When I read this article, some massive bells went off in my head.
A company called Beam Financial has been preying on millennials for awhile now. The first thing that rang alarm bells off in my head was the fact they promised an interest rate that seems reasonable, but is in fact probably unattainable in real life of 7%.
I checked my 401k, and it gives me a rate or return of 6.98%…these criminals are smooth.
Reading through the article, I discovered something else: people aren’t being allowed to withdraw their money, and it’s supposedly a simple savings accojnt.
Let me read between the lines for you: they are using incoming money to pay for the interest due on the money already invested. I expect in a few months, this house of cards is going to come crashing down faster than those bitcoin mining operations that were being advertised a few years ago (I never invested in those either because I knew they were absolute scams as well).
Lesson: if it sounds too good to be true, it probably is. Do not invest, stay far far away. If you are invested, call your attorney generals office asap as that might be the only way you will get any money back at all (this isn’t even FDIC insured, yikes).
Expecting 7% from anything should have been a huge red flag. Should serve as a learning opportunity for the people who got suckered. I’m sure they can find some boomer to blame.
Usually the returns are at astronomical rates. The ROI Beam Financial is promising actually looks reasonable, until you compare it with your run of the mill 401k and realize it’s not possible to get even that high of a ROI anymore.
A Ponzi scheme is illegal. What Beam does is perfectly legal. The market will regulate it away when everybody loses their shirt, feel like they got ripped off but that’s just the invisible hand of the free market when it turns into a fist.
