The Bernard Madoff scandal is making the news again today. I haven't written much about financial scandals, rip-offs, and white collar crime, so now's as good a time as any, I suppose, to fill you in on a few things.

First off, let's just say that Bernie Madoff is a jerk. He took people's money in an elaborate Ponzi scheme and made off with BILLIONS. Gone are the days when MILLIONS of dollars ripped off will make the news circuit!

Madoff simply needs to be tried, sentenced, and forgetten about. "Investors" - you will NEVER get your money back.

IT'S GONE.

I put "investors" in quotes because a lot of those folks weren't investors. They were rich dreamers who wanted even more money than they already had.

They had an "In" to a supposedly too-good-to-be-true financial "system."

NEWSFLASH

If it's "too good to be true," it's too good to be true! Run - don't walk - away from stuff like this.

For as long as man has lived, there have been schemes concocted by shrewd, yet immoral and dispicable, people that seek to separate YOU from your MONEY.

The most famous, of course, was made famous by Italian immigrant, Charles Ponzi. He promised "investors" a 50 percent return on their money in a matter of days and he made good on his promise.

For a while.

He took new investor money and returned it, plus the 50 percent, to the gullible folks who gave Ponzi their money first. The last suckers got the shaft.

Of course, Ponzi went to jail and died poor. Just like Madoff ought to.

There are some lessons to be learned here.

1. The aforementioned, "If it's too good to be true" lesson. 
2. Invest like Warren Buffett - if you don't understand a "business," don't invest in it. Ponzi had no business other than taking people's money for himself.
3. If you hear about a scheme on a golf course, get in your golf cart and go home. Secure your money. Make sure your pockets weren't picked.
4. If it sounds like an "insider's secret," treat it as such. Insider trading is illegal for many reasons.
5. Invest in YOUR own business. Nobody else gives a damn about you or your financial plight. 

One last thing: There are legal Ponzi schemes, the most notable of which is Social Security. Yes, you read that right. It's a government-enacted program that is exactly a Ponzi scheme.

The reason that Social Security will go broke is that there are fewer and fewer "new investors" and the old investors want their guaranteed returns.

I'm not making any moral judgements here. In fact, I support Social Security. In its original fomulation, it was to be used as a social safety net that had more new investors than old. As long as that was the case, the system was sound and good.

But now that the demographics have turned upside down (many more collecting nowadays, not as many contributing, relatively speaking), the system is in peril.

Stay tuned for my solution to the Social Securty nightmare in a coming post. And don't get me started on Medicare! It's in a much more precarious state than Social Security ever will be, but you don't hear much about it.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

If you like Suze Orman (I don't, but it's not her advice, it's her delivery. She annoys me, so maybe she's better in book form!), go ahead and grab her 2009 Action Plan here.

Suze Orman's Free Book Download

The site gets hit pretty hard when there's a free book, so you may have to keep trying until you get through. There's a Spanish version there, too.

Here's a good primer on how our financial system is supposed to work. Could be very helpful in figuring out what's currently going on as well as finding out what went wrong.

Fed101

I've posted Chapter 6 of Stock Investing Basics over at Your Money Is Your Life.

It's all about goals, managing risk, and setting objectives. All important stuff, especially right now!

A note of caution: The worst days to invest in stocks are on days that end in "y" -- but it's also the only time!

So, choose wisely.

May be a good time to sit on some cash and wait until some rock-solid companies are cheaper in a few days. This week will be the litmus test whether the "bailout" will work to calm the market down or have to work itself out in the absence of a plan.

Money isn't everything. Enjoy life. Spend time with your family.

Here's a neat little Consumer Price Index (CPI) Inflation Calculator.

I'm not sure how this affects you, but I'm sure this will impact Microsoft's retail partners in a significant way: Microsoft yanks Money off retail shelves

That's right, Money will not be sold on store shelves any more. The only place to get Money is online (it's unclear whether it will be through MS only, or a variety of places online; what is clear is that the packaged, shrink-wrapped package will no longer be sold).

This is a step in the right direction. The trend for digital downloads is way up (Microsoft reports that sales of the digital version of Money equaled the packaged version, up from a 1:3 ratio the year before), it saves Microsoft a ton of money, not just in packaging but in picking up the software that doesn't sell (and then what?).

Plus, software in a package is so yesterday. For the consumer, it's just much more convenient to download and buy: No trips to the store, no waiting for the mail, no boxes to throw away, etc.

One tip for digital downloads: Make a backup right away and store it on disk (CD or DVD). DO NOT BUY THE BACKUP THAT THE VENDOR OFFERS. Number one, it's a waste of money. You CAN do it yourself. Second, you're kind of defeating the purpose of the digital download in that the vendor is still sending a physical product through the mail (or UPS, FedEx, etc.).

Is Quicken next? 

Contingency plans are always wise, and having backups available is part of that. Here's an article, How to Back-up Your Life from Stepcase Lifehack, that points out the critical parts of your life that you need to back up. I've written about this before in various forms, but the link below will take you to an easy-to-use backup script for backing up computer files.



Back Up Data from the Computer Monkeys



Of course, there's more to the article than backing up computer files. You also have to plan for contingencies in your personal life (plan on divorce, losing a spouse), money (of course! Wills, trusts, and insurance), and personal documents (like tax returns, birth certificates, and the like).



A home inventory is a good idea too.

Simple, great mortgage calculator --

FrogRate

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