Dave Ramsey is doling out dangerous advice on retirement planning? That is the charge made by Motley Fool blogger Brian Stoffel. The argument has spilled over to Twitter, where Dave has been engaging in a debate that has caught the attention of the financial media. Investment News even calls it a 'Twitter War.' Dave invited Stoffel to appear on his radio show on Tuesday to defend his article. It may be the only time you ever hear Dave this angry, so it was quite a unique moment to listen in to. You can hear the segment by going to Dave's show archives page and selecting June 4 (hour 1).
So what is this all about? Dave says in his books and workshops that people can average 12% per year if they invest using stock mutual funds. Stoffel claims Dave's numbers are on the high side and suggests that around 9% would be a better number to use. OK, I know you are starting to roll your eyeballs wondering what the big deal is here. Well, Stoffel's point is that being off by a mere two or three percent would leave individuals with an enormous shortfall once they reach retirement. Dave acquitted himself very well, giving Stoffel some excellent examples, including quoting returns from Standard & Poor's own website directly.
Here is what these financial bloggers don't get. When you host a radio show and write books you are not doing financial planning. Dave is not a financial planner. You can't call up his office and get an appointment with him personally to go through your investments, tell you exactly what to do with your money, and print out for you a personalized twenty pound 'plan' to take home. Dave is doing what financial radio hosts and authors have done for decades; giving out pithy general advice and using 'rules of thumb.'
I have been on both sides of this. I owned a registered investment adviser and a broker dealer, and I have also hosted a radio and a television show. When I was doing TV and radio I had to give one to two minutes answers to callers (or my producer would go ballistic). When I was sitting in my office with a bonafide client that was a whole different deal, and two hour discussions were commonplace. Here is what Stoffel missed (and those piling on via Twitter) - Dave does not have a 'set it and forget' approach to any of this. If you are going to judge Dave on the entire body of his work, you would understand that anyone following his advice would be conducting an assessment of their long term goals periodically. So, if someone had lower returns than they projected, they would understand that they might need to throw in a few extra bucks to get back on track.
This frankly reminds me of the kind of 'disagreements' I have on occasion with my teenagers, who are all too ready to correct 'dad.' I may be sharing with a new neighbor that the grocery store is just '5 minutes' from our neighborhood and they will interrupt to say it is more like a 7 minute drive. Well, they are probably technically right, but I don't think their interruption added much to the conversation. I think the same thing can be said about the accusation that Dave's advice is somehow dangerous. Not only is it not dangerous, quibbling over such small differences in assumed growth rates seems pointless.
Well, one good thing may come out of all of this this - people may be thinking a little more about saving for retirement. That is a positive, no matter which side of this debate you fall on.
In this episode - Is there an Alex Jones conspiracy to crash the Bitcoin? You might be surprised to learn who one of the largest holders of Bitcoin is? An update on the suspension of trading of the Bitcoin this week, and is a Bitcoin exchange traded fund coming soon? Hosted by James L. Paris and Robert G. Yetman, Jr.
There
are many financial "traditions" that we all simply accept
as true. One of the things I have done as a financial writer is to
question many of these traditions to see how valid they really are
today. This article will attempt to address the dozens of emails
that I receive every month on the question of whether or not it is
better to rent or buy a home. Right now, with the millions of empty homes on the market, rent is cheap. I would not venture out and even consider buying a home unless you have a minimum of a 10 to 15% down payment.
Home buying - The new paradigm
There
was a time when this was not really a question at all. My parents
purchased their first home in a southwest suburb of Chicago for less
than $4,000. Due to inflation, the cost of buying a home seems to
have no relationship with today's income levels. This is why the housing
boom that took place in the early 2000's was accompanied by creative
mortgage financing. The truth is that there are a lot of people that
should not buy a home. This may be due to lifestyle issues (such as
needing to move frequently), but for many people it is simply not the most affordable option.
The video below is a little dated, but the mathematical process is sound.
Does it make sense for everyone to own a home?
Everyone
needs a place to live, right? Unless you are living at home with your
parents rent-free, you are like the rest of us and need a place to
lay your head on a pillow each night. So what it comes down to for
most people is a rent versus buy decision. In my view, renting is no
longer simply for the poor and uninitiated. There was a time, not too
many years ago, when owning a home was a prerequisite to being
considered responsible contributing member of society. I think people
are far more open-minded today to the possibility of renting.
One
of the premises of the notion that everyone
should buy a home is that the value of residential real estate will always rise.
Using this argument, one would be foolish not to buy a home if values were, in fact, doubling every 12 to 15 years. Of course, in recent years
we've not only not seen this kind of growth, we have had a steep decline in home
prices. One radio commercial playing frequently these days is from Quicken
Loans. They use the example of a person that owns a home worth
$150,000 and has a $300,000 mortgage. They tout the fact that under
a new government program a person in such a predicament may still be
able to refinance at a lower interest rate. This tells you just how many people are out there in so-called "under water" houses.Some
may dismiss the current real estate recession as being temporary, but
many experts believe that it could be decades before real estate
values return to the level they were in 2005.
Peter Schiff shares how people laugh at him for renting vs. buying
Are you better off renting?
If you are unsure that you will be living in your current city for at least five years, I would definitely not buy a home. The five year rule is a rule of thumb that many financial writers use, but I might even go further with that rule today and stretch it out to seven years (or longer). I know that there will be a lot of people that disagree with me, but with the current volatility of home prices I think you really have to be a long term player to take on the risk of buying in this market. Of course, this is very general advice and would not apply to all real estate markets in the country and each person's financial situation is unique.
