Devil’s Advocate

Posted on January 02, 2023 | By John Risley | 0 Comments

“A few years ago I was introduced to a ‘businessman’ who claimed to be one of the world’s richest people. In fact, his name appeared on several billionaire lists. I agreed to invest alongside him by transferring several million dollars—money which was never to be seen again.”

A fool and his $$$ are soon…

We all know how that parable ends (though I would suggest replacing “soon” with “sometimes”). This is a subject with which I am intimately familiar, unfortunately, as that revised description definitely applies to me. There are lessons here, which I am happy to try and explain. They are the same sorts of lessons that apply to those who have lost money in the crypto debacle over the last short while.

Imagine this… you walk into your local bank to deposit a meaningful—to you—amount of money, with the expectation it will be properly cared for, will be there when you want it back and any promises of interest will be honoured. Then you are met by the manager who explains that there are no rules governing the safe-keeping of your funds, that the bank intends to lend the money out to ventures in which the bank’s shareholder has a controlling interest, that some of the money may well be spent on houses for the bank’s executives, that there are no rules around how much liquidity the bank has to maintain and, as a result, when you ask for your money back it might not be available, at least right away.  Chances are you would turn around and run, not walk, out of that particular bank as fast as you could.

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