Warning: Listening to the Radio Can Cost You

I get many of my ideas on what to write about from local radio shows. On any given day, I can hop in my car, turn on the radio, sit back, listen and learn. And what I've learned is that I can own real estate without market risk, and that I don't have to trade risk for high returns as I can earn a guaranteed 8 percent annualized return.

While I've known for some time that these are paid infomercials, David Migoya of The Denver Post taught me something new - most of these hosts of financial shows have had financial issues themselves.

Denver Radio Hosts
Migoya's outstanding article notes:

The personal backgrounds behind the voices of nearly a dozen financial radio program hosts are littered with little secrets that might give consumers pause before handing over their money.
The individuals, most of them local businessmen, have histories that include personal bankruptcies, federal and state income tax liens, investigations by federal and state regulators, allegations of Ponzi schemes, lawsuits by jilted clients, even the loss of a job because of questionable conduct, according to a Denver Post review of dozens of public records from a variety of agencies.

Migoya runs through 14 different shows, digging into the past of these financial gurus. Some of the findings include:

FINRA consumer complaints
Firing by brokerage firms for violating company policy
IRS tax liens
SEC allegations of fraud
Personal bankruptcy

Handing your money over to these folks would be the equivalent of hiring Michael Vick to take care of your dog while you're on vacation. I'd look elsewhere if I were you.

Behind the financial guru - the financial regulator
I'm betting that most people reading MoneyWatch understand that these are paid infomercials. But you aren't the audience these financial gurus are pitching to. Their target audience is comprised of those consumers who are willing to put on reality blinders and believe the false promises of high returns without risk.

These false promises are made on the airways with the full knowledge of regulators such as the Colorado Division of Insurance, which consistently look the other way.

From what I've found, my home state of Colorado lags other states when it comes to consumer protection on insurance sales, and it might not be as bad where you live. Nonetheless, it's always a good idea to check out the past of your gurus before you give them your money.

Because the only way I know to get wealth without risk is to become one of those radio gurus who prey on the public. In the words of an old saying . . . those who can - do, those who can't - say they can on a radio infomercial.

More on MoneyWatch
A Real Estate Investment without Market Risk - Claims the Radio Guru
My Dog, America's Top Financial Planner
When a Financial Regulator Goes Bad

Allan Roth

Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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