Even if you do plan to be in your current location for the foreseeable future, it may simply be a better deal to rent. One way to analyze this is to go and get pre-qualified for a mortgage and find out what your payment would be on the size house you are considering buying. Compare that payment to the going rent prices for that same size home (be sure to included taxes and insurance and money for maintenance as well). One rule of thumb used frequently within the world of rental real estate is the rule of 1%. You can take the value of a home and use 1% to determine what the monthly rent should be. For example, a $100,000 home 'should' rent for about $1,000 monthly. If you can rent for less than this amount, renting is likely a better option. Renting is a better option than buying in many major metro areas of the United States and will likely continue to be for years to come. Where I live in Palm Coast, FL a nice four bedroom home (10 minutes from the beach) can be rented for less than a $1,000 monthly!.
I found a rent vs. buy calculator on Yahoo finance that looks interesting (although I have not run it through the paces) and it might be a useful tool in your own analysis.
One Big Reason Not To Buy
With the current financial crisis that many local and state governments are facing, property taxes represent a ready source of cash that politicians simply can not resist. A friend of mine recently moved from Chicago mostly due to rising property taxes. One of my relatives that lives in Chicago shared with me that he pays more than $10,000 yearly just for his property taxes. With property taxes at this level, do you really own your home or are you simply renting it from the government? Some may argue that landlords build in the cost of property taxes into the monthly rent. I am sure that is true to some extent, but in many cases market forces simply don't allow them to do so.
Most Affordable Real Estate Markets To Buy A Home
Indianapolis (IN), Dayton (OH), Lakeland (FL), Modesto (CA), Grand Rapids (MI), Buffalo (NY), Ogden (UT), Syracuse (NY), Akron (OH), Cincinatti (OH) (source: CNN Money). There are also bargains to be found in top foreclosure areas like Las Vegas. While there is not always a direct correlation between low home prices and low rents, there usually is.
There is also a very widespread misconception that there are no 'nice' rental homes. This may have been true in the past, today you can find homes to rent every bit as nice as new model homes.
This is another clear misunderstanding that many people have about home ownership. I am not sure why anyone would consider a home tantamount to a retirement plan. You will still need a place to live during retirement, so you will not be able to cash in your house and use those funds as part of your nest egg. The exception to this would be those that sell a large home and buy a smaller home and pocket the difference toward retirement. In my view, for most people, the value of your home should not be included in your retirement savings.
While I am personally not persuaded that retirement is a biblical concept, I know that many look forward to the day when they can at least cut back on their work schedule and make time for things they could not do during their working years. I have no problem with this perspective at all. I do believe, however, that one can be a renter and still save and accumulate money for their latter years. In many cases the amount of available money you have to direct toward long term investing may be substantially more if you rent rather than buy a home.
Conclusion:
You are not a financial failure, unambitious, or stupid if you are a renter. In fact, you may turn out to be smarter than those of us that have purchased homes in the end. The bottom line on renting is that it should always be considered at least with equal weight to buying, especially in this real estate market. Another article of mine you may find of interest in on the concept of lease purchasing (or lease optioning), the middle ground option that works well for many.
Last summer I started hearing quite a
lot of buzz about a digital currency called Bitcoins. Ultimately, my
research led me to the decision to purchase a small amount of Bitcoins. I made my purchase when Bitcoins were valued at just $12.
Today, while writing this article, the value has jumped to more than
$100. I did not make my purchase as an "investment" but am very excited to see this dramatic rise in value.
What are Bitcoins?
Bitcoins are a digital
currency that is decentralized, meaning that there is no controlling
entity or government involved. The currency got its start about three
years ago and began with a starting value of just a few cents. Even
with the most recent spike in value, many still expect the Bitcoin
to go much higher.
Initially, I really liked the idea of a
digital currency alternative to the US dollar, but I was skeptical. For those of you that
are regular readers, you know that I am not a gloom and doomer, but
continue to have rising concerns over the United States' national
debt. I felt that it was prudent to begin to diversify by putting a
small amount of money in Bitcoins, and at this point I am happy I did.
What Can You Do With A Bitcoin?
You can spend your bitcoins at a very large and growing number of retail establishments (we are even planning to begin accepting Bitcoins for our products at ChristianMoney.com). You can sell your Bitcoins and convert them back to dollars through a Bitcoin exchange. There is also word that a Bitcoin debit card is coming soon that will allow you to use Bitcoins anywhere that accepts Visa or MasterCard and even Bitcoin ATMs.
Other Benefits Of Bitcoins
100% Anonymous
Can Not Be Frozen Or Taken By Creditors Or Any Government Agency
Can Be Used For Transactions Anywhere In The World
What Did Events In Cyprus Have To Do With The Rise In Value Of Bitcoins?
Cyprus, a small Mediterranean island and member of the European Union(EU), just experienced an extremely unique event. In order for the country to remain solvent, it cooperated with the EU in confiscating millions of Euros directly from its own citizens' bank accounts. While some might conjecture that this could never happen in the U.S., the truth is that it already has. Members of the EU are unable to print their own money. In order for the government to get its hands on more money it needed to take it from its citizens in the form of a massive tax on bank accounts.
Watch CNBC commentators discussing how events in Cyprus were linked to the spike in value of the Bitcoin.
The method here in the U.S. is more subtle since our government can print money. The dollars you have in your wallet or bank account remain there, but the value continues to whittle away as more and more money is put into circulation. You most likely see this every day as you buy gas or make a trip to the grocery store.
There is no doubt that many in Cyprus began to buy Bitcoins as a means of preserving their funds and keeping them out of the banking system. Since there is a finite number of Bitcoins available it is simple supply and demand. *** Max Keiser (video below) believes that the Bitcoin may go over $100,000 in value.
How Can You Get Involved?
I will be very honest with you that there is a learning curve to getting started buying Bitcoins, and the process is likely different than any other financial transaction you may have been involved with. For this reason, ChristianMoney.com has produced a 45 minute that you can rent and watch online at Amazon.com for just $2 - Bitcoin Video. The video takes you through the process on a step by step basis and makes it easy for anyone to get started with Bitcoins.
