Their secrets have been kept secret long enough!

The way I see it is like this.

There are people pretending to be "gurus" and giving out VERY bad information that is dangerous to your business. Then there is me, someone who's done the hard work, and is actually willing to tell you exactly how to generate insurance leads on a budget with out any fluff or muss!

An insiders look at insurance lead generation

I could never understand why people would pay upwards of $35 per lead when you can easily generate qualified and quality leads using the Internet for under a few dollars and more than not, even free!

In my opinion, the Internet is the best place to generate leads. Here's why:

Sending an email to 1 lead costs the same as sending an email to 1000 leads, which is next to nothing

Your whole lead generation system can be put on autopilot and costs less then a dinner for 2 once a month

Everyday I get asked the same question, "Why should I bother about putting up a website?" and it's a good question. You've probably heard all the horror stories from friends or work associates about how they got ripped off, or it was a waste of time and money, but your story doesn't have to be like that.

Inside this book is ALL you need to get started with your own professional website that sucks in leads everyday.

Here is how I see things going.

You've got a great insurance agency and business is booming but you want to target a certain group of people who would love your offers, but you do not know how to go about it.

You've read about services where you can buy leads from, for up to $35, but you know every man and his dog has the same leads.

So instead of going the same route as everyone else, you decide to give the Internet a shot.

You setup a website and lead system like you've been shown throughout "Insurance in the Internet age" and you do everything as shown.

You then leave for the weekend, and when you get back to the office on Monday, you see that you have over 100 leads interested in the offer you were wanting to get the word out about.

Each of these leads has given you there email address and phone number and they are currently receiving follow up information from you automatically, with the message if they are interested, to call this number.

This system works with any target market. If you want to tap into the auto insurance market, you can. Maybe you want to tap into the home insurance or life insurance market. Well with this system you can!

Insurance Leads Generation. Generate Quality New Leads At A Fraction Of The Cost Of Offline Marketing.

Detailed primer on scams

A comment in my article “Back to Basics” reminded me of something our CFE Team has wanted to do for a long time but other activities simply overwhelm us to forgetfulness.

hi, mr colayco
your posts are truly helpful and i hope many filipino expatriates get to read your articles before they sink their money in any investment. i recently made an investment decision (http:// condoko.blogspot.com/2008/11/cheque-for-4-million-pesos.html) and although i prefer not to entertain any regret at this time, i wish i had learned about your blog and visited it before i made the plunge.

it'd be useful if the government, or better still a reliable non-profit organisation, came up with a list of websites that filipino expats (ofw, as we've come to label them) can visit to learn more about how to make the most out of their earnings. of course, there are a lot of sites that market themselves as the authority on things filipino expats are interested in, but it's better to get a reliable group that helps us identify sites that are really experts at about what they're talking.”

In my book “Wealth Within Your Reach”, there is a detailed primer on SCAMS that actually come from the Securities and Exchange Commission, which I show below.

The Internet is both a boon and a bane. It is a very useful tool for gathering information to help us increase our knowledge and provide blessings. Unfortunately, the same Internet can cause problems and misery. This is the situation when scams are perpetuated through websites.

It is so easy especially for dishonest people to spread wrong information and encourage others to follow their lead. It is so much easier to fall to the glamour and marketing of “get rich quick” schemes than to take the long steady but slow path to accumulating wealth.

But precisely because of the special capability of wrong doers to “sugarcoat” their schemes, it becomes very difficult to realize that a scheme is a scam until much later. This is especially true when the perpetuator is a very renowned and respected person like Bernard Madoff. (http://en.wikipedia.org/wiki/Bernard_Madoff).

It is truly unbelievable that he was able to fool so many people all over the world for such a long time. Many of those he fooled were knowledgeable and reputable people who trusted him completely with almost everything they had. He combined his real professional expertise and good reputation with his evil manipulation of those who could have caught him earlier on.

This example shows that there can be no “fool-proof” way to discover scams that are well crafted. In my mind, the principles to follow are:

1. To surely get rich, follow the slow path. Steady investments in instruments with reasonable returns when left alone to compound will get you to your goal.
   
2. Make sure you periodically review and analyze the entire documentation supporting your investments. Make sure the financial statements are validated by respectable and established third parties. Note that in Maddock’s case, his so-called investment funds were not subject to third-party external audits.
   
3. Study the primer on scams. When an investment looks too good to be true, it is probably not true.
   
4. Spread your risks. No matter how good the investment is, don’t put everything you have in it. The economy has cycles that cannot be controlled. You will have to roll with the punches. For equity investments, only put in money that you can keep invested on a long term basis. In case you are caught on a low cycle, you can wait it out until the cycle improves.
   

The comment of Ravioli suggests that we have a website to inform others of scams. We can add a “Scam Watch” to our website www.colaycofoundation.com. Initially however, we will have to rely on direct inquiries from the public. These inquiries will form the basis for our research and investigation. Eventually, we will publish information about upcoming scams which may already be discovered or perhaps even prosecuted in other countries.

