suspicious.

This is my biggest problem, again, reading Bank on Yourself for a comprehensive project I'm working through on this infinite banking concept. I can hardly get through the first chapter because the language in the book is so broad stroke. It gets deeply into an us versus them. Wall Street is ripping you off.

Who is Wall Street? Wall Street is a place. Yes, I know it's a metaphor for a community, but who specifically? Because there's a big difference between all the different people that are involved in Wall Street. If somebody gets into an us versus them mentality, usually it's because they're trying to create a cult of personality.

I'm reminded of Robert Greene's work in the book 48 Laws of Power, which is a really twisted book. But basically if you want to create and develop for yourself power, here's how to do it. It's an interesting book. But two of his laws are especially poignant to our conversation today.

Law 27, the summary is, "You need to play on people's need to believe to create a cult-like following. People have an overwhelming desire to believe in something. Become the focal point of such desire by offering them a cause, a new faith to follow. Keep your words vague but full of promise.

Emphasize enthusiasm over rationality and clear thinking. Give your new disciples rituals to perform. Ask them to make sacrifices on your behalf. In the absence of organized religion and grand causes, your new belief system will bring you untold power." You see that happening constantly, people's desire to pit certain segments against other segments, whether it's in politics, the Republicans versus the Democrats, or the Main Street versus Wall Street, or the 1% versus the 99%.

Whatever the example is, it's all about building that cult of personality. Law 32 is useful too with the point that I just made. Play to people's fantasies. "The truth is often avoided because it is ugly and unpleasant." So Joshua's instructions here, "The truth about wealth building is it takes time.

It takes discipline. It's hard work." So the truth is often avoided because it is ugly and unpleasant. Never appeal to truth and reality unless you are prepared for the anger that comes for disenchantment. Life is so harsh and distressing that people who can manufacture romance or conjure up fantasy are like oases in the desert.

Everyone flocks to them. There's great power in tapping into the fantasies of the masses. So when you see people pitting one versus another, and you see people building those fantasies, playing on those strings, be careful. Be careful. A couple more and then some tips, but before I get to the last two points to watch out for and the tips for you, sponsor second half hour of the show is SoFi.

SoFi, short for social finance, SoFi is working to revolutionize the world of lending. They started with student loans. They've expanded to personal loans and mortgage loans. They're expanding to new opportunities all the time. The coolest thing about SoFi is they are actually a modern company with a modern integrated electronic system for you to apply for financing, whether that's to apply for student loans or personal loans.

If you have debt or if you have a need for money for something, check out their financing system and see if you can figure out a way to save money on your debt by refinancing with SoFi. If you have student loans, check out their student loan refinancing system. You can apply in minutes, find out some information on whether or not you are a good fit for them.

If you have personal loans, they have those offers as well. If you use my special referral link, go to RadicalPersonalFinance.com/SoFi, S-O-F-I, RadicalPersonalFinance.com/SoFi. You will get a $200 bonus to your student loans when you refinance. And if you refinance a personal loan, you'll get a $100 bonus as well. So that hopefully will incentivize you to use my link.

That helps them to track my performance and I thank you for doing that. RadicalPersonalFinance.com/SoFi. Last two. Last two points here on just watching out for financial fraud. Look for vague allegations without technical precision. This to me is a major warning bell. When you see people make these broad, broad strokes, I talked a moment ago about they, they are doing this, Wall Street is doing this, it's a problem.

And when you see these vague allegations without any specific clear allegations, you know you've got a problem, especially if there's no footnotes. This is just playing on the emotional needs that people have without footnoting things. So look for that. And if you see those vague and broad allegations, you've got a major problem.

Finally, the one that just drives me nuts is look for deceptive charts. As I've been reading this Bank on Yourself book, it is so frustrating. I finally found about the eighth chart in the book, I finally found a chart that was well-created. If you see a chart with an unlabeled axis, that should be a major red flag.

If you see a chart that doesn't go from zero to whatever the value is that's being displayed, that should be a major red flag for you. If you see a chart that's showing a selected period of data, that should be a major red flag for you. It's not that those types of charts shouldn't be used from time to time.

You can't always display a chart of the entire stock market history when you're trying to look at the stock returns for the last year. That's not useful to you. You do sometimes need to home in on what is the appropriate period. But when you see a chart that's being pooled to support a point and it's got a specific date range, the most egregious example in this Bank on Yourself book was the chart that was chosen for stock returns, real estate returns, and gold returns.

Every one of them had a different date range and every one of them was the worst possible expression, the worst timing whatsoever instead of being a standardized version to show, "Hey, here's how these things compare." You know you've got a deceptive practice if you've got deceptive charts or at least you should be suspicious and you should go and recreate the chart yourself and dig into it.

So just some simple tips for you. Again, this is not a comprehensive list, but just some simple tips. I wanted to use these examples so you can start to be aware of them. Number one, the internet is your friend. When you're doing searches, if you get interested in something, read one side of the story and then try to find the other side of the story.