If you want to get more information and really become a Bitcoin fanatic, check out this Bitcoin discussion page on Reddit. My advice is to start small, put $20 in and get comfortable with the process. I don't know where we go from here on the value of the Bitcoin. It could drop like a rock but then again.... who knows?
You may consider it odd, but Dave Ramsey and I have both been writing and speaking on the topic of Christian finance for more than twenty years, but until ten days ago we had never met. I received a personal e mail from Dave a few weeks ago inviting me to visit his offices in Nashville and get an inside look at his operation. There is a very funny backstory here that I must share to give context to our meeting. Dave had become aware of some negative blog posts about him and the blogger had a very similar website address to ChristianMoney.com. Dave's invitation was prompted, in part, by his belief that I had written these critical articles. In fact, it was not until the evening after I had left Dave's office that we all figured out that this was a total misunderstanding. I remember laughing out loud after piecing it all together. Dave and I exchanged e mails, both very amused by the mistake.
Even though during my entire visit (unbeknownst to me), I was understood to be the guy writing hit pieces on Dave, everyone treated me with such warm Christian hospitality. Dave walked up to me that morning, dressed in cowboy boots and jeans, flashed a big smile, and offered a heartfelt welcome. He shared with me that he is in the midst of launching a new training program for those that have completed Financial Peace University (FPU). I called it FPU 201, but the official name is 'Legacy.' As a good writer who is always looking for an interesting angle, there it was - "What is Dave Ramsey's legacy?"
Dave's story is very much the same as my own. We both went bankrupt, we both used that learning experience to launch our teaching and writing careers, and I could tell from my personal time with him that we share the same battle scars. He exudes the one-on-one people skills that you will not find often in those of his stature. I have been around a lot of big name celebrities and know the drill of no eye contact, one word answers to questions, and the 'I am better than you, stop talking to me' treatment. Even though we just met, I felt like Dave was an old friend. Dave's lobby is open to fans that come in and watch him do his live show. Dave takes time during breaks to come out and greet them, take pictures, etc... Dave's 'Andy Griffith like' charm could be witnessed as he greeted each one of his fans with the same genuineness that he had greeted me (some travel hundreds of miles to do their 'debt free scream' from a live microphone in the Financial Peace Plaza lobby).
In addition to a hug from Dave, visitors will also meet 'Martha' (if we can continue the Mayberry metaphor - Aunt Bea), who offers cookies, coffee, and other snacks in the main lobby. My first thought after being offered a freshly baked cookie and a mug of hot cocoa was, "Where do I get a job application?"
What Is Dave Ramsey's Legacy?
If we were to consider Larry Burkett the 'George Washington' of the Christian financial teaching movement, we would have to consider Dave to be 'Abraham Lincoln.' More than 1.5 million people have gone through the Financial Peace University training. If you are unfamiliar with FPU, it is a thirteen week course presented in 90 minute weekly trainings (Dave on video and led by local volunteer facilitators). The foundation of the program is putting people on a track to become debt free.
Dave's Business Leadership
Dave's legacy would also include his business leadership style. He shares his twenty year journey of building his Nashville based Lampo Group in the book Entre' Leadership. Dave doesn't have employees; he has team members (latest count 360 of them). If you want a job working for Dave, get in line. The Lampo Group has been listed as one of the best companies to work for in Nashville for years. What's more, the interview process is 90 days long. Even if you make the cut, you then face 90 days of probation. Entre' Leadership even gives advice on how and when to terminate unproductive employees (ask someone to leave the team). I loved the premise of the book, which is that each team member is an entrepreneur, bringing their own ideas and energy to the overall mission of the organization. Brent Spicer, an Executive VP with the Lampo Group, told me that whenever plausible team members are paid on a commission basis, truly making them entrepreneurs within Dave's operation.
Dave's Endorsed Local Provider Program (ELP)
If you need to refinance your home, buy life insurance, buy or sell a home, purchase long term care insurance, or even find a financial planner, Dave can give you a referral virtually anywhere in the United States. I have to admit that I was a skeptic of Dave's referral system, wondering how he could really endorse thousands of local service providers nationwide, and do so with any level of reasonable quality control. I had a chance to meet the individuals that run Dave's ELP program and got a real insight on how the program works. The providers do pay for the 'leads' they receive from Dave, but there is a lot more going on than Dave simply selling the names of his followers. Through a carefully crafted system and a room filled with ELP coordinators, Dave's team prequalifies prospective providers and then carefully monitors the experience from start to finish. Providers are not only expected to follow Dave's principles, such as buying term instead of whole life insurance, they are also expected to provide great service as well. It is not easy to get selected to be a Dave Ramsey ELP, but it is easy to be fired. ELP management shared with me their zero tolerance policy for bad customer service or rogue financial advice.
Dave's Daughter Rachel Cruze
I won't be going out on much of a limb in sharing with you that I believe that Dave's Legacy also includes a young lady by the name of Rachel Cruze. Cruze, 24, is the second of Dave's three children. She is every bit the public speaker her father is, and has taken on the mission of bringing the Ramsey principles to college-aged kids around the country. For her young age, she is amazingly articulate and shares her father's passion for the debt free lifesyle. I also had a chance to meet Rachel during my visit.
Watch out Suze Orman, there may soon be a new first lady of finance.
What Else Does Dave Have Cooking?
Not only can we look forward to Dave's new legacy training (expected to become available in the fall of 2013), we get to watch another rising star within Lampo; Jon Acuff. Acuff's new book, "Start" will be released in late April. Contrary to what you might expect, Dave does not seem to mind sharing the limelight with his team members; he even team teaches many of his seminars with them.
Jon Acuff, most well known for his blog 'Stuff Christians Like,' had been a favorite guest speaker at Dave's team member devotionals (yes, Dave shuts the whole company down every Wednesday morning and takes time for a one hour devotional). Acuff has relocated from Atlanta to Nashville to further plug in to Dave's operation.
The Spanish Dave Ramsey?
