Monthly Archives: March 2009

You Have Won The Lottery

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You probably receive an e-mail message very frequently telling you that you have won the lottery.  The message may ask you to confirm your financial coordinates and in some cases even asks for an administration fee to start the payment process.  It is almost certainly part of the celebrated lottery scam and you should delete it as quickly as possible.  Real lottery corporations do not send such messages.  It is usually up to you to claim your prize when you know you bought a ticket and you have selected the right numbers.

What should you do if you really have a winning ticket in a lottery.  If it is a big one, then you should read carefully 8 Tips To Help You Stay Rich After You Win The Lottery

Here are the 8 tips:

  1. Change your phone number
  2. Get Advice Before Taking The Lump Sum
  3. Get The Taxes Out of The Way
  4. Pay Your Debts
  5. Be Patient
  6. Don’t Quit Your Job
  7. Don’t Gamble Your Money Away
  8. Prepare Yourself For Change

You may wish to consult the article for more details, but you will find that most articles offering advice to lottery winners cover the same ground.  Here are two more to confirm that:

Hopefully if you have won a big lottery prize, you will seek advice and prudently consider how to use the proceeds. You have a great opportunity to do good both for yourself and for others.  Enjoy.

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Grandson Scam

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Grandson Scam is the name this time around. The RCMP have shut down a ‘grandson scam’ in west-end Montreal, which operated out of money transfer outlets

RCMP officers yesterday raided 16 Western Union and MoneyGram outlets that were allegedly involved in an international telemarketing scam that touched hundreds of seniors in Canada and the United States.

The fraudster poses as the grandson of the victim and pretends to be in financial trouble in a foreign country. The caller then asks the “grandparent” to send a money transfer, promising to pay the money back upon returning home. Victims were allegedly bilked out of a total of $3.5 million.

1,000 people filed complaints with the RCMP and about 80 per cent had given money as requested. The RCMP warns people against transfering money without knowing for sure who it is going to.

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Your Happiness Plan

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Making Happiness a Part of Your Retirement Plan was a blog post that caught my eye this morning. As Vanessa Chris points out most people’s retirement focus is financial. But money doesn’t buy happiness so you must think of the other dimensions of a fulfilling life. She lists some problems and their solutions.

The Problem: Lack of Preparation
The Solution: Take It Easy Taking It Easy
Avoid a sharp transition from work to retirement if you can. Plan activities to try, with or without family and friends. Don’t count on relaxing for a while, then figuring it out. Especially if you’re cutting your career cold turkey, start something new soon after.
The Problem: Even Busier Than Before
The Solution: Do the Math
Work out realistic timelines, especially if you plan on engaging in many activities at once
The Problem: Declining Health
The Solution: Don’t Plan Too Far Ahead
Make sure you make a genuine, active, thought-about mental distinction between hope and expectation, keeping goals realistic.
The Problem: Sustained Interest and Enjoyment
The Solution: Maintain Perspective, Test, and Diversify
Try not putting all your eggs in one basket. Don’t start too intensive, and allow yourself to enjoy a few avenues for entertainment, stimulation, and productivity. In retirement, there’s no reason why you can’t plan many small things, far from undertaking a big new project or starting a new, heavy venture.

There are more suggestions in the article that are worth reviewing. Alternatively there is a book called Happiness Plan: Simple Steps to a Happier Life.

Finding happiness isn’t easy and life often gets in the way. Happiness doesn’t just happen, people need a clearer vision of attainable happiness, defined in simple terms – people need a plan. This book offers some simple observations about how any individual can be happier, here and now, by choice, self-awareness and practice.

Whichever way works for you, just remember money isn’t everything.

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Bonus Bonanza – Apologies For The Error

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Bonus Bonanza is the most used cliché in the past week and the word bonus is clearly a word to be avoided if a value above $1 million is attached to it.  It will undoubtedly bring with it the eyes of the world assuming inappropriate behavior.

