Podcast – Episode 024 – Beware the $30k Scam – 24

Podcast Transcript

Hello, hello, hello, and welcome back to another episode of The Option Genius Podcast, so grateful to have you here. Today’s episode is going to ruffle some feathers. I hope it doesn’t ruffle your feathers, but I know that some people out there will not appreciate what I have to say because it’s going to hurt them in their pockets, but I think it needs to be said. I think when you hear what I have to say, you’re going to agree with me, because I guess when it comes to finance and how to make money and ways to make money … I mean, there’s a million ways to make money, right? Even in just trading, there are thousands and thousands of different ways to trade, and you can do well in all of them, depending if you have the right plan, if you have the right resources and all that, but let’s say if there’s a thousand different ways to trade, there’s going to be 20,000 different people out there trying to get money from you to teach you to trade and to give you the secrets of trading. That’s what this episode is all about.

I call it Beware of the $30,000 Scam, because there’s a lot of scams out there, and I still remember when I first learned about options, so many years ago. My father, who is an infomercial and a get-rich-quick junkie, had gone to some free, two-hour options seminar in some hotel. You might have seen these commercials on TV, where they come to your town, and they have different hotels where they have two-hour free seminars where they teach you how to get rich with options. They’re supposed to teach you how to get rich with options, but instead, it’s basically a sales pitch for a much high-priced seminar.

He went to this two-hour thing, and he came home $5000 lighter, because he spent it on a seminar that they were doing that weekend. Lucky enough for me, he was allowed to bring someone along, and so I got drafted. It wasn’t really a choice. You know, I guess that’s one of the benefits of being an only child.

We went to the seminar. We were excited. I was like, “Okay, this might work. We might make some money out of it. Hopefully it’s good.” A lot of the stuff that they talked about was really cool, first time ever hearing about puts and calls and all this different terminology, and it was exciting. I mean, they taught us what a chart was. They taught us what an indicator was, that you could make money in stocks and options by just reading and doing what the indicators told you to do. I mean, I was like, “Whoa, this is so simple. Holy cow!”

When you get three green arrows, that means that three indicators are all bullish, and you buy. It was that simple. You get three green arrows on their software, you buy, and then you hold it until you get three red arrows, meaning that all three of the indicators were bearish. I mean, that’s pretty easy, right? Heck, yeah, we were going to make millions. That’s all we had to do, just look at the charts, and keep looking at different charts until you see three green arrows. That’s the stock you buy, or options, you call options on that, and then you get out when you get the three red arrows. That’s all you have to do.

My father and I fell for it, hook, line, and sinker. I mean, “Great job, Dad! Awesome! Whoo-hoo! That’s the best $5000 you ever spent! All right, we’re going to make millions!” Now, I didn’t have any money at that time, because I was still, I don’t remember how old. I was pretty young, but my dad … He’s the get-rich-quick junkie, so he’s been to these type of seminars before, and unfortunately, he brought all the credit cards with him that still had some balances on them. Now, I wish he had not done that, but he did. He brought them, and so he spent more money at the seminar. He bought some software. He bought some video courses that they had. They had other stuff, other seminars you could take. I don’t remember exactly what package he bought, but it wasn’t until the second day that the instructors really laid it on us.

I mean, that was when the pitch for coaching really got started. They kept telling us over and over again that if you really wanted to be good at training, you couldn’t learn it in a two-day seminar. They can give you some basics. They can give you some stuff to go home and try, but if you really, really wanted to get good at trading, then you would have to have a coach work with you, one-to-one basis, because then the coach could tell you what you did right, what you did wrong, give you some ideas, let you look over their shoulder. For that reason, you’ve got to have a coach, right?

All the greatest athletes, Michael Jordan, Tiger Woods, all these guys, they have coaches, right? Yeah, so you need a coach, too, because that’s where they taught the really good stuff. In the seminar they couldn’t teach you everything, but all the top secret stuff … That’s what was taught in the coaching program.

What was the cost of this amazing, wonderful, super, can’t-live-without coaching program? Well, they were going to give us a great deal. They were, because we were they’re real good customers. We had spent two days with them. They were our friends now. We were talking to them during the break and everything. We were telling stories, and laughing at their jokes, so they had to give us a great deal, right?