Just when my head was about to explode trying to absorb it all, they tell me about Andres Gutierrez, who leads Dave's outreach to the Spanish community. In the beginning they tried distributing Dave's audios and videos by overdubbing them in Spanish. Brent Spicer laughed as he shared that with me and how they figured out it was not going to work. The answer: a Spanish speaking Dave Ramsey. Gutierrez, who I did not get a chance to meet, also has his own radio show and studio at the Lampo Group complex.
Dave's Ultimate Legacy?
I won't lie and tell you that I have historically been a regular listener to Dave's radio show. When I get out of my office and turn on the radio, it is usually the 'oldies station' that is playing. Knowing I had the upcoming visit, I tuned in a few times and something caught me a little off guard at the very end of the show. As Dave is closing out the program, he says, "the only way to financial peace is to walk with the Prince of Peace." After I heard that I was very moved. Here is a guy on secular radio who unabashedly shares his status as a follower of Christ. Dave's Marconi award, status as a New York Times best selling author, and numerous other accomplishments, pale in comparison to what I gleaned from this simple statement of faith. Thanks for the inside look Dave!
Follow The Latest Legal Filings On Profitable Sunrise -Click Here
New White Paper - What You Can Do Now To Recover Your Lost FundsClick Here
Major TV Expose' On Nanci Jo Frazer
Click On Excerpt For Full Story
New Zealand Warns About Nanci Jo Frazer's Group (NJF Global)
April 15, 2:52 pm - We have confirmed that Roman Novak did not show up at the SEC hearing today. We have also learned of a new e mail sent out to investors by Nanci Jo Frazer's group. The e mail portrays Nanci as a victim and minimizes her involvement with Profitable Sunrise. It continues to make reference to those of us that exposed the truth as 'cyber bullies.' Read Update Here
An excerpt -
"SERVING WITHOUT
FINANCIAL REWARD
We are figuring that most of the people in
Profitable Sunrise received her support without Nanci having any financial gain.
Only one of the leaders you heard doing the conference calls and webinars was in
her pay plan. She
worked up to 18 hours per day supporting those needing help even though she has
never met Roman in person. She was excited to see the charity grow even though
she was never compensated from the charity. The point is, her story is
not all that interesting and those who are making up false information are just
hurting a Christian sister and her family. This needs to stop now. Please join
us to protect one of our own who to this day picks up the phone to help. She has
never stopped working for all of us. She has always been there for us."
SEC Files Suit Against Profitable Sunrise April 5, 2013 1:00 pm Eastern
Profitable Sunrise - An Ongoing Investigative Report from ChristianMoney.com.This article was originally published on February 12, 2013 (see original article below).We
are continuously updating this story and those updates appear in
chronological order (most recent first). The worldwide scam targeted
Christians offering a daily interest rate of 1.5% to 2.7%, and the
amount of money involved is estimated to be more than $100 million. As
the blog that first broke the story, we have numerous sources providing
ongoing tips, recordings of past sales calls, and access to password
protected portals. If you would like to arrange an interview with James Paris, please contact him by e mail. If you are an investor and have lost money, we advise you to contact your state securities regulator as soon as possible. Nationwide Securities Regulators
***Jim Paris Appears With Pat Robertson On The 700 Club To Issue Warning***
List of provinces, states, and countries issuing warnings or cease and desist orders since we published this article:New
Brunswick, Quebec, Ontario, British Columbia, Alberta, Manitoba. In the
United States: Kentucky, Ohio, Florida, Wisconsin, Nevada, Minnesota,
California, Indiana, New Mexico, Texas, Delaware, North Dakota, South
Dakota, Alabama, North Carolina, South Carolina, Alaska, Maryland,
Maine, New Jersey, Louisiana, Tennessee, Missouri, and Oregon. Other
countries: New Zealand, and United Kingdom.
NJF Global Keeps Investors At Bay With Yet Another New Story About Why The Profitable Sunrise Website Has Been Offline For 3 Weeks
Shocking new conference call March 26, 2013. The speaker is Mike Rothermel. I was amazed at the disrespectful and arrogant tone throughout, as people try to simply get information about the money they have invested in Profitable Sunrise. At 51 minutes there is a very interesting interaction with an IRS agent that you don't want to miss.
Ohio Notice Of Intent To Issue Cease And Desist Order (thanks to our friends at RealScam.com) *** To View Full Document Click On It
We have been provided this recording from a source who tells us that the main speaker on this call is Tony Infante. The mini audio clip below is from an unknown additional speaker (this clip is included in the larger recording but has been excerpted since we believe it is very significant). The call took place at 9 pm on March 21, 2013.
"The cease and desist orders from the states...well they're telling you to cease and desist on selling securities, we're not selling any securities and we're free citizens. We have free will our rights are protected by the Constitution and the government is restrained by the Constitution. We can do what we want... just because the government says you can't do something that's... if it's an unconstitutional rule it doesn't apply to us. So, unless you're the attorney general the rule that they put out saying that you can't have anything to do with Profitable Sunrise that applies to him that doesn't apply to us..." Mike Rothermel
March 20, 2013 6:30 pm - NJF Global Group holds conference call and warns followers 'not to be worried if the Profitable Sunrise site is not back online until Monday.' Despite attendees attempt to ask questions they were told that no questions would be taken. Followers were told that there will be no more conference calls for at least two weeks. Everyone was told to be patient and not listen to anything that James Paris or Lynn Edgington are saying. Attendees were advised to make complaints to the sites that stream our show. Nanci Frazer demanded that we take down her picture and audio from this site or further action would be taken against us.
*** March 20, 2013 - We have multiple unconfirmed reports that the top leaders and promoters of PS are telling people that the Profitable Sunrise website will not be coming back online. After promising that the site was coming back online repeatedly and changing the time frame multiple times, now the story has changed again. There is supposedly going to be a new website and entirely new program that will come online on Friday. PS investors will be moved into the new program. If you have more complete information on the 'new plan' please post in the comments section below.
