The Magical Financial Solution
Over the past couple of weeks, cold calls have been coming through from various companies offering to show me the way to financial freedom. One particular call offered to show me the way to financial security. Now as I am in the industry, I needed more info (and I had a spare five minutes so let’s play). If they have found a magical strategy I need to know about it! They first run through their set of pre-qualifying questions to make sure I am a suitable candidate eg a job, homeowner (well I have a house I share with the bank!), and not too much debt. Once I am qualified by them as being the right type of fish for their regional fishing expedition, they tell me they can help me minimise my personal debt, grow my assets all while ensuring I pay as little personal tax as possible. Well, now my ears are pricked. All I need to do is attend one of their ‘free’ seminars conveniently being held in our town next week. And for my trouble of turning up, I’ll even receive a free tablet (the tech age steak knife set). And as an added bonus, if I do indeed turn up, I will be given the opportunity to receive a financial strategy personalised to my situation prepared by a professional adviser at no charge! In addition to the free tablet! Well, it must be Christmas! Can it get any better??
Well no, it can’t. And it won’t be better. As the saying goes – if it seems too good to be true it usually is. Unfortunately, I have come across people who have been caught up in the hype, have taken these ‘professional advisers’ at their word and ended up paying dearly for it. One case I do know of had a couple paying over $19,000 in fees to purchase a rental property off the plan. That is an outrageous amount! Would they have paid that much if they found the rental property themselves and gone to see their local bank manager? Probably not. Were they even in a position where they could afford this purchase? Have they completed a stress test on the borrowings to see the impact of a 2% interest rate rise or a decrease in their income? Again, probably not. Let’s hope it all works out for the best for them. However, I really dislike being cynical, but…….
Be wary of anyone offering ‘free’ financial advice. Someone somehow has to be paid for that advice. Nothing good in life is truly free!
The Money Edge | Bundaberg