They were only going to charge us $30,000 for six months of coaching, but we had to act quickly, because they only had a limited number of spots, right? They couldn’t take everybody, because their time was limited. There were four instructors there that weekend, and so we could pick whichever one we wanted as our coach and go in the back room, pay the $30,000, and then they would set you up with one of the coaches.

I was like, wow! Whew! Can you believe that? For just the price of a car, you can get coached by a real trader, a real trader that’s making money in the markets. At that point, it didn’t dawn on me that this real trader, if he was doing so well, why the heck was he pitching coaching in seminars on the weekend? Why was he flying halfway around the country every weekend to do this seminar to pitch coaching.

At that point it didn’t dawn on me. It later did, but thank God my dad did not have the $30,000. Oh, my God, I can’t imagine what would’ve happened if he did. I mean, after spending all his money on the seminar, which, basically, all the stuff that they taught us was basic introduction to options trading stuff. The software they gave us, the home study course. Luckily my dad didn’t have any money left to trade. I mean, that’s the funny part about it. We spent $5000 on the seminar. We spent several thousand more dollars on the software and the video and whatever else there was. At the end, there was no money left to trade, so we didn’t get the $30,000 coaching program, thank God, but we couldn’t really use the stuff that we learned anyway, to see if it was actually good or not.

I did make friends at the event, okay? I mean, I talked to everybody. Unfortunately, most of the people in these types of events are elderly. They’re older. They’re in their 50s, their 60s, some in their 70s. Some of these people are desperate. They’re grasping for straws. They know that money’s going to run out before they do, before life runs out, and they’re going to be destitute. They don’t want that, so they want to do something. Those are the type of people that these guys really prey on, but I did make friends with some people at the event. I stayed in touch with them. I made sure to stay in touch with the people who actually bought the coaching, because I wanted to know what they got out of the coaching and what was in it. Maybe they could share some stuff with me, so I could learn, as well.

Out of the six people that I met that had bought the coaching, none of them were happy with it. None of them had made any money on their trading. They had all felt that the coaching was very overpriced. It wasn’t worth it, and they all wished that they hadn’t done it.

Now, I don’t want to give you the name of the company, because the guy that was running that company, he disappeared for a while. He was off the radar. You didn’t hear about him, but he’s back, and that’s one of the reasons I’m doing this podcast, because this fellow is back. He has another options education company. He’s back at the same shenanigans. I mean, he made a lot of money. He got a lot of people to pay him money. He wasn’t even the one doing the coaching. He wasn’t even the one doing the seminars. He had people that he would pay to go around the country, do these weekend seminars, and just make money for him, but he’s back. I saw him on CNBC just the other day, talking about his expertise and how good of an options trader he is, and how good of a trader he is, and how he can teach people all the ins and outs and whatnot. Just be careful. Be aware of what’s out there.

You might not even believe this, but … This is embarrassing, but this was not the only $5000 seminar my dad forced me to go to, when it comes to options trading. This was the first one, but then we went to another one. We did the same thing again. He went to a two-hour thing, and then he paid the $5000, because it was for a different company, and they talk about different things.

My dad was like, “Well, we went to the first thing and we learned. Now we’ll go here and we’ll learn more.” This company, they had a pitch where it was a lifetime thing, so you pay for the seminar the first time, and then every other time that they come back to your city, you can come in and do the course again for free. That was the main reason that my dad bought. Actually, he did not force me to go to this second seminar. I went to make sure that he didn’t buy anything else. That was my goal.

The first goal … The first time I went to the seminar, my goal was to learn and to figure out all this trading stuff. The second time it was to make sure he didn’t buy anything else, right? I did make use of the materials. I did study them, the coursework. I used the software to simulate trades, to try back-testing the different strategies, some of the things that they talked about in the seminar. I tried back-testing those, and I couldn’t get the same results, for whatever reason. I still have the material at home in binders, but you know what? I could’ve learned the same stuff at the library, just like the first seminar, in the most basic of options books.