*** March 19, 2013- A New Scam Being Perpetrated On Profitable Sunrise Investors. You may be contacted by someone claiming to work with the government. They will offer to assist you in obtaining a refund of the money you have invested. You will be asked to pay a fee of $30. Some are informing me that they are also being asked to provide their banking information. The government will appoint a receiver and any assets will be distributed by the receiver's office. This usually takes a few months to happen. I would be highly skeptical of any other offers for the return of your money, especially if they want you to pay a fee and they require your banking information. This is not how a legitimate receiver operates.
March 18, 2013 - List of provinces, states, and countries issuing warnings or cease and desist orders: Ohio, Florida, Wisconsin, Nevada, Minnesota, California, Indiana, Maine, New Mexico, Texas, Delaware, North Dakota, New Jersey, South Dakota, Alabama, North Carolina, South Carolina, Alaska, Maryland, New Brunswick, Quebec, Ontario, British Columbia, Alberta, New Zealand, and United Kingdom.
March 18, 2013 11:25 am - It appears that top promoters of Profitable Sunrise are closely monitoring this page as they have now password protected most of their website and changed the password. Top leaders continue to promote the idea that the servers are being migrated and that the site will be back online soon in Hong Kong.
Post made this morning to the NJF Global Group site-
"WE ARE ALL WAITING FOR SERVER MIGRATION TO BE COMPLETE. We cannot email support until it is back online to be advised as to the decisions of their Legal Team as to the function of their website in relation to those states and countries requesting registration. We are confident Mr. Novak will keep his word on all things as he always has thus far.
We ask that the Christian Media Gurus and others be respectful of the many Christian individuals and families who have come to this program because of the positive research that was presented for the past three years. We as Christian brothers and sisters are to lift each other up and support... helping all to end up in the right direction. We insist that you remove all destructive posts if you are who you say you are. We keep you in our prayers as well."
March 16, 2013 11:22 am - Top Profitable Sunrise promoter Nanci Jo Frazer defies cease and desist orders by continuing to market the opportunity on her website. That page is now password protected but she is giving out the password 'successtoday' for access. Additionally, she continues to tout the future viability of Profitable Sunrise to her followers suggesting that Roman Novak's website will be back online soon. Some of her followers are now posting in the forums that the Profitable Sunrise website is being moved to China (Hong Kong) to avoid U.S. jurisdiction.
*** New Audio Below Just Posted March 15, 2013 ***
March 18, 2013 3:46 pm - New Jersey’s top law enforcement official and the Division of Consumer Affairs’ Bureau of Securities issued an alert to all New Jersey investors regarding a foreign-based company known as Profitable Sunrise. Click here.
March 18, 2013 11:19 am - Maryland Attorney General issues cease and desist order against offshore internet investment scheme. Click here.
March 17, 2013 2:00 pm - Maine warns of online investment scam. Click here.
March 14, 2013 7:39 pm - Sources informing us that many of the promoters of Profitable Sunrise being served subpoenas by law enforcement today.
March 14, 2013 6:05pm - Our sources inform us that California and South Dakota are now joining the growing number of states taking action against Profitable Sunrise.
March 14, 2013 3:05 pm - Investor alert: Ohioans warned about potential fraud tied to foreign website. Click here.
March 14, 2013 2:50 pm - Florida Office of Financial Regulation warns Florida investors about possible fraud with online overseas investments. Click here.
March 14, 2013 2:43pm - Attorney General Beau Biden puts an end to a profitable investment scam in Delaware. Click here.
March 14, 2013 12:11 pm - Minnesota regulators accuse Profitable Sunrise of fraud. Click here.
March 14, 2013 10:26 am - Wisconsin officials encouraged anyone who has invested with Profitable Sunrise to contact the state Division of Securities enforcement office. Click here.
March 14, 2013 9:23 am - Today the Kentucky Department of Financial Institutions (DFI) issued an emergency cease and desist order against an international company called Profitable Sunrise and its operators. Click here.
March 14, 2013 8:33 am - ProfitableSunrise.com is now offline.
March 12, 2013 4:00 pm - The British Columbia Securities Commission is warning the public not to send money to Profitable Sunrise, an entity that purports to be incorporated and registered in the United Kingdom, and claims to provide short-term bridge loans to companies in the United States.
March 12, 2013 12:49pm - Ontario Securities Commission | OSC INVESTOR ALERT: Inter Reef Ltd., Roman Novak and Radoslav Novak (doing business as Profitable Sunrise)
March 11, 2013 1:33 pm - Anonymous tip suggests server address of Profitable Sunrise servers may be traced to Montreal
Profitable Sunrise.com points to 208.64.126.220 IP which belongs to BlackLotus AntiDDOS, which is just providing a layer of protection by means of a tunnel to the real site which is hiding its location. The tunnel endpoint (and actual PS host) is at server1.profitablesunrise.com with IP address 184.107.117.134 which is provided by Server4Sale hosing reselling company and the block of 6 IP addresses was leased from iWeb Technologies Inc. of Canada. So, if anyone wants to shut them down or seize their database, logs and files, might be able to contact http://iweb.com/ Montreal, Canada.
March 11, 2013 11:15 am - The Alberta Securities Commission issues warning on Profitable Sunrise.
March 10, 2013 10:15 am - Profitable Sunrise added to Wikipedia HYIP Scam page
March 9, 2013 9:25 pm - We have learned that the Better Business Bureau has given Profitable Sunrise an F rating, issued a special warning, and has classified the business as a Ponzi scheme.
March 9, 2013 7:50 pm - James Paris makes public offer to Nanci Jo Frazer and Roman Novak to appear on his live Sunday night show to give their side of the story on Profitable Sunrise.
