Skeptic Money

Watch this video from BBC show “That Mitchell and Webb Look” and find out!

NOTE:  This post is part of an ongoing education series.  This information is for educational purposes only.  This information does not constitute investment advice.  No rational person would make investment decisions based on a blog post.  Please consult with your financial advisor before taking any action.  If you think it is OK to make investment decisions based on a blog post, then for the love of the FSM – Stop reading my blog.

Below is a description of an investment product.  This is based on real and available products but does not represent any specific product.  Numbers below are estimates and are only intended to show how this product works.

The Pitch.

There is a new product it is a combination of the best of bonds and the stock market.  It is a guaranteed mutual fund.  Part of the money is invested in an index fund and some is invested in Zero-coupon bonds issued by the US Government – AAA Grade.  You get the benefit of the stocks and bonds.  The best part of all is that in the next 10 years, you are guaranteed a 40% return.  That’s like getting 4% each and every year.  That’s right you will make at least 40% return on your investment and you have the unlimited potential to make more if the stock market goes up.  Just sign here and give me $100!

The Reality.

Now for all of the details that the sales person did not tell you about.  The odd thing is that they did not need to tell you verbally because all of the details are in the prospectus – 72 pages of 6 point font written in the best legalese.  You signed a form that said you read it.  Now they can do almost anything to you.  You thought if you invested $100 you would have $140 in 10 years.  Now we will get the details.

10 years – You will want to keep this investment for 10 years because if you sell it early you have to pay a 10% penalty.  Whoops… did we forget to tell you that.

4% per year - Actually it is closer to 3.3% per year compounded but hey it’s only money.

The Load - oh…  did we forget to tell you there is an 8% load.  A load is a sales fee that is collected from you and paid to the sales person.  8% is on the high side for mutual funds but, this is a really good investment so it is a small fee to pay.  The $140 after 10 years was based on an investment of $100 you only invested $92 ($8 covers the load).  You do not make $40 but $37 (remember you only invested $92).  So when it’s all done you have $129 – still really good.

Annual expense ratio – We told you the 40% return is guaranteed – and it is.  So is the annual expense ratio.  This is to cover the cost to the company that manages you money – and they deserve it for getting you such a great product.  The fee is just 1.8% per year.  Just above the industry average but your worth it.  Total cost is just $18 over ten years.  Your total return is still $111 that’s great.

Insurance – Your money is guaranteed, it’s a kind of insurance.  You pay for auto and home insurance – of course you have to pay a little something for this insurance.  The cost is just 1.5% per year.  Total over 10 years is about $15.  Your total return is $96 – isn’t this, a wonderful investment.

Taxes – The IRS does not want to wait and tax you on all the money you are going to make with the Zero Coupon Bonds.   So they created a thing called imputed interest.  They collect tax on the money you are going to get.  Don’t think that you lost money.  You did not!  You made money but agreed to a lot of high expenses.  That’s your problem not the IRS’s.  So…. ya gotta pay the tax.  I will call it $6.  So now your awesome investment of $100 after ten years is now worth around $90.

Who wants to buy now?

Job Description….

Come work for the church of Scientology.  We offer job security with a billion year contract.  Great pay of around $50 per week.  Long hours and sleep deprivation so you don’t get tempted to think for yourself.  Plus you get to feel the love of lord Xenu.

New York Times story of people leaving the church of scientology.  A couple spent 13 years of slave labor for the Church.  When they tried to get out – things got worse.

“Why did we work so hard for this organization,” Ms. Collbran said, “and why did it feel so wrong in the end? We just didn’t understand.”

Not only does scientology employ slave labor they also beat people that get out of line and hold people in prison if they express a desire to leave.  The church says that the former members are lying.  Well… we know that religious organizations never lie.

The church stays alive on this slave labor and huge funds from movie stars.  Recently, some stars have started to leave.  The winner of an Oscar for “Million Dollar Baby”, Paul Haggis left after 35 years in the sea org.  You can read his resignation letter here.

But I reached a point several weeks ago where I no longer knew what to think. You had allowed our name to be allied with the worst elements of the Christian Right. In order to contain a potential “PR flap” you allowed our sponsorship of Proposition 8 to stand. Despite all the church’s words about promoting freedom and human rights, its name is now in the public record alongside those who promote bigotry and intolerance, homophobia and fear.

And this part on the policy of disconnection….

I was online doing research and chanced upon an interview clip with you on CNN. The interview lasted maybe ten minutes – it was just you and the newscaster. And in it I saw you deny the church’s policy of disconnection. You said straight-out there was no such policy, that it did not exist.

I was shocked. We all know this policy exists. I didn’t have to search for verification – I didn’t have to look any further than my own home.

You might recall that my wife was ordered to disconnect from her parents because of something absolutely trivial they supposedly did twenty-five years ago when they resigned from the church. This is a lovely retired couple, never said a negative word about Scientology to me or anyone else I know – hardly raving maniacs or enemies of the church. In fact it was they who introduced my wife to Scientology.

Although it caused her terrible personal pain, my wife broke off all contact with them. I refused to do so. I’ve never been good at following orders, especially when I find them morally reprehensible.

For a year and a half, despite her protestations, my wife did not speak to her parents and they had limited access to their grandchild. It was a terrible time.

The church of scientology claims to have millions of members but the American Religious Identification Survey show membership has dropped from 55,000 in 2001 to 25,000 in 2008.

How do you get out?

If you want to leave they make your life hell and they have you do special auditing sessions to convince you to stay.  If you just up and leave you are an SP.  That is a suppressive person.  No one is allowed to talk to you.  You can lose all of your friends and family in the blink of any eye.

Mr. Davis, the church’s current spokesman, said Scientologists are no different from Mormons, Catholics, Jehovah’s Witnesses and Amish who practice shunning or excommunication.

That is true – and they are all WRONG!  This is just a mind game and we should not allow any group to do it.

tip to Janet.

I know it’s not a surprise but home school text book do not promote real science.  There are more home school students every year.  I’m sure there are many great parents that to a good job teaching their kids at home.  However, many parents are doing a disservice to their children.  Here is what one book company had to say about their science text….

“Those who do not believe that the Bible is the inspired, inerrant Word of God will find many points in this book puzzling,” says the introduction to “Biology: Third Edition” from Bob Jones University Press. “This book was not written for them.”

Whoa….  That’s kinda…. ok really scary.  So about 80% of the world can’t learn real science?  I loved the response from Jerry Coyne….

I feel fairly strongly about this. These books are promulgating lies to kids

He was too kind.  The only chance these kids have is moving out or sneaking onto the internet while their parents are at church.

Hement Mehta will speak on the University of Illinois campus on March 12th at 7 pm!

The talk will be in 100 Noyes Lab on the campus of the University of Illinois.

tip to skepchicks

can someone explain this to me?  I don’t get it.

Skepchicamp Chicago was held on March 6th 2010.

I was a little worried that we were going to put as many as 75 people in a small pub in Chicago.  However, it was AWSEOME!  Skepchick Elyse with help from The Skeptical Teacher and lots of helpers put on a show that was amazing.  Here is a list of the speakers. 

I did a presentation on investment ripoffs.  I even got The Friendly Atheist to help me with some math.

Each speaker had about 20 minutes to talk and 5 minutes for questions.  Each speaker was fantastic and the 20 minute limit kept the talks focused!  This was almost as good as a day at TAM.  One of the speakers – Action Skeptics was also live blogging the event.  He lost connection so the whole event is not posted yet – but go check it out.

As soon as a date is set for next year – you should make a spot on your calendar.  This is well worth the time.