If you go to the library, you find a book on how to trade options, everything in there was covered in that seminar. Actually, the book probably has more stuff, because in the seminar, what they do is they … If you haven’t been to one of these, they’ll teach you for about 20 minutes. Then, they’ll pitch you for about 15 minutes, and then they’ll take a break for the rest of the hour. They just keep doing that every hour. Then they have a one and a half hour lunch break, and they might start late, whatnot, but really, you don’t get your money’s worth.

I have all this material, right? I don’t know if it’s correct or not, but I’m assuming that it’s correct, because these traders and these instructors said that this is how you do it, and these guys are … They claim to be professional traders. They do it day in, day out. That’s how they make their money. They were impressive. They were using industry jargon and language that I didn’t know about, so it feels like, “Okay, this guy knows more than me. I should take a listen to this guy. He probably knows what he’s talking about.”

I didn’t know it at the time, but they made me what I call option dangerous, okay? Now, this is one of the levels on the option continuum. If you’ve never heard of the option continuum, I urge you to listen to episode 21 of this podcast to find out what level of the continuum that you are on right now, and how to advance to the next level. Basically, the continuum is a scale from one to 10, and each level has a different name. It’ll tell you where you are, based on how much you know and how well you are doing as a trader. It’ll tell you what you need to do to get to the next level, because once you know where you are, that’s your baseline. From then on, you can advance.

I was option dangerous. Basically, that means that I had the information to give me confidence, and I had a system that I thought worked, okay? Now, I didn’t know if it worked, but I had confidence, and I had a system. It’s like, “Okay, I’m going to do this, and I’m going to do it this way, and I’m going to make all this money.” Basically, I was dangerous to my own account. That’s what it means, right? You are dangerous to your own account. You got some information somewhere. You got some education somewhere, that is very basic and incomplete, but you don’t know that, right? You don’t know what you don’t know at this point, so you try to use it, but it just doesn’t work, and you end up losing money.

That’s normal. That happens to every single person in the options world. What you do is you either blame yourself, or you give up and you lose the dream. This is one of the most dangerous, or the most critical levels of the option continuum, because this is where a lot of people drop out. They’ve tried it. They got some information. They have some confidence. They’re thinking, “Okay, I can do this. It doesn’t seem very complicated. This guy, he knows what he’s doing. I watched a video on YouTube. I went to a seminar. I read a book. This guy did a free webinar,” or whatever. Maybe you even had to pay for it. Maybe you bought a course.

We get emails all the time, like, “Oh, yeah, I bought this $97 course on line, and it taught me how to do this and this.” Okay, well great. When you blow up your account, come back. Let me know how it goes, because at that point you are option dangerous. You don’t know what you don’t know, and so you take whatever you learn as Gospel, and you try it, and most likely, 99% of the time, you’re going to lose money. It’s sad, but that’s the way it works. It’s up to you.

You might be in the shoes right now, or you might’ve been in the shoes in the past, but you come to a decision point where, okay, you know what? Either you decide, oh, man, this stuff doesn’t work; I’m giving up; I’m going back to my job; I’m going to go try something else; I’m going to go ahead and buy fix-and-flip real estate, whatever, or you blame yourself. Oh, man, this didn’t work for me. Oh, man, what am I doing wrong? I’ve got to figure this out. You double down, and you try to learn more. You try to invest more. You buy some other courses. You try different strategies, and you keep … You’re still on the option trading path, but you’re looking at other things.

If you give up, then there’s nothing we can do for you, all right? That’s it. You’re done. You gave up. You lost confidence. If you keep on the path, then you can move up to level six, level seven, level eight, eventually level nine and ten, where you’re making a decent amount of money.

That’s where I was. I was in option dangerous mode. I had the confidence and a system that I worked, so that years later … At that point, I didn’t have the money, but years later I actually did have some money, and I tried my hand at options, just the way they taught it, just the way they said to do it, and I proceeded to lose my shirt. I proceeded to lose my shirt because, again, I didn’t know what I didn’t know.

