How finance gurus make money
Show me $ 1 and I’ll show you 10 “money gurus” who claim they can make it $ 2.
These so-called experts are a dozen and they are responsible for a lot of bad money and financial confusion. I try to avoid them when I can, which is why you rarely read articles about certain money “celebs” on Two Cents.
But what happens when one of the so-called “good” types of money goes bad? Ron Lieber has an angry report in the New York Times about how such a financial guruJordan Goodman was fined by the SEC for making $ 2 million from a Ponzi program. Good man Iis a well-known money expert who misled people about a range of financial products and personally benefited from his connections with them.
What makes Goodman’s case so amazing, at least to me, is that he got his start as a personal finance writer. has made Money magazinewhere I used to work (I didn’t meet him there, he left in 1997). money and Time Inc. (RIP) generally used strict editorial standards and fact-checking – especially for the magazine. I am proud of my work there and know how much passion my editors and colleagues put into stories and reports. It was all in the service of the reader, all in an effort to level the playing field and help people get through all of the financial mess. These are values that I still hold today.
And as with most journalistic companies, editorial and business were very separate.
According to Liebers report after he left money, Goodman referred to himself as “America’s Money Answer Man,” and used his experience in service journalism to write books (shilling for products), host a podcast, and present himself as a financial expert.
The catch, of course, is that he is is an expert in covering money and finance for 18 years. But he used that experience to sell bad products to people and took some of the profit with him. (This is actually no different from the way many asset managers work.)
One such product, according to Lieber, was commercial mortgage bridging loans, “where common people would help property owners and developers with their short-term credit needs.” Goodman used radio appearances to suggest them to callers without revealing his partner relationship.
The loan would work like this: people turned over their money, and Woodbridge would find borrowers willing to pay between 11 and 15 percent for short-term loans. When these borrowers made their payments, between 5 and 8 percent went back to the investors and the rest stayed with Woodbridge and its agents.
Mike Rosen, the host of the KOA show, said Mr. Goodman failed to disclose his financial interest in Woodbridge – a 1 percent commission on any monies raised through his support.
But it wasn’t only these loans that Goodman paid in a shilling. He also had financial ties with “companies that promise to pay off your debts for pennies on the dollar and lend you money by using art and luxury handbags as collateral.” Payday loans and credit counseling were other fertile areas for him, at least at times.
I can’t really convey the amount of irritation I felt reading this article. Readers should rightly question our recommendations (especially when it comes to money / finance). But Lifehacker writers and the personal financial journalists I know from other publications are doing their best to put the reader first. This is our whole mission. The Goodman saga threatens reader trust for all of us.
This is how affiliate links work on GMG websites
In the interest of full disclosure, I would like to clarify Lifehacker’s partner / product relationships.
Lifehacker isn’t in the business of selling you things. When we recommend products, software, technical devices, etc., it is because we really believe or believe that under certain circumstances it will work for readers. We do not link to any affiliated companies, and authors and editors do not make money from products mentioned on the site. (When we link to a product website, we don’t make any money from that interaction, we just try Guide readers to more information.)
In addition, we rarely accept “giveaways” from PR firms, just like any other journalist who is worth it. This does not include books we may use for articles, reviews, etc., alcohol, food, and small dollar items (e.g. sent me a pair of socks and a little foam dwarf that I kept).
When we check a piece of technology, we send it back. If a product cannot be returned, it will be donated. Occasionally app developers offer us free trials, and if they do and we end up writing about the app, we will disclose it in the post. Personally, if I own / use a particular financial product that I write about I post it as well, but none of them have or will pay me for that mention.
However, being part of the Gizmodo Media Group, we benefit indirectly from anything readers could buy at The Inventory / Kinja Deals. The inventory is a separate site operated by separate staff. You can read how she Earn money with it Product recommendations here, but to emphasize one important point: “All content from Inventory and Kinja Deals is created completely independently of the editorial and advertising pages of our company and is never sponsored.”
I also asked readers questions about certain sources I used. To make this clear, I try to be differentiated with the experts I quote and the sources I link to. If you ever think they can’t keep up let me know.
I take all of this seriously. I want Two Cents to be a place where you can get high quality, reliable money content – not a place trying to sell you.