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On the

Lighter Side

Al Jacobs invites you to take a break from the serious stuff and digress with a bit of diversion.  This month it's a short short story, which takes me back to my days as a deck seaman on a navy destroyer in the Pacific.  I'll not admit to there being any autobiographical inferences.

THE SALT

 



Explore with us here the many aspects of prosperity: spending, saving, investing, giving and receiving, health, education, and overall well-being.
                                          – Al Jacobs

 

Straight Talk from Al Jacobs

 

THE DECEPTION NEVER ENDS

 

The latest exposé to hit the circuit is the “pension advance” scheme, by which military veterans and retirees are induced, through high-pressure selling, to take cash advances secured by their retirement income.  The pitch is enticing: “Eliminate debt!  Launch a business!  Take your dream vacation!”

 

These advances are inherently payday loans which carry hefty charges.  A typical transaction might provide an up-front advance of $40,000, for which the borrower will pay back $1,015 monthly—often the entire pension check—for ten years.  Such borrowing works out to a per annum interest rate of about 27%.  The firms involved in these outrages maintain they’re not violating usury laws because they are not making “loans.”  Rather, they claim these are “purchase/sale agreements,” or “income stream buyouts,” or some other euphemism.  What they won’t call them is what they really are: “rip-offs.”

 

How is it that reasonably sensible persons can be ensnared by such trickery?  Part of the answer may be simple human naïveté.  However, note another commonality: the prevalence of offerings in which the elderly are targeted.  Two other such devices, reverse mortgages and variable annuities, which are equally directed at seniors, both contain the same components: hidden fees, buried commissions, and devious sales techniques.

 

I have no profound moral to present.  The only conclusion I will offer is the memorable line of financial columnist Al Lewis, creator of Al’s Emporium: “Wherever there’s money, there’s someone trying to steal it.”

 

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