If you’re in that mode right now, don’t give up just yet, okay? Options do work, because I got over that hump. I figured it out eventually, and now I’m living the dream. Options do work if you have the right information and training. Now, that’s the tricky part, because these people were telling me, and I think that’s part of their model, the seminar model, where you go and you pay $5000 for the seminar, you buy other courses and whatnot, when you try it you lose money, and then you go back to them, because they keep emailing you. They keep calling you. They keep saying, “Oh, we have this new thing. We have this new thing. We have this new seminar,” because they want you to keep coming back and giving them more and more and more money.

It’s not like, “Okay, here’s everything you need, A to Z, without fail. If you just do this, you’ll be successful. We haven’t left anything out. One price, one low price that everybody can afford; take it, go with it, and do it,” right? Then, you have all the information. You have everything you need. If you actually want somebody to walk you through it, maybe there’s a coach. Maybe there’s a little bit more money involved for a coach, maybe not $30,000 for six months, but some small amount where the coach can be compensated for his time, because he’s worth it. That’s not what their model was.

I mean, I get it. Learning to trade can be hard. There are a lot of things to know, and a coach can seriously cut the learning curve. It can. A coach can do that, but $30,000 for six months, really? I mean, come on folks. You guys have got to be smart, okay? Stop being so damn gullible. Stop being a mark. I mean, if somebody is out there, he’s going to coach you, but the only money that they’ve actually made is by coaching others, you’ve got to walk away from that, all right?

Anybody can say, “Oh, I’m a trader.” Prove it to me. Back it up. Let’s see some results. If somebody is retired from trading, then you must walk away, because trading today in this market is different from somebody who was trading five years ago, 10 years ago, 20 years ago.

In the past, they had what was called floor traders, right? These were guys that would work on the floor of the New York Stock Exchange or the Chicago Board of Options, where all the trading takes place, or it used to take place. People were on the floor. They were there every day, and they were traders. They were buying and selling contracts and options and stocks and whatnot. They were very, very good at their jobs, and they made good money, but eventually, all that stuff now has gone electronic. It’s all computers, and so all of these people were laid off, right? They’re all gone. Those jobs are not there anymore.

You have these guys who spent years trading, and if you look at CNBC, if you look at Fox Business News, a lot of the people that they bring on as interviews or experts … It says on the bottom, “former floor trader,” or, “former trader,” or, “former executive,” former this, former that. If you’re former, and you’re not doing it anymore with lots of money, and if you’re just teaching, if you’re just educating people, you’ve lost your edge. You’re not in it every day. Your money’s not at risk anymore. There’s a lot of people out there that are doing that right now, and so just be careful of that.

If the person that you’re looking to hire, or looking to look at as a coach, is taking pictures and showing off how rich they are in front of a private plane or a mansion, having all these cheesy cars, Lamborghinis and Ferraris, or they claim that they make hundreds of millions of dollars, and nobody’s ever heard of them before, you know you’ve got to walk away from that. I mean, there is one guy … If you’ve been around or if you’re in this market, if you’re looking for information on options, you’ve probably seen his ads, probably seen his website, where he says he showed up to this country with $8, and he made hundreds of millions of dollars. Yet, nobody has ever heard of this guy before.

I mean, if you go to Forbes Magazine or Wall Street Journal, and you look at, “Okay, anybody ever hear of this guy five years ago, 10 years ago, 20 years ago?” No. Well, how do you make hundreds of millions of dollars, and nobody’s ever heard your name? Give me a break, right? Give me a break, because anybody can go to Airbnb and rent a mansion to make a video. Anybody can go and rent a Ferrari and take pictures. You can hire models in bikinis to stand next to you. It’s all been done before, and people are going to keep doing it, so don’t let that stuff influence your decision.

Before you join anything, ask questions, lots of questions. Then, here’s what you do. For the first one or two people who resonate with you, people who have a proven, repeatable track record, people you trust, those are the ones that you go forward with, because coaching is good. Coaching can help you, definitely. If you find somebody that seems honest, that has people that you can correspond with, people that are live … For example, we have our Blank Check Trading Course, which is how to trade oil options. When we’re talking about the course, we have lots of different testimonials. This person said this, and this person said this, and this person said this.

