Lesson 4 from the Financial World

Scams are real

The biggest problem with spending your life doing all the right things, investing and saving and focusing and sometimes sacrificing, is that it can all be undone at the end of life. This isn’t something that anyone likes to talk about, at least not about themselves. We all like to point to other people and sometimes laugh or just shake our heads sadly about how that person got scammed out of their life saving because they were too stupid about xyz.

They got caught in a romance scam or they were greedy and got into a Nigerian Prince scam or they cared too much about their grandchildren and were fooled into thinking that they needed to be bailed out of jail and they couldn’t tell anyone. The lists of scams could go on and on but there’s no point to that, really. Because there will always be new people thinking about new scams and they will be successful, not with the majority of people, but with enough people, that it’s successful and will spawn new scams with a new generation. And scammers rarely get caught and if they do, they don’t get punished enough. There is no death penalty for billions of dollars taken or millions of lives ruined (I’m not saying there should be, just that there isn’t.)

What all of us need to realize is that this isn’t just other people who are in danger. Everyone is in danger of being scammed. But people with more money are both more attractive to scammers and have more to lose. People who are in retirement or near retirement in particular have more to lose. You can spend your entire life building up a savings and doing everything “right” and then lose it all in one stupid minute of a mistake that doesn’t mean you were a bad person or even a stupid one. Sometimes it means you were a kind person and had all the right intentions, but someone just decided to take advantage of your vulnerability.

So, what do you do about this? We are now living a lot longer in retirement and there is a lot more of a problem with a long cognitive decline. My father watched his mother deal with cognitive decline in her later years and he swore it would never happen to him. He became a radical whole foods vegan after a heart attach at age 50 and he believed for the next 30 years that he was going to either never die or that he was going to die at full mental capacity. Neither of these was true. My mother ended up having a better health outcome in her later years, at least cognitively. She was sharp until the day she died. This was mostly due to luck because she didn’t follow my father’s rules about eating nor did she exercise obsessively like he did.

The reality is that we don’t know what fate genetics and luck will serve us in our later years. But preparing for it means accepting that we may all reach a point where we need someone to help us. Rather than feeling embarrassed about this, it is far better that we see it in the light of being generous with others to let them help us along a path they will later have to walk themselves. Give people around us a chance to see what it looks like close up. There is no reason for us to believe that only one kind of relationship is valuable to others. So find a person or two or three you can ask questions about your finances to. Keep asking questions. Set a limit of money that you don’t spend without a check in.

That said, be aware that elder financial abuse is often from people the elder thinks are reliable and trustworthy. So don’t necessarily take the first offer to help at face value. If you’re someone who isn’t sure if they have people around them they can trust, you may ask at a church or a library if there are some suggestions. Don’t imagine that you should be paying for help and perhaps don’t ask for help from people who need your money. I admit, plenty of financial exploitation comes from people who don’t need money at all. It seems to be a game of chasing victories in the most disgusting way possible for these people. But we do what we can do.

Obviously, set up a will so that when you pass, you can choose who gets what of your assets or other things. Trust me, your family will appreciate this. It just makes it easier in terms of the court system and in terms of following your wishes. Most of the time your descendants want to do what you would have wanted done. So just give them a road map.