I rarely follow the fire trucks to watch conflagrations but I could not forbear to write this post.  Given the previous post, which showed the amount of stimulus funds going to US senior citizens was less than the amount of bonuses going to AIG executives, I found my data was erroneous.  This was a common error since now apparently AIG documents show a higher total for bonuses.  It seems that bonuses ‘showered like confetti’ according to the Connecticut Attorney General.

Richard Blumenthal, attorney general of Connecticut says he is asking insurance giant American International Group Inc. why documents appear to show the company paid $53 million US more in bonuses to its financial products division than reported earlier.  These documents obtained by a subpoena show AIG paid $218 million US in bonuses to employees in a division blamed for much of the company’s troubles, not $165 million as previously disclosed.

The House of Representatives has now passed legislation to try to recoup the payouts. The measure would slap a 90 per cent tax on any bonuses received in 2009 by top executives at rescued companies.

Seniors’ meals versus AIG bonuses.  It brings to mind the ill-fated Marie-Antoinette at the hands of the citizenry after her suggestion, Let Them Eat Cake.

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US Federal Stimulus Money For Seniors

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The US Federal Stimulus Program is intended to bring the economy out of recession.  That part of it going to seniors provides basic necessities such as meals as well since this sector of the population is hard hit in these belt-tightening times.

In New Jersey,  $2.8 million is going for senior nutrition programs.  


The money is part of $100 million being made available for senior nutrition services nationwide by the U.S. Administration on Aging.  New Jersey’s Senior Nutrition Program currently delivers 6 million meals to 63,000 seniors each year.  Of the 2.8 million in federal funds, two-thirds will go toward nutrition programs. The other third will be spent on home delivered meals for frail elderly persons.

The same is happening in other US states as well.  On Wednesday, word was that Pennsylvania was to get $4 million in federal funding for seniors while $1.5 million for nutrition programs would be released to aid Minnesota seniors.  The money from the Department of Health and Human Services will cover nutrition services at senior centers and community centers, home delivered meals to seniors and Native American nutrition programs.

Vice President Joe Biden said in a statement. “The Recovery Act will help ensure older Americans are not forced to choose between paying bills and buying food.”

The Meals on Wheels program is important to seniors hard hit by the recession. Shrinking budgets and rising transportation costs are making it hard for seniors to get the nutritious meals they need. Such funds will help to prevent drastic cuts to these essential programs.

This is all part of the total $ 1.2 trillion recovery program that the US government has put in place.  It is interesting and somewhat ironic to compare this $100 million for seniors  with the dollar values in the other major news item this week:

AIG Bonuses
The $165 million was payable to executives and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.  AIG reported that it had lost $61.7 billion for the fourth quarter of last year, which is the largest corporate loss in history.

It’s certainly time for change.

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Ponzi Schemes in Ponzi States

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Is Florida a giant Ponzi scheme as Neil Macdonald of the CBC suggested?  Or is it perhaps that The United States is The Largest Ponzi Scheme in the World as Bill Bonner described.

Now Nouriel Roubini of Forbes confirms that view: it is The United States Of Ponzi.

Behold the Madoff in the mirror

Americans lived in a “Made-off” and Ponzi bubble economy for a decade or even longer. Madoff is the mirror of the American economy and of its over-leveraged agents: a house of cards of leverage over leverage by households, financial firms and corporations that has now collapsed in a heap.  When you put zero down on your home, and you thus have no equity in your home, your leverage is literally infinite and you are playing a Ponzi game.

If you are not sure exactly what constitutes a Ponzi scheme, here is how the Security and Exchange Commission (SEC) describes it

“Ponzi” Schemes

Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts.

Decades later, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

As the SEC points out it is a type of Pyramid Scheme.

Pyramid Scheme

In the classic “pyramid” scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.

The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors.

The SEC chart below shows how pyramid schemes can become impossible to sustain.