The company everyone has been told is legally operating in the UK is now banned from operating there. The Financial Services Authority has added Profitable Sunrise to its list of Unauthorized firms as of March 5, 2013 (see below). We are unable to find any license for securities or investments that ever existed for Profitable Sunrise in the UK. Profitable Sunrise Banned In UK
March 8, 2013 5:51 pm - We have learned that Profitable Sunrise has now been added to the list of unauthorized firms and individuals by the FSA in the United Kingdom.
An "Insider's View" Of NJF Global Group
"The Securities Laws Are So Loose Here In The United States... They Won't Touch
You Until You Hit About $50 Million Dollars Per Month ... When I Saw Profitable
Sunrise Was Offshore, That Was The Very First Thing That Attracted Me..."
Nanci Jo Frazer (full unedited audio below)
March 7, 2013 12:55 pm - NJF Global Group website comes back online with a new message from Nanci Jo Frazer.
"Change is Awesome!
As you all know we have been blessed and highly favored with a Profitable Sunrise Monday -Friday for 170 business days which is over 240 calendar days now. With the global growth of our NJF Global Group Community we have now come to a point where we need to make sure that everything is in order to insure a solid and compliant relationship with the program for my next 170 days.
There are two areas which will make sure we are protected:
1. The Door to our Ark is Closed until at least April 1st, 2013.
Our Leadership Team has been requesting for the past two weeks that we have grown large enough and need to take a pause to take care of our folks we have and get everyone's accounts perfected. I was not sure if Roman could grant this request (as we are his largest group).
With the recent inquiry in North Carolina... I decided to go ahead and put in a request to Roman as a part of our Spring Cleaning. I feel it is important to protect our community participants from any controversy by being mistaken as a salesperson for investments or securities. Even though at no time has Profitable Sunrise been officially proclaimed as a security, we know that in the USA the laws are very loose and could be molded to work against anyone if pressed.
So lets get rid of the problem and make sure nobody can sell, present, recruit or sign up anyone to protect our community participants from any harm. Problem solved... Roman did listen and has granted for us to be a fully closed community and shut off the sign up link capability. We will then revisit if we should open things up again depending on whatever policies are best to insure the longevity of our group and Profitable Sunrise.
2. The next step is to make sure that all participants pay their taxes. Before we were entrusted to do so on our own but as you know, not everyone is going to be honest about that and a small group who are not honest could hurt our entire community and the company. I have attached the founder of ProSun, Roman Novaks letter below for you to review on this matter.
I am on vacation right now but I wanted to stay in touch... Be Blessed Nanci Jo Frazer"
March 7, 2013 2:30 am - NJF Global Group website (Nanci Jo Frazer) disappears and is replaced with a website template featuring a picture of a cat with no explanation. All information about Profitable Sunrise has been purged from the site.
March 6, 2013 3:39 am - New NJF Global Conference Call "More confident than ever about the legitimacy of the program..." Note that they did record this call not us, and the recording was posted online and then forwarded to us by one of our readers. Very strange at the end how they are 'unable to take questions' from participants. Also, how they tell everyone not to call or contact their office for the next several days.
From Dave Ramsey On Twitter -
March 2, 2013 9:21 am - The New Zealand Herald confirming our reporting that Profitable Sunrise can be traced back to a shell corporation with the sole shareholder and director being a 45 year old woman by the name of Agnes Jouneau who lives in Seychelles.
"The Weekend Herald can also reveal that Ms Jouaneau was the director of 178 businesses registered in New Zealand that have been struck off. They were part of 1,800 shell companies removed by the Companies Office, following an investigation into one of these companies, SP Trading Ltd, which chartered a cargo plane carrying 35 tonnes of North Korean arms - including anti-aircraft missiles and rocket-propelled grenades - to Iran. The plane was stopped in Thailand in December 2009."
March 13, 2013 5:38 pm - I just got off the phone with an individual at Pastor Nanci Jo Frazer's office and he says that she just left for vacation with her family and is unavailable for comment.
Profitable Sunrise Breaking News - North Carolina Issues Cease And Desist Order
On February 27, 2013, the Securities Division of the North Carolina Department of the Secretary of State issued a Temporary Order to Cease and Desist to Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise. Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise were ordered to cease and desist from offering for sale, soliciting offers to purchase or selling, in or from North Carolina, any securities unless and until such securities have been registered and Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise become registered as dealers or salesmen of securities. The Temporary Order to Cease and Desist found that Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise offered investment contracts in the form of investment plans, made available through their website http://www.profitablesunrise.com, in violation of the North Carolina Securities Act. The Temporary Order to Cease and Desist gives Respondents 30 days in which to request a hearing. If no such request is made during that time, the Temporary Order to Cease and Desist shall become final.
Pastor Nanci Jo Frazer On Conference Call (Below) (New audio obtained March 3, 2013) *** We do not have the date when this was originally recorded.
Original Story (below) published on February 12, 2013
The investment opportunity is called 'Profitable Sunrise,' and after a week and a half of investigating it, I can honestly tell you that I have more questions than when I started. I first learned of it from a friend who is a full time minister who shared with me that he had invested $250 in the program. He also informed me that a friend of his had invested $30,000. I posted a comment on my Facebook page looking for others that may have invested, and one more individual came forward to let me know that they had done so. It seems that I have just scratched the surface, not realizing how many people it seems are investing their money into this program.
New Video Just Added Feb 27, 2013
The company's motto is 'Get Richer With Every Sunrise.' The claim: investors will earn 1.6% to 2% daily with no risk. Just to give you an idea of what this really means, I thought it would be interesting to do the math on $100 over the course of one year at 2% daily. The result - $137,000. Of course, you would expect that anyone making such claims of returns like this would have a lot to back it up, right? No, not at all. What's more, the people I interviewed for this story seemed to have little concern about getting their hands on anything that would represent reasonable due diligence before having made their investment. See the full presentation here.I stand corrected - The interest is only paid on 'business' days and over the course of one year there are 250 business days. At 2%, $100 would grow to be $14,126 during this period. It is still a ludicrous claim, especially when they are telling people that is is a 'risk free' return. Additionally, I have never heard of interest not being owed on a holiday (but that is their system). If a loan is outstanding, interest accrues (holiday or not). Nonetheless, I want to be as accurate as possible here as we continue to uncover more details.
