Ducking the risk of looking like a goose

Debt Man column – The West Australian (Money)

March 22, 2010.

Bruce Brammall

Debt Man

Maybe it’s karma, or yin and yang. But opportunistic fortune seems headed my way! Yeah, baby!

I feel it, because there’s been a 10-fold increase in the number of foreigners showing an interest in me and my financial security in recent months.

How lucky am I? Two incredible offers hit my inbox in three minutes last week.

One of them was from an old, rich, frail ranch-dwelling English Lady who wants to give me GBP1.8 million. Just because she wants to help out a stranger! And she chose me!? Can you believe it?

Very roughly, that’s $A3 million. Not enough to make me retire instantly, but I reckon I could make it stretch to six months every year in Aruba or Koh Samui.

The other was even more serious bickies. It’s from a Chinese bank official. He’s about to get $US24 million ($A26.4 million) in lost funds from a businessman who became “collateral damage” in the Iraq War. He wants me to claim it as a lost relative of the deceased.

It doesn’t matter that I am not related to the dude. Apparently, says my Chinese banking guardian angel, the money’s as good as mine. How cool is that?

Mrs Debtman and I could retire on that. And we wouldn’t have to sell Debtboy or Debtgirl, or one of my kidneys, to do so.

To collect my near $30 million combined, all I have to do is … drumroll, please … send some money to cover the costs of delivery of my fat cheques.

Nigerian letter scams, also known as “advance fee frauds”, have morphed in the email era. They can contact you directly from anywhere in the world. And they can suggest you transfer your money electronically.

Scams from Nigeria, China or English aristocracy living on a “Ranch” (seriously, an English capital l “Lady” living on a ranch?) are a guaranteed way to blow up money.

Sure, they’ve only asked me for a few hundred dollars. Then they might ask for a little bit more to cover unexpected fees and bribes. Once you’ve lost a bit, you’re hooked. If you just make one more payment, maybe you’ll get your pot of gold.

According to the ASIC, $5 billion has been lost worldwide to these frauds. (For more information on these scams, go to www.fido.gov.au ).

Obviously, if you get one of these letters offering some version of “money for nothin” (small Dire Straits cameo), hit delete. Okay, dream for a second, then delete.

Nigerian letter scams are double-D’oh! stupidity because you can’t even claim the “loss” as a tax deduction. Donate it to an Australian charity, or lose it in a fair dinkum investment, and you’ll at least get some back through tax.

Here’s a couple of highly selective facts. (1) Australia is 2 per cent of the world’s economy (therefore, 98 per cent of opportunities lie offshore). (2) Australia’s dollar is historically high. (3) I love property.

Personally, if I’m going to throw some dough at an international “investment” with the potential for losing the lot, I’d like to go down fighting, rather than just meekly and embarrassingly handing it over to a fraudster. Which is why I find this whole American property market thing somewhat irresistible.

For a start, US property is responsible for the whole Global Financial Crisis. In the words of Basil Fawlty, “You started it!” is something we have a right to say to any passing US citizen, should they moan about anything economic (particularly their dollar).

America’s property market is the polar opposite of Australia’s. Properties in major cities are trading hands for what we’d consider to be a deposit.

For Australians who are interested, the US property offers are now almost ubiquitous.

It’s becoming scarily easy to do. Local firms are taking Australians on tours to the US. American property agents, as you’d expect, are flying in to do the reverse.

The opportunity itself – buying US residential real estate – is not a Nigerian property scam. (But that doesn’t mean that scams won’t spring up around it.)

I’ve done nothing. I’m unlikely to. Understand that the offers now being touted, or to be flogged in the near future, are highly speculative.

There might be some serious money to be made. But understand you could lose the lot. And feel like a goose.

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au .