I have never seen

I have been in full time public practice as an accountant for 14 years. In that time I have seen clients invest their time and money into several schemes, with the intention of making fast money. I thought I might share with you a few investments that “I have never seen” make any money.

This list is compiled from my experiences as a tax accountant, it is a sample from my client list of over 1000 clients spanning 14 years.

I have never seen a client make money from Multi Level Marketing (MLM). The best known MLM is Amway, but it comes in all guises, from selling dietary products to every day goods. The form is to have a succession of people under you selling the MLM philosophy and goods. In return you will receive a commission, that commission is subsequently returned to the MLM company as they sell you motivational products and seminars.

I have never seen a client make money from a black box share investment program. A promoter of a black box share scheme will normally ask the investor to purchase software and a training course that could cost up to, if not more than $10,000.  Coupled with that you will be also expected to sign up the share software’s data download plan. The software will follow the market trends and pick the shares to be purchased.

I have never seen a client make money from a tax investment scheme. Emu farms, Tea Tree Oil are just a couple of tax investment schemes. Basically the promoters will sell these schemes on the basis that you will get a tax refund to cover the cost of the initial purchase price. Of all the schemes I have seen, the majority rarely see a couple of years of operation, therefore the investor will not get any returns on the initial outlay. Not getting a return on the investment wasn’t a problem to start with as the Tax Office gave a refund to cover the cost of the scheme. The Tax Office subsequently made changes to the claim process, forcing investors to pay back most of the refunds given.

I have never seen a client make money from a forestry investment. Forestry investments are a tax investment scheme as mentioned above, but somehow have out lasted all the others. The investor buys a wood lot for a nominated value and may receive a tax deduction for the purchase. Through the term of the investment the lots are harvested producing small returns until the final harvest, giving the final payment. Clients have purchased wood lots in the early years of my practice, but all of the companies involved are now no longer in business.

I have never seen a client make money from a Ponzi Scheme. What is a Ponzi Scheme you may ask? Dictionary.com describes as “A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.” The perpetrator of the scheme will induce investors with a high return, the first one I heard about was offering a 50% per annum return, and subsequent schemes I have heard about have had a return well over 20%.

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