Special note on the three videos below. These videos were at one time on YouTube and were embedded here. The videos were then removed from YouTube by the promoters. We expected that, and downloaded copies of the videos and are hosting them now on our own server. We will not take them down under any circumstances. One of my sources has informed me that as of March 2 the organizers and promoters are working frantically to take down everything they have posted on YouTube to cover their tracks.
ChristianMoney.com located two individuals online who were promoting the investment opportunity. Although we were not able to get any of the details on the compensation being paid to promoters, there appears to be some sort of network-marketing-like structure to the recruitment of new investors. One individual explained to me that he has reached the point in his spiritual walk that he no longer needs to ask how, he can just accept on faith that the returns are real. Another individual, informing me that she is a pastor, says she is recruiting more than 100 people per day into the investment opportunity. She claims that the organization is operating offshore and is exempt from securities regulations and U.S. laws. Despite going on the record with ChristianMoney.com for thirty minutes, she requested (afterward) that we not mention her name.
Who is behind Profitable Sunrise? This is the question we have tried to get an answer to and it was not easy. Checking the registration of their website, we found two phone numbers, both of which have area codes placing them in Central Florida. The pastor we interviewed could not tell us where the company was based, but we did find a Birmingham, England address on their Internet records. Despite this address, we were told that this was just a 'drop box' and that there was no one physically at this address.The corporate name behind the operation is Inter Reef, LTD. but we don't know where this entity is incorporated or if they have any physical office location.
The principals behind the company are two brothers; Roman and Radoslav Novak. Where are they? We don't know and have not been able to find out. Over a week ago, ChristianMoney.com submitted a formal request for an Interview through the company's website and we have yet to receive a response. The pastor we interviewed refused to connect us with the principals, saying that interviewing them would be a waste of their time. Of course, I pointed out that we are the website of record for Christians and money and that we would be publishing an article with or without their participation; nonetheless we never received a response.
The pastor we interviewed explained that the investors she is recruiting are tired of the U.S. banking system, which she explained takes in your money and profits from it while sharing with depositors very small rates of interest. She said that Profitable Sunrise allows investors to do what the bank does with its own money. These disenfranchised bank depositors and U.S. investors have turned to Roman Novak who has graciously provided them a way to make the 'real money' like the big banks and corporations.
How Does Profitable Sunrise Earn These Returns?
When asked how these returns were able to be generated, we were told that Roman Novak makes 'hard money loans' at very high interest rates to businesses that need short term funding. "The loans are at zero risk since they are insured and backed by hard assets." Each of the individuals we interviewed said they know that the opportunity is legitimate since they have already seen early investors being paid. Of course, there is the possibility that early investors returns are coming from the deposits of the current investors.
I have a very open mind. In fact, probably too much so. This is not about me trying to spoil the party for my Christian brothers and sisters. If this investment is legitimate, we ask for Mr. Novak to provide us with a physical office addresss, audited financial statements, and an on the record interview. We will gladly provide you the chance to share your side of the story.
*** Important Note On Comments Below - The comments extend beyond one page and you must hit the small arrow key at the bottom of the page to move to the next page.
Peer To Peer Lending (P2P) is a new and unique way for individuals to borrow money and for investors to earn superior returns to CD's, savings accounts, and government bonds. An individual seeking a loan fills out an application at a P2P lending site such as Lending Club,Prosper, or Peerform. If their credit is approved, the loan is then funded by a group of investors. Based on the credit profile of the borrower, the interest rate will then be determined. Investors can receive returns from 5 -13 percent.
Although the concept has been around for at least six years, it seems to just now really be hitting its stride. The Lending Club just surpassed $1 billion in personal loans. With Lending Club, borrowers can receive unsecured loans for up to $35,000. The most popular use of these funds if to pay off credit cards.
Investing In Personal Loans
From the Lending Club website -
"Most investors spread their investment across hundreds of Notes, investing as little as $25 and as much as $5,000 into each Note. You can choose Notes to invest in using the automatic portfolio builder, which helps you instantly create a portfolio of Notes based on your desired interest rate and risk tolerance. Or you can build your own filters--search for notes based on criteria such as Credit Score, loan purpose, loan term (36 or 60 months), Debt-to-Income (DTI) ratio or even specific keywords in the loan description."
How Easy Is It To Get Approved For A Loan?
From The Lending Club Website -
"We approve fewer than 10% of the loan applications, based on stringent credit criteria designed to focus on the most creditworthy borrowers. The majority of our members use the loans to pay off high interest rate loans, most often credit card debt."
Conclusion
I really love this concept, both as a source of loans as well as a new and interesting way to invest. With the anti-bank sentiment in the country, it seems like the time may be right for an innovative solution like this.
If you have received a loan or invested money with a P2P lender, please use the comments section below to share your experience and we can start a conversation.
This graduation season many people are stumped settling on a gift idea. I was thinking about this the other day and remembered how popular it was when I was working as a stockbroker for clients to buy a single share of stock and gift it to a young person. In some cases, they even went so far as to frame it. I always thought this was a really unique idea. It was especially popular to gift a share of stock in Walt Disney Corp as they have a terrific looking certificate design. I heard feedback from clients that their gift of a share of stock was a big hit and I passed the idea along to other clients over the years and always got enthusiastic feedback.
How To Buy A Single Share Of Stock
You can approach this one of two ways. You can open up a stock account at a discount broker and enter an order for one share of the stock you want to purchase. After the stock appears in your account, you can contact the brokerage and tell them that you want to take physical possession of the stock certificate and that you want to gift it. They will provide you some paperwork to complete to make this all happen. It will take about 6 to 8 weeks for your stock certificate to show up in the mail. The truth is that unless you have significant other business with a brokerage firm, they will likely be very annoyed dealing with your request.
