Money Blue Book

I debated about whether I should share this story, but at the end I decided that my experience might help prevent someone from falling into the same scam as I did. At the time I was young, inexperienced and financially naive. Since then, I’ve learned and improved based on my past failures and eventually went on to run a small but profitable home business by making money online with ebay, at least for a modest period of time.

It All Started With Too Much Greed

Shortly after college I decided I wanted to start a part time side business selling merchandise on eBay. But first I needed to find a wholesale supplier. After some research I decided I wanted to focus on consumer electronics such as GPS navigation devices and Apple iPods, and concluded my best bet at finding a supplier would be through a free network site like Alibaba, that helps connect sellers with buyers of goods. Little did I know at the time, but sites like Alibaba are crawling with scammers and evil doers.

I ultimately decided to focus on selling Garmin and Tom Tom branded GPS units. After a few searches, I was amazed to find numerous sellers offering brand new Garmin GPS units for very little money. The Garmin GPS model I was interested in buying in bulk retailed for more than $1200 on eBay at the time. The sellers I found on Alibaba were offering each unit for only $700 each. The asking prices were exceedingly low, but sadly I was too overcome with dollar signs in my head to realize that the offers were likely too good to be true. I essentially had blinders on and was too busy calculating all the profit I was going to make by selling these units for such high markup. Eventually I narrowed down a potential seller.

Greed Prevented Me From Recognizing the Warning Flags

When you are overcome with greed, it is hard to think clearly, even when a clearly fraudulent transaction is staring at you in the face. I should have been more aware of all the telltale signs that the seller was likely a potential scammer and a fraud. First of all, the seller provided me contact information based in Indonesia, a country like Nigeria that is notorious for being a hotbed of scammer activity. He also provided very limited company background information that could be used to verify his personal or business identity, or determine his true geographical location. The phone number he provided me did indeed work, but I should have realized that nowadays with VOIP technology, phone number locations are very easily faked. It’s easy to reside in one country and still obtain a temporary, disposable local phone number from another. Even paid identity authentication and verification services are subject to abuse and illegal manipulation as well. It’s not all that difficult for online scammers on Alibaba or any other Internet exchange service to obtain a genuine TrustPass or Alibaba Gold Membership certification using falsified identification.

Another thing that should have raised red flags was the fact that the seller offered to pay for shipping, which is an extremely unusual practice for first time wholesale purchases, especially since international shipping can be quite expensive. The seller also insisted on rushing the sale, frequently threatening to end the lucrative deal if I continued to demand more verification information and not move forward with payment. But otherwise, the scammer was extremely convincing in the way he portrayed the deal as completely legitimate. Rather than thinking that the sale was a scam, I just thought I was getting an excellent deal.

Because I was so motivated by greedy emotions, I was more fearful of losing the lucrative buy than I was of being scammed. There were so many warning signs that I simply ignored, such as the seller refusing to accept Paypal or even credit card payment. Instead, he demanded payment through bank wire transfer. If I had conducted more due diligence, I would have known that unlike Paypal or credit card transactions where my money would have been protected, bank wire transactions are permanent and irreversible once properly executed.

I Fell For the Trap – Hook, Line, and Sinker

Ultimately I sent him over $2,025.00 through bank wire transfer for 3 sample Garmin GPS units. Once he had the money, he disappeared without a trace. I attempted to contact him through the phone number he provided me, but the line had been disconnected. He never responded back to my e-mails and I never received the merchandise. My money was gone and I never recovered it.

Afterwards, I felt very stupid and ashamed, but I learned many valuable lessons as a result. I’m glad I experienced this hard knock life lesson earlier in my life when the potential stakes were lower. I thought something like this could never possibly happen to me, but it did, and I allowed my greedy emotions to get in the way of rational caution. You and I, we may think we’re very smart and that we’re so clever, but we are only human, and still susceptible to basic human emotional irrationality. It’s difficult to control emotions like greed, fear, and pride. So my friends, it’s important to always stay vigilant – scammers are everywhere and one day you might be in their cross hairs too.

I love looking at numbers. I also love looking at charts, graphs, and balance sheets that organize numerical data into quantifiable displays. I think I spend way too much time looking at my numbers, but a glance at what my other fellow personal finance bloggers frequently write about and discuss, I get the feeling I’m not alone on this.

I Like Having Access to My Numbers At All Times

Seriously, it doesn’t matter where I am – I could be sitting at my desk at work or relaxing in front of the television set at home, but at some point, I’m going to want to take a look at my numbers. I use the term numbers loosely, but it’s an all encompassing term to include everything related to statistics – from my blog’s Sitemeter traffic counter to my investment brokerage account’s numerical fluctuations. I don’t want to say I’m addicted to statistical trends, but I get a lot of personal satisfaction out of it. It’s hard to point my finger on exactly what is it that I find so fascinating about statistics, but I’ve found that many personal finance bloggers also seem to share the same type of mathematical obsession.

Statistic Bloggers Like To Have Things Numerically Organized

Having talked to other fellow bloggers and read their articles over the years, I’ve come to realize that many of us are quite similar. We all seem to enjoy watching the numbers go up and down as it gives us a sense of where we stand in the financial world. We like things to be organized in numerical fashion. Many, if not most of us have set personal finance goals that are frequently met when a certain number or percentage is met.