While we can personally advise you of what we consider well-managed companies and individuals, as the case of Madoff clearly shows, everybody has to do their part in researching and following the warnings.

Do not hesitate to write us at info@colaycofoundation.com if you would like a direct reply to your question or comment.

A PRIMER ON SCAMS
Source: Philippine Securities and Exchange Commission (SEC)

How to spot a financial scam

In the past years, so many have lost a huge substantial amount of money to financial scams.

• Will you be the next victim?
  
• Do you know how to spot the clues?
  

It looks real
Scams that catch people often look realistic and are presented professionally. “Scamsters” often go to a lot trouble to:

• print attractive documents and set up a business-like website
  
• choose names that sound like reputable companies
  
• tell a persuasive story using the right jargon
  
• drop the names of people you know to build your trust
  

Five clues for spotting scams

1. Bigger and faster profits than real investments
Scams always offer a higher return than genuine investments. Some offer 20% a year, others go for 300% a year or even more. It's too good to be true. By comparison, Australian shares are some of the most successful investments, and their value has grown about 7-9% p.a. over the long term.

2. Less risk and less effort than real investments
Most scams say that financial success is easy and risk isn't a problem. But real wealth demands planning, hard work and guts. Even the best investors make mistakes and have to weather storms like market busts and economic recessions.

3. Something special that genuine investments don't offer
It could be a 'secret' offer, 'inside information' or 'new techniques'. There's always some feature to make you feel like you've got an edge over other people. But chances are it's a fairytale and it won't have a happy ending.

4. More urgent than the real thing
Every scam gets dressed up as an opportunity, so scamsters often say 'don't miss out' and 'act quickly' to make you hurry 'before it's too late'. They're really just trying to grab your money before you have a chance to check properly.
5. Offered by a stranger
Many scams come from overseas, through unsolicited email or surprise phone calls. Others get sold through ‘wealth creation’ seminars or on the grapevine. While the people can sound genuine, they rarely have any real credentials, such as an Australian Securities & Investment Commission (ASIC) license to give advice or sell financial products.

Ponzi schemes

One of the simplest, yet most effective scams perpetrated on unsuspecting investors for many years have been Ponzi schemes.
In these schemes the promoter promises investors a very high return on their investment and says it is secure.

Part of the money deposited by early investors is then used to pay their first dividend checks or interest. The victims are more than happy to get high dividends. These schemes only require a few people in their early stages to be successful.

The swindler continues paying them dividends for a couple of months until they are more comfortable with their investments, and decide to invest more.

They then begin to urge their friends and relatives to invest as well. Soon, there is a steady flow of funds into the scheme, and the number of investors grows.

If the swindler is disciplined about how much money is left in the account to pay "dividends", the scam can go on for many years. Theoretically, if the scheme continues to draw in new investors, it could go on indefinitely. In practice such schemes usually fall over because the promoter starts to spend the money too quickly, or the pool of investors starts to dry up.

Ponzi schemes

10% per month (120% per year) - Where do you get it?

A family friend was offered an “investment opportunity” returning 10% per month (120% per year) by someone in his church. Fortunately, the friend, who runs a successful mechanics' business, knows a bit about finance and refused.

Sadly, the person who tried to get him interested had already forked out PhP 100,000.

At 10% per month, the rate of return is so suspiciously high that this person will probably lose a great deal of money. It smells like a classic Ponzi scheme.

How Ponzi schemes operate

Let's call the victim Joe Blow. The crooks can pay Joe PhP 10,000 a month using his own money. They can pay Joe for seven months, if they steal only PhP 30,000 of his original PhP 100,000. That way they keep Joe happy and encourage him to recruit other people.

If Joe recruits Joanne Blow for the scheme at PhP 100,000, then the crooks can keep up his payments and give her some money as well. Joe and Joanne will be praising the scheme to the skies, and will be able to show all their friends their blossoming bank statements.

Maybe more people join. So long as the money keeps flowing into the scheme, payments can still come out. However, the burden of future payments also keeps growing. The scheme inevitably collapses once people stop joining.

A Ponzi scheme's cash flow month by month

Here's a worked example, assuming that the swindlers steal only 30% of everyone's money. (We have made them far too kind.)



What's the bottom line?

The scheme runs out of money and collapses with nothing left to pay the investors by the end of December.

Joe, the first to join, got PhP 110,000 over the life of the scheme, which works out at 10% per year, not the 120% promised. The rest of the people all lost money.

David, the last one to join, suffered most. He put in PhP 100,000 and received only PhP 40,000 before the scheme collapsed, so he lost PhP 60,000. And the crooks? They got PhP 180,000 for nothing.

Danger awaits the inexperienced

Your church group may offer you many wonderful things, but it is not the place to hunt around for investments. Fraudsters and operators of unlawful investment schemes sometimes target church groups to find their victims.