If you're researching a business opportunity, type in the name of that business opportunity and then read the reviews and then type in the name of that business opportunity and add scam to the back end and read what comes up. If you don't find any negative information about a company, that should also be a big red flag.

It's very hard to have anything that's going to work for everybody. Most companies are going to annoy some people. Most companies are going to drop the ball and do something poorly with customer service, even take something as simple as a show like mine. If you were to go and look at a show and you're going to find just everything is five-star reviews, there's no three stars, there's no four stars, and there's no one stars, well, that should be a good indication to you that those reviews are probably not accurate.

Now hopefully and thankfully to those of you who love my show and have listened to it, for radical personal finance, the majority of the reviews are five-star, but still there are a bunch of one-star and three-stars because I rub people the wrong way. I'm good at angering some people and I screw stuff up.

I'm not great at everything and that's normal. That's normal experience. There are some people that really love you and there are a lot of people who tolerate you and there are some people who can't stand you. So look for a business and read both sides because a good business should be able to stand up to the problems.

Every business is going to have problems. Every business opportunity is going to have problems. Every investment is going to have problems. You need to read both sides of every story. You should be able to make the positive case for something and the negative case for something. One of my goals with my kids is I really hope that my kids are trained in the formal art of debate.

I'm not exactly sure how to do that, but I would like to do that with them. I regret – one of my regrets is I didn't spend time in school with formal debate. I've learned some of the habits and studied a little bit after the fact, but I never got the chance to participate in debate competitions.

But in a debate, you should always be able to make the strongest cases for both sides. You never win a debate unless you can argue against the strongest case that your opponent has. So when you're considering an investment option, you should know what the major advantages and the major disadvantages are.

If you read a book that's just painting the rosy picture and never points out the problems of that strategy, you probably have a sales brochure and you don't have an accurate book. Look for both sides of the story. Check for social proof. Look for subscriber counts. Look for reviews.

Look for the social media follower counts. Look at the website rankings. The first thing you should do generally when you are looking at a website is check its ranking on Alexa or compete.com and find out does this website – is it relevant at all? Use some of the third-party tools that will help you to know is the person here – how big of a difference are they making?

Now, remember, many things can be faked. I'm sure that Alexa rankings can probably be manipulated. I don't know how to manipulate those but social media followers, those can be manipulated. I can go out and buy thousands of Twitter followers, thousands of Instagram followers, thousands of Facebook followers. You can buy all that stuff.

You can buy subscriptions to podcasts. You can buy reviews. You can go out and buy that stuff. But still, directionally, they're a good indication. Look for academic quality and academic level work. Look for the academic citations. Look for at least some level of careful language when dealing with financial topics.

Now, academic stuff can be faked too but it's – there's a difference between that versus just some of the over-the-top sales stuff that you read online. Look for things. And then finally, buy and read books, not expensive products. Products have their place. You're going to be going out with a bunch of products in the future and products should be usually priced more highly.

But if you're not building and buying products after building a foundation with books, you're doing it wrong. Start with the stuff that is cheap. Books have the highest density of information and the lowest cost. Start with books. Read books. Then move on. Buy info products. Then move on. Buy seminars, coaching, things like that after the fact.

And you'll start to build on your knowledge. Do it little by little. So I hope that some of these tips are useful to you. I don't know if it's possible to create a comprehensive scam-busting curriculum. I don't know. These are just some tools that have been useful for me.

I led with the major ones. But I just ask you to build and develop your skills of critical thinking. I'm working hard to develop mine all the time, learning to be more careful with my logic, learning to smell out the logical fallacies that I commit, learning to be a better researcher.

But guys, we're doomed if more people don't wake up and just pay attention. I mean, come on. We're going to wind up with Donald Trump as our president of the United States. What on earth is there to say? We're doomed. Anyway, if we're not doomed, I'll stick around and I'll do my best to help us work the way through the dooming.

And we'll be back tomorrow with some optimistic, upbeat personal finance advice. Oh, politics, politics, politics. Thank you so much for listening to today's show. This content has been valuable to me, to you. I'd appreciate your supporting the show on Patreon. Become a patron of the show. Direct supporter, radicalpersonalfinance.com/patron is where you find out all the information on that.

Radicalpersonalfinance.com/patron. Thank you to those of you who support the show there. It's really, really important. You know, I brought advertisers on the show here because there wasn't enough patron dollars for me to continue doing the show the way I wanted to do it. But still, the patronage gives me a stable foundation of some income, which allows me to be a little bit picky and choosy with the advertisers.

And that's really important. Because if I get in a place where I'm doing all kinds of work and I have, if I have financial pressure to make things work, then I just start accepting anywhere, anyone, it starts to hurt the integrity of my opinions. So the patron program is really, really important.

So if you'd like to become a patron and support the show directly, please go to radicalpersonalfinance.com/patron. And I'll be back with you soon. (upbeat music)