Smart Decisions about Money: November 2012

Thursday, November 29, 2012

Forget the Cliff, 3.8% Obamacare Tax Is Coming: What Advisors Are Telling Clients

Forget the Cliff, 3.8% Obamacare Tax Is Coming: What Advisors Are Telling Clients

Another goody in the Obama basket of coal for any investors who earn dividend income or have portfolios with earnings. Bah-Humbug to all those people who have any level of success.

Monday, November 26, 2012

Victimization is all in the Behavior

Are you familiar with the concept of “the Mark”? A mark is slang for the identified victim of a scam or fraud. Most investors don’t think they can ever become a mark. Yet, the vast majority of high net worth individuals are easily identified and often targeted. The reality is stunning because this particular pool of victims is rarely recognized. The reason for this is these victims rarely report their losses. While there are many reasons for this behavior it is mostly related to the common emotions of shame and guilt.

All victims suffer shame and guilt, yet the higher the profile the greater the threat that shame and guilt is socially motivated. The social networks of High Net worth families are closed societies and life style is one of the highest priorities. They are targeted more not simply because they have the wealth, but even more importantly they will usually not publicize their losses and therefore become almost a victimless crime opportunity. Conmen love High Net worth marks.

This doesn’t mean that scams, fraud and predatory sales tactics are isolated to High Net Worth victims solely; unfortunately everyone is subject to being victimized.

One of the constant staples of victimization is your financial decision making process. This process is fully ingrained and it is behavior driven. The behaviors that determine your financial decision making process have been seared into your sub-conscious and can easily be identified and manipulated by scammers and fraudsters. In fact the reason that so many people are victimized is that they are simply unaware of the psychological triggers that make up their financial decision making process. This makes investors and consumers easy targets for predators.

Our greatest advancements such as social media and communication on demand have made scamming and defrauding investors easier than ever. In the past cons needed to work hard to identify ideal marks, today in less than an hour they could come up with dozens of potential marks. They can also easily identify all the necessary psychological triggers needed to successfully manipulate their identified marks.

If you aren’t fully aware of your financial decision making process and how the psychological triggers can be manipulated you will have a total blind spot and never see the scam coming. Everyone believes the old adage “it can’t happen to me” and unfortunately they would be very wrong. At the Advocacy Network we provide our members with the information and tools necessary to completely inoculate and insulate investors and consumers against scams, fraud and predatory sales tactics. Wouldn’t you enjoy the peace of mind of knowing that were 100% protected from scams, fraud and predatory sales tactics? It is about prevention not reaction.

www.karlschilling.net 321-574-6562 O 321-947-3220 C

Friday, November 23, 2012

Psychological Triggers in Action

Today I am going to display the psychological triggers in action from a legal brief recently filed by the SEC against a classic scam artist. The complaint brief displays the depths of desperation victims’ face and the rationalizations those victims will resort to in order to recoup their losses.

Once the psychological triggers are pulled the results are consistently evident. The only solution is to be fully inoculated and insulated from scams, fraud and predatory sales tactics. Without this basic education and understanding of your financial decision making behaviors you will consistently and persistently be open prey for scams, fraud and predatory sales tactics. Victims ALWAYS believe it can’t happen to them, because they are too smart and sophisticated to be lured into an obvious scam or fraud, and yet the lists of victims grows exponentially larger on a daily basis.

Most scams are not exposed for at least 13 months and many last for decades before full exposure and legal action is taken.

Let’s look at a recent SEC criminal and civil complaint against a scammer (no names will be used but a link to the SEC filing will be provided for your review)

“From April 2009 to Feb 2011 (Defendant) obtained more than $12M from 3 individuals as private advisory clients. (Defendant) made misrepresentations to these investors regarding the historical and current rates of return that (Defendant) earned for advisory clients. (Defendant) also misappropriated approx. $185,000 from these investors.”

(Red Flag number one for the victims was they did no due diligence and could have easily found that the defendant held no securities registration or license to act in an advisory role)

These victims recruited several other victims and also invested in 4 separate entities created by the defendant. This behavior displays the desperation phase once a victim has learned they were duped. Each of these investors had simple due diligence tools at their command but they were SOLD on the opportunity to make great returns with limited risks and they dove in full force. The desire to gain huge returns with no risk is the consistent bell weather of all scams and frauds and investors continually are attracted to fairy tales. Once their psychological triggers have been manipulated there is no turning back because the next level of psychological pain is guilt and shame for being victimized. At this point victims would rather become part of the scam then to take accountability for their mistake.

The link for this legal action is http://www.sec.gov/litigation/complaints/2012/comp-pr2012-235.pdf read it through and look for the countless mistakes made by the investors (victims)

This process is consistent and can be stopped before it even gets started, but it requires knowledge of how the process is used and how as an individual you are susceptible. Without this education and self-knowledge you remain exposed and will be an on-going target for scams, fraud and predatory sales tactics. The Advocacy Network can permanently inoculate and insulate investors and consumers against scams, fraud and predatory sales tactics. You can choose whether or not you become a victim, it requires a proactive preventive financial decision making process though. Once you have done this work you will be fully inoculated and insulated from scams, fraud and predatory sales tactics and the Advocacy Network can be your third party totally non-biased advocate who provides this preventive shield around your wealth.

www.karlschilling.net

Friday, November 16, 2012

Beware the first name basis!

One of the exceptionally useful psychological triggers is the simple use of a person’s first name. Our first name is an incredibly powerful emotion initiator. We all enjoy being recognized and our name is a powerful acknowledgement of our identity.

The ego is massaged when you are called by your first name. The last name isn’t nearly as effect as it doesn’t trigger the same emotional impact. Remember back in HS when the teacher might have called you by your last name, it wasn’t quite symbolic of your identity within the group, but getting that call on the first name created a warm stream of good feelings didn’t it?

Sales people have long been trained to use a prospects name in order to develop a camaraderie or sense of association. Once you have passed the threshold of trust it is quite easy for someone to use persuasive triggers to get you to make a decision. Financial decision making is one of the most important processes an individual faces. Mistakes with money are common and many times these decisions are gravely impacted by a process of manipulation.

This key manipulation trick has been used for centuries by those wishing to separate you from your money. Now, let’s be clear the psychological triggers are not always used for manipulative purposes yet it is vital that you understand what the psychological triggers are so you can determine if they are being used to manipulate your decision making process. It is always what you don’t know that is of the greatest potential harm to you.

The other difficulty is that much like hypnotism your behaviors become an unconscious event and are grooved in which make it quite difficult to defend against these behaviors. You have developed a financial decision making process whether you are conscious of it or not. All that needs to be done to manipulate this decision making process is for the other person to identify your process. A few key questions at the right time can easily identify anyone’s process.

The first barrier to cross is rapport. This barrier is the initial protective shield everyone puts up. It is the easiest of the shields to pierce and it also triggers the unconscious defense mechanisms to stand down. The most common trigger to use is the person’s first name. Upon crossing this barrier there is immediate rapport and a sense of ease within a conversation. If it is being used for manipulation you will find your name attached to certain concepts the manipulator is seeking to associate with your strong emotional state triggered through the use of your name. The manipulator will bracket you name around the decision making question when the time comes to close the deal. The only one capable of short circuiting this process is you. The only protection you can create is a total knowledge of your financial decision making process and a conscious awareness of what the psychological triggers are and how and when they are used.

The Advocacy Network inoculates and insulates our members against scams, fraud and predatory sales tactics. At the base of our work is the new book “You Might Be Getting Scammed When….” You can be totally inoculated and insulated against scams, fraud and predatory sales tactics and consistently make smart decisions about money.

www.karlschilling.net