Victims tend to be people who do not know much about investing, and so turn to others whom they know and trust. In some cases, church members have innocently encouraged each other to put money into fraudulent or unlawful schemes.

When the schemes collapse, then we see first hand the financial ruin, personal distress and breakdown of relationships among family, friends, neighbors and members of their church.

Pyramid schemes

In a nutshell, pyramid schemes promise to make you money. You pay the person who recruits you for the right to go out and recruit your new members to the scheme. In turn, they must pay you for their right to recruit their own new members.

Pyramid selling involves two payments:

• What you pay
  
  There is an up-front participation payment that new members must pay to join the scheme. Generally this payment will entitle you to some goods or services. However, unlike a normal business deal, you do not get real value for money. The goods or services will be overpriced, and the only way you can recover your up front payment is by getting new recruits to pay you to join the scheme.
  
  
• What gets paid to you
  
  You get a recruitment payment for getting other people to join. This is a substantial part of the reason for joining.
  
  Pyramid selling schemes have involved almost all the goods and services you could possibly imagine. Sometimes they have sold nothing more than the 'right' to recruit other people into the scheme.
  

How schemes build and then collapse

The scheme builds up layer upon layer of recruits, forming a pyramid. Every pyramid collapses.

People give up because they cannot sell enough to recover the money they originally paid to participate. They find it much harder than they think to sell overpriced goods or services, especially to friends and social contacts.

Schemes also inevitably run out of new recruits, although this may take some time to happen.

To show how this occurs, let's assume a tightly controlled scheme where everyone recruits only five people. The founder of the scheme sits at the top of the pyramid. The first five people pay the founder to be able to join.

These five people must now go out and find a second layer of five people each to pay them. By the time you get to the third layer, you need 126 people in the scheme. At the sixth layer, that number jumps to 15,626. Just two more layers, and you've outstripped the population of Canberra with 390,626. One more layer reaches 1.9 million people. If that's when the scheme falls over, then 1.5 million people lose their money.

Pyramid selling is illegal

Trade and Industry laws ban pyramid selling. If a pyramid scheme claims to sell financial products, then it's illegal under Securities & Exchange Commission Rules & Regulations. Financial products include shares, managed funds, superannuation, insurance, and credit.

Is it pyramid selling or marketing?

Sometimes it can be tricky telling the difference between a pyramid scheme and other schemes that may be perfectly legal. Essentially, it boils down to whether recruitment payments form a substantial part of the reason for you to join.

Here are two useful questions to help check if a scheme is legitimate.

• Does your participation payment bear a reasonable relationship to the value of the goods or services that you get under the scheme?
  
  If not, it's probably a pyramid scheme.
  
  Here's an example of how you might spot a pyramid scheme about selling car insurance.
  
  You must pay PhP 1000 up front to participate. That entitles you to a discount of PhP 40 off your PhP 1,500 comprehensive car insurance.
  
  You get promised PhP 100 for recruiting new people to the scheme.
  
  Since the PhP 40 discount goes nowhere near recovering your PhP 1,000 up front payment, you only reason to join would be the recruitment payments. To come out ahead, you must recruit more than nine people into the scheme. This is an illegal pyramid scheme.
  
  
  
• How much does the scheme emphasize the products compared with the recruitment payments?
  
  If recruitments payments get heavily emphasized, it's probably a pyramid scheme.
  
  Here's an example of how you might spot a pyramid scheme about selling shares in a new internet business.
  
  You must pay PhP 1000 up front to participate. That entitles you to 1,000 shares. The shares can only be sold back to the company or to other participants after 12 months. So you don't really have any idea what they may be worth.
  
  You get promised PhP 100 in cash if you immediately recruit new people to the scheme.
  
  You attend a promotional seminar for this scheme. The 90-minute seminar spends 70 minutes on how to recruit new investors and 20 minutes on the internet business. Since your shares are frozen for 12 months, and the scheme obviously pushes recruitment really hard, the recruitment payments form a substantial part of the reason for joining, making this another pyramid scheme.
  

Four safety checks to protect your money

• Take your time before investing your money.
  
  
• Research any investment. Only get involved if you understand the offer.
  
  
• Make sure you're comfortable with the risks, especially if you're borrowing to invest.
  
  
• Get information and advice from reputable people.
  

Avoid seminars that make these claims:

• 'You can become a millionaire in three years'
  
  
• 'Traditional investments are too slow and lack excitement'
  
  
• 'You can turn your financial dreams into reality'
  
  
• 'Amazing, fabulous, unbelievable strategies for building massive wealth'
  

Avoid sales people who:

• Pressure you into investing and/or borrowing money
  
• Promise you high returns with no explanation of risk
  
  
• Promise you access to 'secret' or 'exclusive' techniques for building wealth
  
  
• Lure you with free seminars only to hit you later with high fees
  

Don't get sucked in by:

• glossy brochures
  
  
• over-the-top testimonies from past customers
  
  
• pictures of people punching their hands in the air in triumph
  
  
• pictures of the promoter relaxing on his yacht