SEC pyramid

You may ask how does all this relate to what has been happening in the United States of America.  In what sense is that a Ponzi Scheme?  Perhaps the image below can typify what is involved.

ponzi pyramid

The top part of the pyramid is what a company or individual has created in the past in assets.  Often starting with zero, a worthwhile pile has been created.  Everyone assumes that things will continue to grow in the future in the way they have in the past.  People borrow to create the even bigger future that is the base of the pyramid.  The lenders believe the promises and provide the funds to support the growth. 

However just like the Ponzi pyramid there is a limit to growth. The Past was solid, the Future is unknown. They are all dreaming in Technicolor.  Eventually it turns out their pyramid is build on a base of sand.  The whole edifice collapses.  Welcome to the world of Ponzi.

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Seniors’ Home Care Givers Fund In Quebec

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There is a new fund in Quebec to aid seniors’ home caregivers.  Family members who care for the elderly suffering from Alzheimer’s disease will be given additional resources under a $20-million annual fund announced yesterday.  The government has pledged $15 million a year for 10 years, while the André Chagnon family trust will contribute the balance.

It is another reminder of a question that more and more families must face, Who will care for Mom?

A newly released Statistics Canada study on eldercare says that some 2.7 million Canadians aged 45 and over were providing care for elderly family members or friends in 2007, which was up from 2 million in 2002.  Most of these caregivers were women, and more than half of them were working.  Thus, these people need help. 

Professional caregivers can provide support and care to seniors, many of whom are suffering from loneliness, depression and anxiety.  There are an increasing number of companies providing such care:

Home Instead Senior Care
This is an international organization whose professional caregivers go into the homes of seniors to help them with such needs as companionship, meal preparation, light housekeeping, medication reminders, errands, palliative care and shopping.  It has 21 locations across Canada, and employs about 2,500 caregivers from coast to coast
Senior Homecare by Angels
Senior Homecare by Angels is a network of non-medical senior homecare agencies providing Senior Homecare to help elderly and older adults continue to live in their homes throughout North America (rather than moving to nursing homes or assisted living facilities). Caring, experienced home health caregivers provide up to 24 hour care in the comfort of your own home, at affordable rates.  If has over 300 senior homecare agencies throughout the United States and Canada.
At Home Senior Care
At Home Senior Care was established to provide full nursing service and  senior care assistance for seniors who are experiencing difficulties managing their everyday life and require assistance in order to resume life in their personal residences. At Home Senior Care provides professional fully trained and insured caregivers that are capable of handling most all common elder care situations. Respect of individuality, family values and friendship are among some of the key factors we focus on with our services, which currently cover Toronto and Thunder Bay.
ElderSafe Support Services
ElderSafe Support Services, a not-for-profit charitable organization, provides  home health care and support to seniors in both British Columbia and Ontario. From offices in Victoria and Sidney, BC and Oakville ON we now deliver services to Greater Victoria, Mississauga, Oakville, Burlington, Port Hope, Cobourg and Northumberland County.  Our caregivers provide elder care including personal care, companionship, housekeeping, nursing services, post-surgery care, dementia and Alzheimer care, respite care, palliative care, 24 hour assistance, light meal preparation and transportation services.

Through such services, seniors can continue to have their independence longer in the security and comfort of their own homes.

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Unjustified Bonuses Paid By Taxpayers

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AIG bonuses are ‘an outrage’ says President Obama, and he speaks for us all.  How can the senior executives in AIG be so out of touch with reality that they rely on legal niceties to do what is so morally wrong?  Perhaps that lack of judgment and apparent unawareness of how the real world functions explains their appalling track record.  Well they seem to have shot themselves in both feet this time:

Barack Obama is vowing to pursue “every legal avenue” to stop a clutch of top executives at American International Group Inc. from pocketing multimillion-dollar bonuses, including some to employees who designed the risky credit instruments that helped topple the insurance giant.

The U.S. President joined congressional leaders and state regulators on Monday in demanding that the failed insurance giant, which has so far received more than $170-billion (U.S.) in government bailout cash, roll back $165-million in bonuses paid to employees over the weekend.  Outrage was the word of the day as news spread of the payouts, some reportedly as high as $6.5-million.

