Friday, 7 June 2013

How to save money

We all want to save money but the bad news is that saving money is a bit like losing weight. There are NO miracle products or solutions. The ONLY way to lose weight is to consume less energy than you use. Consume more than you use and your prehistoric body will store some of the excess for the next time there’s a drought and you can’t catch any impala. Consumer less than you use and your body will use that excess and off will come the weight.

It’s exactly the same with money. If you can’t increase your income dramatically, you have to reduce your expenditure to save money.

It’s not always easy but here are some tips. Tips that really might save you some money.

Don’t invest in Ponzi schemes, pyramid schemes or anything related to foreign exchange. An “opportunitiy” to make “huge profits” from an investment scheme is ALWAYS a scam. It’s always a lie designed to part you from what little money you have. We now know about Eurextrade, the Ponzi scheme that collapsed a few months ago, the scheme that stole money from hundreds, if not thousands of people in Botswana. We also know that many people we know, our neighbours, friends and colleagues were part of it. They were the ones doing the recruitment into the scam on the promise of a percentage of whatever they conned from future victims.

The bizarre thing is that only last week I heard that despite Eurextrade having collapsed, some of its recruits are still going around trying to recruit others. I can only assume that they are desperately trying to recover some of the money they lost by stealing it from other people.

More recently even the payment mechanism used by Eurextrade, Liberty Reserve, stopped operating. It was shut down by US authorities who said that “Liberty Reserve was intentionally created and structured to facilitate criminal activity”, presumably like Eurextrade but also for a range of other money-laundering activities. They reckon that over $6 billion had gone through Liberty Reserve’s coffers.

Unfortunately these schemes are constantly reincarnating. As one dies, another emerges. At the moment people are asking me about a foreign exchange scheme called XForex. This is slightly different, it does actually seem to be a legitimate mechanism, but makes promises that are absurd. The first thing to mention is that ordinary people like you and me don’t make money by trading foreign exchange. The market is so volatile, the changes usually so slight and the companies like XForex so suspicious that we’re not going to make a fortune, if anything from it. Think of it this way. If big commercial banks don’t make fortunes this way with the trillions they have to invest, how can mere mortals like us? The only people making money from Forex trading are the people running the companies encouraging us to do so.

You can also judge these schemes by the way they recruit new victims. Eurextrade snared people by accosting them on the streets and in spicy chicken restaurants, XForex do it on Facebook by making extravagant claims. One advert on Facebook showed a room full of hundreds of scattered banknotes and announced that “Mr.Baruti From Botswana Has Made $5024 From EUR/USD Trading Last Month!”

It went on to say that “It Is So Easy To Make A Second Income! Take Your First Step In To a Wealthier Future!”

You can tell this is a scam, can’t you?

It’s the same with schemes like Three Link Connection. You can tell they’re crooked. This is still operating I’m told, but has now reached the stage where they are constantly fending off the demands of their victims for the return of their money. Apparently they’ve even suggested that the only way for them to get their original “investment back is, yes, you’ve guessed it, to hand over more money.

Another way to save money is not to fall for the imported car silliness. Buying a car online from a far-flung foreign country is NOT a cheaper way to buy a car than buying one here. It’s simply not cheaper. Once you include the costs of actually getting the car from the UK or Singapore all the way to Botswana, all the taxes, duties and fees, all the storage costs they often include you get to almost the same price as an identical car here or in South Africa. If not more. Then you add in the additional costs for parts when you later service the car, always assuming that you can get it serviced. I know dealers here who now refuse to service imported cars of the brands they sell because either the cars have been “clocked” by having their mileage adjusted or the inconvenience of finding parts for cars built for other parts of the world is so high.

Then there’s the other two critical “costs”. Who in their right mind would buy a car they’ve never test-driven? That’s The Number One Rule Of Buying A Second Hand Car. Test drive the car before you sign anything. Then go home and think about it. Then get your friend the mechanic to test-drive it as well. This is obviously impossible if the car you want is on the far side of the planet.

The final “cost” is the sort of people who often run these import businesses. Business like Westridge Holdings, who represent Trans Africa Vehicle Exports who, as I’ve mentioned before, lie, take people’s money without delivering cars and, if you’re lucky, just deliver the wrong type of car and make you wait forever for a refund. The same company who, according to another newspaper, has had it’s owner arrested on suspicion of fraud.

You can save a lot of money by simply not giving it to a companies like these.

1 comment:

Kasey Chang said...

Here's the real origin of that picture