The Ten Commandments of Investing: Discover 10 Keys to Find High-Return Investments Without Losing Your Hard-Earned Money

By Mark Cravens

Are you a busy professional, business opportunity seeker, or retiring baby boomer? If so, con artists are targeting YOU! According to the FTC, over 30 million Americans fell victim to fraud in 2005 alone! The Ten Commandments of Investing gives you a non-biased step-by-step system to evaluate your next investment so that you make money instead of losing hundreds of thousands of dollars to a con artist.

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Nov 1, 2008
• ISBN: 9781614483946

Book preview

CHAPTER 1

How to Trust Your Gut

It all began rather innocently. My sister said our uncle called her and spoke with her about an investment that could get her out of debt. When she explained it to me and asked my opinion, I said it sounded like a scam. She could do what she wanted, but it sounded too risky. Oh, if only I had thought about that statement again just a year later.

A year later:

I was about to travel to Phoenix for a construction seminar. I wanted to go but also did not want to leave my family for an entire week. Our time together was precious, especially with younger boys. As my partner heard about my struggle of go or don’t go, he said something came up for him, too, and that he could not go. He said it was okay if I did not want to go.

It was then that I told him about my dream of having a divine appointment. I was to meet someone and it would change my life forever. I told Tom I had this feeling about the divine appointment, and perhaps I would meet a good construction manager, equity investor, or someone else who would help us in our commercial real estate development company. Therefore, I decided to go.

It had been several years since I had seen my Uncle Don, who lived in Phoenix, so when the trip was set up I arranged to spend the first day with him, a Sunday, before classes began on Monday. We enjoyed the day and at the end, while we were kicking back in our recliners, sipping iced tea and catching up, I mentioned to him that he did some type of investment program a year earlier. So how did it go for you? I asked. Great, he replied. It pays every month, and I should be on track to be debt free by the end of the year.

Wow, was I ever surprised. I thought it was a scam. No, he said, I have visited the antique stores, and I know of people who have been in her programs for over three years and are making money. I asked more questions and got more answers—no pressure, no hype, just matter of fact answers. I decided to find out more.

More started when, while on a break on Monday, I called Pam, the woman who ran the program. She explained the workings of the program and its incredible rates of return. I did some research on her company and found it was good. Therefore, I invested with her.

I got the fever, unbeknownst to me, and started what I call stupid accounting. You know, the I’ll put in this much and in twelve months will have X dollars. The numbers get big fast and are very unrealistic, but somehow you start believing it is possible, even if you just receive a smaller percentage of these larger than life returns.

So, after the trip, when I got back to Tampa, I did some more research on her company and even talked with her banker. According to him, She is an outstanding citizen and recently had a huge grand opening with all types of city leaders and officials there. I spoke to two other investors who were receiving money monthly for over a year and were pleased as could be. Everything was checking out. I was praying about the opportunity, and it was going better and better. In two weeks, I had a return of 24 percent! Wow, was I surprised!

I invested some more and made 28 percent in thirty days. I invested some more and told some good, close friends and family about this program and what I was receiving. They, too, could not believe it. They did some due diligence and invested. Only by now, I had violated the First through Sixth and the Eighth Commandments of Investing, but I just didn’t know it.

The commandments are part of the story, too. The commandments were given to me after the program fell apart. They came to me early in the morning, a few weeks after I found out the truth about my investment. I woke up and wrote them down. They are The Ten Commandments of Investing (after Being Burnt Significantly). I am going to share them briefly during the rest of the story, explaining them in more detail in the following chapters. They are so life changing that you (and I) must not violate them or we will be burned significantly.

At first, I unknowingly violated the First Commandment of Investing (a year earlier), but forgot and violated it again in 2007.

The FIRST

Commandment of Investing

If it sounds too good to be true, it is bad. Run and don’t ever look back. Just trust your gut.

Every time I have violated this rule, I was burned.

Intuitively, a 28 percent return in a year (much less a month) is outrageous and unattainable, but I talked to people who were receiving it for over a year. An inner conflict ensued: Is this true? Is it a scam? What else should I do? Other companies can’t make this return; how can she?

My uncle spoke with others, family and friends he knew personally, who were receiving money for over a year. I reached out for additional investor references from Pam, who my uncle did not speak to, so I could ask about their returns. I interviewed them, and they shared their mutual skepticism at the beginning and their rewards for staying in the program. This was not a multi-level company, so they were not benefiting off of my joining or not; thus, their answers were more valid.

Therefore, I kept investing, but something in my gut would sometimes rise up and say, Is this real? I always explained away the gnawing feeling inside because it was working. I wanted to go up to see her stores, meet more investors, and see how this program was working successfully.

How did she get so much volume wholesaling antiques by buying estates and breaking them into smaller lots? Did breaking the parcels down to sell to other dealers and to her retail buyers in her store typically generate these high rates of return?

Pam offered to fly our family up to see the grand opening of her dealer’s warehouse. The new warehouse was for storing the large estate purchases and breaking them down into smaller lots for dealer auctions. Pam said it would be the largest dealer-only auction in the Southeast. The problem for me was the warehouse would not open until the end of June. My wife and I disagreed about whether or I should go up early or we should wait and go up together in June. We chose to wait for the grand opening, so I stayed in Florida.

BREAKOUT SESSION

It is easy to look back and see the faults in this investment program; however, would you have seen them then? What criteria would you use to evaluate an investment?

To share your strategy before you see all of the Commandments of Investing, log on to:

www.TheTenCommandmentsOfInvesting.com/breakout1.htm

BONUS: If you would like to hear the first two chapters of the story in the author’s own words, log on to

www.TheTenCommandmentsOfInvesting.com.

Utilizing the link, you can share your strategy and evaluation criteria. If you choose not to interact, then I would recommend that you take notes below to create a journal.

CHAPTER 2

Humble Pie Tastes Better 30 Days Later

You see, by not getting input from three people I firmly trusted for advice before I invested, I violated the Second Commandment of Investing.