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On the

Lighter Side

Al Jacobs invites you to take a break from the serious stuff and digress with a bit of diversion.  This month it's a short short story, which takes me back to my days as a deck seaman on a navy destroyer in the Pacific.  I'll not admit to there being any autobiographical inferences.



Explore with us here the many aspects of prosperity: spending, saving, investing, giving and receiving, health, education, and overall well-being.
                                          – Al Jacobs


Straight Talk from Al Jacobs




The latest exposé to hit the circuit is the “pension advance” scheme, by which military veterans and retirees are induced, through high-pressure selling, to take cash advances secured by their retirement income.  The pitch is enticing: “Eliminate debt!  Launch a business!  Take your dream vacation!”


These advances are inherently payday loans which carry hefty charges.  A typical transaction might provide an up-front advance of $40,000, for which the borrower will pay back $1,015 monthly—often the entire pension check—for ten years.  Such borrowing works out to a per annum interest rate of about 27%.  The firms involved in these outrages maintain they’re not violating usury laws because they are not making “loans.”  Rather, they claim these are “purchase/sale agreements,” or “income stream buyouts,” or some other euphemism.  What they won’t call them is what they really are: “rip-offs.”


How is it that reasonably sensible persons can be ensnared by such trickery?  Part of the answer may be simple human naïveté.  However, note another commonality: the prevalence of offerings in which the elderly are targeted.  Two other such devices, reverse mortgages and variable annuities, which are equally directed at seniors, both contain the same components: hidden fees, buried commissions, and devious sales techniques.


I have no profound moral to present.  The only conclusion I will offer is the memorable line of financial columnist Al Lewis, creator of Al’s Emporium: “Wherever there’s money, there’s someone trying to steal it.”


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