Not surprisingly, the Bonuses overshadow foreign bank payments, which could have drawn equally violent reactions.

When it emerged on Sunday that foreign banks had received more than $50bn of US federal funds as part of the AIG bail-out, big beneficiaries such as Deutsche Bank and Société Générale must have braced themselves for an outcry in Washington.

Any senior executive of any financial institution should have a keen awareness of what is going on around the world and consider carefully the most appropriate reactions. In the UK, the Financial Services Authority (FSA) will set out a banking clampdown.

Britain’s financial regulator, the FSA,  plans to clamp down on risky mortgage lending and City bonuses in a shake-up of banking rules due this week according to the British Sunday newspapers.

The FSA is planning a crackdown on management bonuses that reward short-term risk taking and will propose new rules on how banks should be run, including forcing them to hold more capital against risky trading, according to the Financial Sunday Express.  The regulator will also table new vetting procedures to ensure bank bosses are qualified to run financial institutions.

This follows up on assertion by the UK Prime Minister, Gordon Brown, that We won’t pay for bankers’ one-way bets.  He laid out a four-point plan to end the excesses of the bonus culture

Everywhere I go in Britain, I sense and share the anger and dismay of millions of hard-working people who have watched in disbelief during a year in which irresponsible practices in global banks have brought the world’s financial system close to collapse.  Only bold action to protect those endangered through no fault of their own will do.

Responsible senior bank executives should not need to have the politicians clamp down on them in this way.  It goes beyond the issue of legality, it is a simple question of morality.  President Obama has a massive popular movement supporting him as he tries to do whatever it takes to re-establish this in the financial world.

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Canada Revenue Agency E-mail Scam

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Given the difficult economic conditions, everyone is eager to get any income tax refund they may be due from the Canada Revenue Agency as quickly as possible.  Knowing that, the scam artists try to phish, or in other words get unwary people to give personal information that will allow them to be defrauded.  That is why last August, the Canada Revenue Agency warned Canadians of a mail scam.


The Canada Revenue Agency (CRA) is warning taxpayers to beware of a recent scam where some Canadians are receiving a letter fraudulently identified as coming from the CRA and asking for personal information. The letter is not from the CRA. A PDF version of the letter is available on the CRA Web site at www.cra.gc.ca/alert.

The letter claims that there is “insufficient information” for the individual’s tax return and that in order to receive any “claims,” they will have to update their records. The letter attaches a form specifically requesting the individual’s personal information in writing, via fax or email, including information on bank accounts and passports. This letter is not from the CRA and Canadians should not provide their personal information to the sender.

All taxpayers should be vigilant when divulging any confidential information to third parties. The CRA has well established practices to protect the confidentiality of taxpayers’ information.

It appears that the scammers have moved online according to a former CRA employee, who warns all to beware of online tax scams.

Robert Day says taxpayers should be wary of the information they’re willing to give up online during tax season. Even though he worked for the Canada Revenue Agency for 30 years, he fell for the scam.

When Day clicked on a link inside an official looking email that appeared to be from the Canada Revenue Agency, it took him to an official looking website that asked for some personal information.  “I don’t know whether I had a short circuit between the earlobes or something,” said Day. “But, I went into this darn site and it had you type in your social insurance number to get into the site.”

If someone with such experience can fall for it, everyone should be doubly cautious when they receive e-mail messages that appear to come from the Canada Revenue Agency.

Today I received the following e-mail message, that purports to come from the Canada Revenue Agency.  However unless some staff members at the CRA have inferior spelling skills, this should not fool too many people.

Canada Revenue Agency scam

Worm Regards, indeed.  It is so ludicrous that one wonders if it is a deliberate spoof.  Nevertheless it can serve to warn all that more insidious e-mail scam messages from the Canada Revenue Agency are making the rounds.  Remember the CRA will not be contacting you this way and nor will the security departments of your bank or your credit card company.

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