A better option is to do this through OneShare, a company that specializes in gifts of single shares of stock. They charge the actual market price for the share of stock plus about $39 as a service fee. This seems like a much more feasible option than attempting to buy a single share of stock from a broker (unless you already have other business with them).
The list of stock certificates and designs can be reviewed here. My favorite is the Dreamworks certificate that has a head shot of Shrek on it.
One of the added benefits of using OneShare is that even though it takes a few weeks for the stock certificate to arrive, they will provide a very nice card announcing the gift of stock.
While this gift idea might seem like a pure novelty, a couple of decades down the road a single share of stock in the right company may actually be worth a significant sum. A single share of Microsoft sold for $21 in 1986. With stock splits one share would now be 288 shares and be worth almost $9,000!
If you would like to actually buy stock in smaller increments on an ongoing basis for yourself or a young person, you might want to check out a site called Drip Investor. A site like this is for those that want to really accumulate a large position in a stock but through small incremental monthly investing. This is the method that small investment clubs many times start with.
Savings Bonds Are Just Not As Interesting And They Earn Virtually Nothing
I have received savings bonds as gifts when I was a young person but I don't know of any young person that knows much about finances that will think much of your gift. The earning rate on government savings bonds is .60% (less than 1 percent interest per year!).
Final Thoughts
A child under the age of 18 can not own stock in their name solely, but One Share will assist by registering the share in their name with the name of an adult custodian. Once they are 18 they can register the share in just their own name.
My curiosity was piqued recently when I began to hear a number of conservative radio talk show hosts promoting diamonds as an investment. For those who are my regular readers, you know that I don't much put stock in the investment advice of talk radio hosts as they seem to be willing to pitch anything. We have covered extensively a company called Goldline which is aggressively promoted by Sean Hannity and Glenn Beck. Goldline sells gold and gold coins and was criminally charged in 2011 and recently settled those charges by refunding $4.5 million dollars to affected customers.
It seems like the latest hot investment to hit talk radio is diamonds. Michael Medved, Dennis Prager, and Laura Ingraham, are among those promoting diamonds as an investment. I have always been very skeptical about unusual investments such as this. After all, what's wrong with good old mutual funds, stocks, and bonds? Many people simply feel that this is too boring of a path for them and they have a need to go on a hunt for the exotic.
The typical listener to one of these radio shows has zero experience investing in diamonds. This is what makes me deeply concerned about this. I have spent most of my adult life working in the investment world and I know nothing about investing in diamonds. In fact, for several days I have been doing research for this article and in the end I think I am more confused than when I started.
To determine the value of a diamond you have to take into consideration the 4 C's
Cut
Color
Clarity
Carat
The claim is that diamonds rose 22% in value last year. That may be true, but I have no way of independently verifying this as there are far too many variables. Perhaps the more important question is what the retail markup is of these diamonds? As I have pointed out in prior articles on gold coins, in some cases you must see a 30% or more increase in value just to break even. That is because you are paying retail and must sell your coins back at wholesale. A quick review of the legal disclosure on Pinnacle's website suggests that the 'spread' between retail and wholesale would be 20% and 35%. Who would buy an 'investment' that was worth 20 to 35 percent less on the first day they owned it? Based on this disclosure, even if you had invested with them last year and earned 22% you would most likely not be able to sell your diamonds back for what you paid.
The truth is that the average listener to one of these talk shows has no business investing in diamonds. Just like investing in art, collectibles, antiques, and the like, I believe that the only people that should invest in diamonds are those that are experts in that field. There are far too many variables and subjective determinants to calculate a fair market value.
Another reason to be wary of diamonds as an investment is that one corporate entity largely controls the diamond market. De Beers at one time maintained a virtual monopoly in the diamond market and still control an estimated 40% share. This one of the major reasons why diamonds do not trade as legitimate commodities such as gold and oil. There is a move afoot to form an exchange traded fund that would buy diamonds. I have to admit that I find this interesting and if I were to ever invest in diamonds I would probably do so within the framework of an ETF such as this.
For now, I would have to give diamonds a big thumbs down as an investment. Agree or disagree, please use the comments section below and let's start a conversation.
Several months ago I wrote an article addressing the rising number of complaints against one of Glenn Beck's sponsors, Goldline. The big money for gold dealers like Goldline is not in selling gold, but gold collectible coins. My prior article outlines this in detail and raises the important warning that gold coins are sold for as much as 30 to 40% more than the dealer cost. This means that if you 'invest' in gold coins you must see the value go up 30 to 40% just to cover the dealer profit. To put it a better way, if you invest $10,000 in gold coins you truly have only about $6,000 to $7,000 in assets on day one.
I was listening to Beck's radio show yesterday and heard him do his standard Goldine commercial. It was a bit different than I have heard in the past. Glenn told his listeners that how he buys gold is to do so via gold collectible coins. He then repeated the tired old pitch about the idea that collectible coins would not be confiscated if the government decides to force people to turn in their gold.
Even though it is true that President Roosevelt did make owning gold illegal in 1933 this applied to gold coins as well as gold bars. It is a myth that buying collectible gold coins would have exempted you from this presidential executive order. The reality is that only one person faced prosecution under this order and the idea that it could ever be enacted again is highly unlikely.
Could the phone call have gone like this:
"Glenn, Goldine here. Can you help us out by telling your listeners to buy the collectible gold coins? We make so little on selling gold, pushing the collectible coins would really help us out right now. Why don't you give your audience the pitch about collectible gold coins being exempt from government confiscation."
Funny, I did not hear Glenn tell his listeners that their investment would be worth 60 cents on the dollar the day they sent their money off to Goldline. I like Glenn Beck but in many years of rubbing elbow with these media personalities, I have found that almost all will pitch anything they can make a buck on.
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