That’s all great, but it’s … We actually have it where we have a live, private Facebook group, so if you join our course, you can actually talk to the people in the testimonials. It doesn’t just say on our website that Joe S. from who-knows-where, some small, rinky-dinky town, says that this guy, Allen, is the best option trader in the whole world, and I made $20 million listening to him. Well, who the heck is Joe S.? How do we verify that? If you’re looking at a website, and they don’t even have last names of testimonials, of success stories, that’s got to send off alarm bells. Just be careful, all right?

If you want me to coach you, I’d be honored. I don’t have personal coaching, and so I don’t have a dog in this hunt. I’m not really worried about it. I don’t have a $30,000 coaching program. I don’t think I’m ever going to have a $30,000 coaching program for six months by itself. I mean, if it’s going to be $30,000, you can be sure … I might come live with you, because you’re going to have to get a lot of value out of it, right? I’d be honored, and I’m going to continue to serve in the best of my ability.

If it’s somebody else, that’s great. If you need a coach, a one-on-one coach, email us. There is a company that we do recommend for one-on-one coaching, and they are not $30,000. They are expensive, but they’re not $30,000. They know what they’re talking about. They are the ones that have taught a lot of these other educators and coaches that you see online today. If you want it, you go to the source.

If you want a real coach, email us and let us know, and we will recommend you the right coach, but make sure that whoever you choose puts you ahead of their profits, okay? Just be smart, and be skeptical. Don’t get taken. Go into this with your eyes wide open, and always sleep on a big financial decision. I mean, if you’re going to spend a lot of money on something, think about it, sleep on it, and never, ever, ever open new credit cards or go into debt to pay for a training program or a product or a coach. You shouldn’t do that. That’s crazy.

Take your time learning. The markets are going to be here. They will outlast all of us. We’ll be gone. We’ll be dead. The markets will still be here. They’re not going anywhere. Don’t worry about it. You can take your time learning.

You could do what some others do, and you can become a member of a successful trading service. You can join a service, and you can learn that way. That’s why we started Option Genius and the other ones we have, so that you can actually see my live trades. You could actually interact with me and get a quasi-coaching. If you have a question, you can email me. You’ll get a response. Now, I’m not going to sit down with you and go through all your trades and coach you as a real coach would, because you’re not paying for that. Heck, my Weekly Trading System service was perfect last year, didn’t even have a losing trade all last year.

There are services out there that do make money that you can learn from. There are other services where they only give you the trades. Weekly Trading System, we only give trades. We don’t teach you how we do it or how we find the trades. That’s the point of that system. Option Genius, on the other hand, has lots of educational information in the members area, so if you want to learn about a particular strategy, there’s a section on that strategy. You can go through the videos and the PDFs and whatnot. Then, when we do the actual trades, then you can actually email me and ask questions. Option Genius has that educational component. It’s not just, hey, we’re going to give you trades. It’s education and trades; whereas, Weekly Trading System will be just trades.

You have to choose what you’re into. Some people are into learning and trying to do it for themselves. Some people are like, “Hey, I don’t have the time to learn. I don’t want to learn. Just give me the trades. Make me money.” Of course, it shouldn’t be used as a substitute for money management, because you have to know how to asset allocate. You have to know how to diversify and all that other stuff. If you don’t have somebody looking out for you, then you should get a Fiduciary, somebody who actually has to be on your side. He cannot do or recommend any kind of product information or investment that is not suitable for you.

That’s what I have to say on that one. Be careful of these scams. Like I said, I noticed that this one guy who owned this other company before, he’s back, so you might start seeing advertisements again, on TV or out on the Internet, for free options trading seminars for two hours. If you go, go with an open mind. You might want to leave your wallet at home. See what you can learn, but most likely it’s just going to be a sales pitch for another longer seminar for $5000 or more, because now we have inflation, right? They might be charging more for this seminar, and their coaching might be much higher, $40,000 or $50,000 for six months. Who knows?

Really, there are other alternatives out there. Just be careful. That’s all I have to say. Remember to trade with the odds in your favor. Take care!



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