Scams for High Net Worth Individuals

A Naïve investor and his money are easily parted. Here’s a story of how I was targeted for a drop shipping scam based on having $10,000 as the sole requirement of being in the high net worth club. Only savvy investor types who want to get rich need read more.

Time and time again you’ll hear about people who were duped out of their money – the scammers are parasites and for as long as the reward is there, the risks will be worth it. It could be some poor granny who is bombarded by charity requests which end up costing her thousands of pounds a year (because she is too nice to say no) or another cash rich but metaphorically poor granny who thanks to a BT engineer, transfers her life savings to a “safe bank account” after a helpful phone call to fix her computer or to all the money invested with a safe pairing hands like Neil Woodford or Bernie Madoff or high returns promised by F&C – the list is endless. These are scams made by deception and the scammers take advantage of the kindness or ignorance of their victims – it’s easy to feel sympathy for them and greater protections need to be in place to put the scammers out of business and into jail.

Greed & Speculation

Another type of scam and one where it is harder to have as much sympathy is a scam that relies on our own selfishness and greed. You know that emotion that turns your eyes green and makes you want what others have and feel indignant that you don’t have more? Greed as one person once said “Greed is so destructive. It destroys everything. Greed is the lack of confidence of one’s own ability to create. Successful people are always looking for opportunities to help others.” It is greed which has fuelled the rise in Tesla or Bitcoin where the fundamental underlying value is not understood by the investors and all that matters is the belief that it’ll go up in value. It’s speculation and it doesn’t end well for most investors. Or take BTL, Buy to Let has been allowed to ruin the shelter industry in the UK. It’s not build to let – it’s buy to let and from economics 101, increase the demand without increasing the supply and throw in easy credit will lead to an increase in prices. Meanwhile the quality or value of the product (housing) hasn’t improved.

How sad that middle class, middle aged investors, entrepreneurs and risk takers don’t actually invest in a business – we’ve gone from a nation of shopkeepers to a nation of landlords.

Greed for the Millennial Generation

I was shown an advert on YouTube this week with an extremely charismatic guy with great looks and an easy personality who was on a cool skateboard in an amazing house – just the sort of person I’d want to be. He told me that whilst boring stocks and shares were only making 7% a year in growth there was a new way to make 10 times that with his new system on Amazon. Basically, you buy some toy or gadget (like the skateboard) for cheap and sell it through the Amazon platform for a profit. Turn over your stock 4 times a year and you’ll get rich. At some point you need to give him all of your money.

It was all very simple, so simple that even an idiot like me could do it. Except, maybe not so simple that I wouldn’t need a little help from this guy (although he was a bit picky about who could help as he only wanted “serious marks investors” and most disturbingly of all “high net worth individuals who have at least $10,000 in the bank account”.

“Holy moly! That’s me!” I thought; as I have just that exact amount in my current account right now, and why would I invest that money in boring ETFs when I could get very rich very quickly. Unfortunately I hit skip and haven’t been able to find the advert since – which is a shame because drop shipping (which is a real thing and can work) is a very profitable business to get into (in 2015).

If it seems too good to be true you just don’t understand the inverted trapezoid

the inverted trapezoid of life

The unseen part of any scam is finding the mark. The mark is the person that you intend to scam and with the proliferation of personal data on the internet, it’s more and more easy for you to have ads and scams tailored to you. So, I get torpedoed by adverts for multi-level marketing scams, BTL scams and investment scams because that’s what I’ve written about in my blog and did a bit of research as well but it doesn’t mean I’m either stupid or interested. I also recently got the most bizarre advert asking me to donate to a Texas based Muslim Mosque/school/Quran academy – here my “seed” money would be repaid many times over by Allah. This for an atheist, lapsed Catholic and UK resident; give to Caesar what is Caesar’s and Allah takes Visa, Mastercard and Bitcoin. So this targeting is sometimes off – but it’s getting better and better (which is worse for you). Last Week Tonight has a good section on this type of scam.

Snakes and Ladders

Lack of confidence in one’s ability to create means that we look out for ladders in life. You are very unlikely to win a game of snakes and ladders without getting a leg up and by the time we are all middle aged, we’ve had a few rolls of the dice. So to get ahead the temptation is to stop using the sweat from your brow (or keyboard) and get lucky and with your savvy smarts you’ll get rich too! All you need to do is pay for the online course and seminar from the friendly guy who says that he did it and so can you. But you’ll end up worse off because if someone does have a good investment opportunity, you sure as hell won’t want to share it. Unless the business opportunity is selling the snake oil or the masterclass or taking $10,000 off someone to teach them to sell knock-offs on Amazon for a short lived profit.

Slow and Steady Wins the Race

Based on the success of survivors like Tesla and Bitcoin, you could have made millions if you did something differently 10 years ago. But you don’t see those that lost everything doing the same thing with the wrong company.

Be careful investing in anything which appears to be too good to be true or anything which quite simply involves you giving your money to somebody else and don’t take any investment advice from adverts on YouTube.

Thanks, GFF


  1. Scam: HMG sells index-linked gilts and then changes the definition of RPI.

    It’s true the financial pages warned everybody that this was bound to happen away back when Gordon Brown introduced CPI but not all grannies will have noticed. Was it “in the price” when they bought? Maybes.


    1. Inflation be it rpi or cpi totally ignored the rampant house price inflation making it a pretty meaningless figure anyway.

      I am stung by the change from 2030 onwards it all adds up you know and it is totally unnecessary since it must be pretty easy to make the calculation of rpi – unless the true purpose is to reduce costs to the government?


      1. I’m in the same boat with my deferred DB scheme. The difference between RPI and CPI(H) may seem small but over a 30 year retirement it can potentially cause significant loss.

        I’m still waiting for my annual CETV request to be processed. An initial 4 to 6 week estimate has now exceeded 12 weeks. Whether I’ll transfer out is another, the combination of last year’s CETV and my existing DC contributions puts me close to LTA already.

        Mentions of wealth taxes on the horizon are also a concern


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