I personally enjoy working with numbers because it’s a form of self assessment and comparison that is not only objective, but can be applied towards different individuals in different life situations. Numbers like salary, wage rate, interest rate, expense ratio, and rate of return are universally applicable and translatable to everyone.

Frugality Bloggers Are a Bit Different

Unlike the number freaks who are usually equally obsessed as I am about hard quantifiable data, some personal finance bloggers write mostly about frugal living and bargain hunting. These writers on a whole tend to stay away from numbers and statistical scrutiny. Frugality bloggers tend to be less interested in statistics and focus more attention on the accomplishment and satisfaction they get from discovering bargains and finding ways to spend their money more wisely and efficiently.

Maybe it’s just me but I’ve noticed that there seems to be more male bloggers who fall into the hard statistics category. There tends to be more more female bloggers who write content that fall into the frugality one. I can’t recall having read an article recently written by a female blogger discussing financial investments that went into a numerical analysis. Anyone else notice this? Perhaps I’m just generalizing too much.

I enjoy reading and following the personal financial journeys of individuals. It’s the individual that puts the “personal” in personal finance and makes the subjects of money and investing so human and genuine. There is no denying that money is a very essential and pervasive element of our lives. Some people just don’t have enough. For others, money is sufficient but the difficulty comes when deciding how to best protect and manage it. Lack of money can cause people to fall into debt, while at the same time it can be the liberating savior to some of life’s problems.

CNN’s Family Profiles

One of my favorite reads is CNN’s Millionaires in the Making series. Every few weeks they provide the profile of a new family or couple, complete with all pertinent and interesting demographic information such as their individual ages, occupations, salaries, and a complete listing of their financial assets and liabilities. The articles even provide a picture of the family or couple being profiled that also frequently includes them with their children.

Maybe I have a natural voyeuristic fascination, but I like to read their profiles and see how I match up. I must commend the couples and families for being so willing to provide their photos and reveal so much personal information about their finances that most people, including myself would normally be sort of reluctant to provide in its complete entirety. Although most personal finance bloggers like to include profile snapshots of their financial situation, many are reluctant to provide photos of themselves or their family, preferring to maintain a semblance of privacy.

A Good Diverse Sample

At the end of each profile story, CNN’s blog provides an analysis called “Our Expert’s Take” in which they break down the family’s progress towards millionaire status. While some are clearly on their way, others have more work to do before they can get back on the right financial track. I think CNN has tried to provide a good sample and diverse selection of profiles. At first they were only providing profiles of comparatively rich families. After some readers complained about the frequent affluence of the families being profiled, CNN began to include stories of more middle-American families and couples on its blog.

Reading these profiles and stories helps to remind me that we are not alone. We are all trying to make it financially in this world, to pursue our dreams and plans for ourselves and our loved ones. But for the non-personal finance bloggers out there, how comfortable would you be to share your own complete personal financial profile? What about for the personal finance bloggers?

What a nice lazy Saturday afternoon. I think I will go file my paperwork to obtain a Business Trade Name Certificate.

I have a decent full time job in finance/law and I also write for a few blogs on the side for fun. Although I see blogging as more of a hobby, I think I should start treating it more like mini-business. I could choose to set up the blog business in a variety of ways depending on my choice of business entity. The primary ones are corporations, limited liability companies (LLC), limited partnerships, and limited liability partnerships. Each type has its own advantages and disadvantages in regards to liability protection and taxation benefits. There are even fancier and longer named options such as limited liability limited partnerships. But since it’s just me for now and I don’t plan on taking on business debt or expanding the business for some time, my current chosen business entity will be that of a sole proprietorship. Besides, right now I don’t feel like having to deal with filing LLC Articles of Organization papers or having to pay pricey incorporation fees.

Sole Proprietorships Are Easy To Create

Legally, any one can start up a sole proprietorship. You could set up a cardboard table and start selling lemonade and that would be considered a sole proprietorship business. There are no fancy or extra paperwork to create the business entity other than compliance with any relevant state and local licensing and taxation requirements. Sole proprietorships are considered flow through entities, which means that all profit and losses will go straight to the owner and all income generated by your sole proprietor business will be considered your own ordinary income. You can still generally deduct business related expenses for tax purposes, but it has the least amount of tax benefits compared to the other entities. But it’s the easiest to create with the least amount of government regulation. Since I’m lazy, I’ll put off considering more complicated business entity choices for now.

Filing a Trade Name, aka Doing-Business-As Certificate

Although I’m sticking with the easy choice for now, someday, the business might grow to the point where I will need to change business entity to take better advantage of tax breaks. So that’s why instead of running this side blog business in my own name I want to operate it under my chosen business name. It’ll be easier to differentiate and separate my personal operations from that of the business in the future.

Filing an application for a trade name in my state of Maryland is easy and is done through the Maryland State Department of Assessments and Taxation. Filing cost is only $25.

Thinking for the future, I could also consider filing for a federal trademark now to protect the mini-company’s brand name, but it’s not really necessary at this time. Filing for a federally registered trademark is expensive and can cost upwards of $300. For now, I’ll just rely on common law protections until the day I decide that I need constructive nationwide notice of my trademark.