Lavish lifestyle should be a Red Flag
It seems like we have a Red Flag that isn’t on our list. Time and time again, we find out that a financial advisor who has been caught red handed doing a ponzi scheme has been living a lavish lifestyle.
Remember Ian Thow. He had a huge house, an airplane, and donated generously to charities on Vancouver Island. Bernie Madoff lived high on the hog too… a lovely apartment on Upper East Side in New York worth about $5 million, a 55.5 foot yacht named Bull, and a Palm Beach mansion worth about $10 million.
Probably better to ask yourself some questions about how this lavish lifestyle came to be. Hopefully, it is not with your money. Always pay attention to your instincts, do your homework when you choose an advisor and if he or she shows up at your house driving a Mazerati, then it might be a good reason to move onto to a financial advisor who drives a Honda.
Living the Life of Riley might be a big hint that he or she is up to no good.