Bottom Line Secrets Magazine, a Scam?
Posted on | October 2, 2008 |
I recently received a sample issue of the Bottom Line Personal magazine. The tag line states: “Bottom Line makes you Healthier, Wealthier, Wiser… Happier too.”
With headlines touting such things as the “Millionaire’s secret to retiring richer faster”, my scam alarm was ringing loudly.
Secret # 1. How to Make More Money Than 90% of Investors - Even if You’re Lousy at Picking Stocks.
They give some silly example of an investor who lost 80% of his nest egg in the tech bubble bust of 2000. He then turned his remaining $33,000 into $7 million over the next 15 months.
Wow! Sounds great. How’d he do it?
By eliminating his loses, of course. We’d all be millionaires if we never lost money in the stock market, right?
Their example goes on to state that:
If you invest $5,000, and lose 20%, you’re down to $4,000 ($1,000 is 20% of $5,000).
Fair enough.
But for you to recover that loss you need to earn a 25$ return ($1,000 is 25% of $4,000).
OK, I’m with them so far.
The more you lose, the harder it is to get back. Recovery from a 50% loss requires a 100% gain, and recovery from a 75% loss requires a 300% gain.
Then how the hell did the investor profiled in the tech bubble example get back his 80% loss just from avoiding further losses?
The answer is he didn’t, it’s a load of bunk.
But the underlying methodology is sound: limit your losses in the stock market by using stop-loss orders.
Secret # 2. Make Your Grandchild a TAX-FREE Millionaire!
The claim:
“If your teenage child or grandchild is gainfully employed, he can contribute up to $4,000 a year to a Roth IRA. If the child puts $4,000 a year away between the ages of 16 and 21 and the Roth IRA earns 10% per year, the child will have $2,045,042 at the age of 65.”
Sounds great on the surface. But what’s the catch?
Inflation.
After those 49 years piling up in the Roth IRA, that $2,045,042 would be worth only $1,391,185 in today’s dollars, assuming a relatively benign 3% inflation rate. That and it took 49 years to get there, so while the headline makes it seem like it’s getting rich quick, it’s anything but.
Does this make it a scam, or mean it’s not worth doing? No, of course not. It’s the point of an IRA or 401(k) in the first place. It’s also the basis of David Bach’s Automatic Millionaire. Just don’t confuse automatic with instant.
Secret # 3. How to Pay Off Your 30-Year Mortgage in Just 23 Years.
No secret here - it’s called a Biweekly mortgage payment. The only catch is to make sure your lender doesn’t charge a fee for the program or any pre-payment penalties.
Secret #4. Lower Your Tax Bracket.
The claim:
In one easy step, lower your rate to as low as 15%!
This one is so vague I can’t be sure what the “secret” is they’re selling. It could be creating your own business as some form of tax shelter. Maybe it’s legal, maybe it’s not. There are legal ways of doing this. For example, you could invest in tax-free municipal bonds or max out your pre-tax retirement accounts to lower your taxable income.
Secret #5. How to Boost Your Tax Refund.
The claim:
You can boost your tax refund even if you take the standard deduction!
Yeah, I can over-pay the government every pay period by claiming 0 dependants. Whoopdy-do! No thanks, I’d rather owe the government $10 at the end of the year. Then I know I’m keeping most of my money.
So are these really scams?
I think scam is probably too harsh a word. I haven’t actually seen a full issue, but this “free copy” mailer certainly makes it seem like they are trying to make a buck (or take a few of yours) selling information that’s relatively easy to find on the Internet or through other sources. In short, there’s nothing secret about any of it.
Still, it just looks “scammy.” It feels like something targeting gullible retirees. In fact, looking at reader testimonial page shows 6 people - all over the age of 60.
Bottom line on the Bottom Line Magazine: Read some personal finance magazines or blogs and save your money.
- Happy Tax Freedom Day, Americans!
- Boring is Beautiful!
- 6 Things to Know About Car Insurance.
- Mortgage Meltdown Word of the Week: Liar Loans.
- 401k Introduction
- First-Time Homebuyers $20,000 Tax Credit Being Discussed
- Introduction to the IRA
- Do You Have to Pay “Charged Off” and Other Old Debt?
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7 Responses to “Bottom Line Secrets Magazine, a Scam?”
