10 More Financial Disasters to Avoid

As WC Fields used to say, "There's a sucker born every minute". At no time in history have there been more ways devised to separate people from their hard earned money. Here are ten more financial disasters to avoid:

1. Time shares. People get into these because of the hard sell tactics used by the salespeople. If the customer would step back, take a breath, and break out their calculator, they would find that this is an extremely expensive way to take a vacation.
2. Multi Level Marketing Schemes. Every year or so another "great investment" makes it way through family and friends. I cringe every time someone I know buys into a MLM scheme then thinks it will be easy to sign me up as an associate. It's not. These are something I never participate in. There are a couple of OK MLMs (like Avon, Amway, etc which have an actual product to sell) but most focus solely on signing up more and more people; eventually you run out of people and/or sales skills.
3. Pyramid Schemes. The math seems good. Ten friends get together and decide to put in $100 each month to be given to one person in the group. You figure when it is your turn, you will have $1000 so it would kind of be like a savings account. Then life intercedes and some of the group can't afford to put in their $100 for a month or three and the pyramid implodes (along with your monthly "investment" of $100).
4. Email Schemes. No, you aren't the most helpful, luckiest, most blessed person on earth when you receive a plaintive email from a prince in Africa. These scammers--and there are many from all over the world and even in your own back yard--send you a check and ask you to cash it. They will generously offer to let you keep half of the check if you wire them the other half of the cash back. These are fraudulent checks and the sucker who cashes them and sends the money off ends up holding the bag (and the bill for the entire amount of funds).
5. EBay/Craigslist/Other Internet Scams. I used to like eBay but the last few times I listed things on there I would receive emails from people who wanted to make me a "better deal" such as double the price I was asking if I would just accept a check through the mail and send them the product immediately. This is a rip off and so are other "too good to be true" internet offerings such as the person who put an ad on Craigslist and said come to my house, I'll be out of town, take anything you want. Turns out the house belonged to an enemy of the person who listed the ad and the people who went over and helped themselves to the items were actually stealing.
6. Paying for Something You Can Get for Free. That jingle-ey commercial that comes on about "free credit reports dot com" is misleading. If you read the fine print it tells you that you will get a free credit report only if you sign up for their credit protection program, for a fee. You will get an honest to goodness free credit report at www.annualcreditreport.com. Don't pay for something you can get for free.
7. Leases. If you are leasing something other than a house or apartment, such as a car, it probably means you can't afford it. The reason people lease vehicles, although ostensibly for "tax purposes' is because the price to lease is considerably less than the price to buy. If you can't afford to buy something outright you can't afford it.
8. Investing. Not all investments are scams. If you do your homework and put together a diversified portfolio, you will be on the right track. The problem comes when people invest in a "hot tip" that they know nothing about, when they put all of their money in one company (Enron for example), or when they try to time the market. Dumb investments lead to loss of money, it's that simple.
9. Anything Illegal. People with basic math skills may be able to figure out that buying a pound of marijuana then selling it off in ounces for much more than what they paid can be lucrative, but when you figure in the additional costs (fines, lawyer fees, court costs, incarceration time, etc) the math goes out the window. The bottom line is that making money from anything that is illegal will end up costing way more than anticipated and quite frankly, isn't worth it.
10. Compromising Positions. Don't put yourself in a position to be used financially, blackmailed, et al. The Senator with a wife and girlfriend on the side has made a big financial mistake--it could cost him his salary (when he loses the next election over the hooplah), his cash (when he is blackmailed by someone in the know), and half of his assets (when his wife divorces him).

The best way to avoid these and other financial disasters is to use your common sense, do your research, do the math, never fall prey to hard sell tactics, and check, double check, and triple check anything that seems too good to be true.