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Unique visits since 2008:
October 2nd, 2008 @ 9:34 am
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
March 13th, 2009 @ 9:09 pm
Hello,
As a reasonabley intelligent person it is obvious that this whole scam is simply a play on the current trends and beliefs in our culture. As a psychologist during the 80’s it was easy to see that new age move to the
“Mystic” was replacing science and common sense
with cult thinking. The sale of Green, meatless, free range, crystel, pyramid,magnet,
psuedo mystical, collective unconscious ideas
of the 20th century offered a fragmented sense of faith that so many of our culture found so missing. Add a few cultural icons and the sale
of beliefs quickly became a multibillion dollar industry.
(as an aside, I have been working on the importance of form in our existence, both as we project it, recieve it, and most importantly
believe it, for over thirty years and anyone who seriously approaches these issues quickly realizes the many levels at which these phenomena operate. Linguistic, perceptual, cognitive, and spatial are but a few of the metalevels interacting in the soup of existance. However, since half of the people are below average, and knowledge(whatever that is)doubles as a geometric funtion at rates that are beyond understanding (let alone forming belief systems regarding the drops of this raging river which don’t really exist outside of context) there is a huge market for
“the truth”. And sadly folks that’s what all this is about…marketing. Just getting you to read “supposed truth” makes you a potential mark on many levels. So trying to judge these
“ideas” on merit is to miss the point. Let me demonstrate.
When you read any of these “webbed notions”(a concept that must be understood) your information is transmitted across countless related strands. This sets in motion
thousands of events which involve the actual selling and tansmiting of information about you that you have never even concidered.
Well, I have company coming and this stuff just gets more and more complex, so I’ll give you a concrete example. I happened to see Oprah
being associated with Acai berries and diet. Oprah, is without question the new wave queen of everything from literiture to countless products, dieting being the most obvious. Now I mean no disrespect to an obvious Icon but truthfully, if I witness her having one more public “break-through” I’ll freak. Bibliotherapy has never even stood up to placebo folks. SORRY!! Don’t throw fruit or vegtables..give them to the food bank. At any rate, this one weak moment when I concidered that there might be an easy way to shed the holiday roll….led me here tonight. Because as I said there are webs of sales forces and just by looking at this article and concidering a free sample (which I imediately canceled) brought to my door…you guessed it..
a nice big fat BOTTOMLINE BOOK. I didn’t ask for it.. in fact I never heard of it. I’m still cancelling it..in fact that’s why I’m here. The Acai people had to sign me off four seperate lists which were sending products my way. ANd guess what..I got the berries…and the book…after 7 phone calls and there is more on the way.
So when I see folks talking about beating the market through Bottomline “knowledge” I swear it misses the point. In fact, the market is rigged. The folks which set the standard sell the info and that’s the name of that tune…company’s here.later
Please forgive my spelling ‘night
May 6th, 2009 @ 12:38 pm
Well written and appreciated critical look at The Bottom Line’s claims. Thanks for doing that, BUT, I must say that it’s too bad you aren’t a “bottom line” reader who knows the magazine better.
It’s a really charming, entertain, and VERY consumer oriented publication with many true gems sprinkled amid highly interesting stories.
These days your criticism that “all of this could be found on the net” would apply to just about ANY publication on ANY topic.
What you pay for with the bottom line is it’s editor’s wonderful taste and take, just like any magazine. And theirs is top notch I must say!
May 13th, 2009 @ 4:02 pm
Walt,
I wouldn’t be surprised at all if Bottom Line Mag was a decent publication. I’ve seen way too many great magazines send out these horribly scammy mailers… it makes me wonder why they’re using that marketing firm. Either way, the “sample issue” was definitely ringing the scam alarm…
Thanks for stopping by and sharing your thoughts!
November 14th, 2009 @ 11:46 am
Thanks everyone for your input. Glad I read them…I won’t send in for a copy.
December 8th, 2009 @ 1:46 pm
I found it useful in that it brought up things that thoughts and ideas to check into further.
January 9th, 2010 @ 3:28 pm
I agree with Steve, definately brought things to your attention in a busy life that sometimes we may ignore or leave on the back burner. Yes, you can find the information all over the internet but having the links, “hmm’s i never thought of that’s” and other highlighted awareness are great. Surely, you don’t believe everything you read on the internet either before researching.