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EVERYBODY

WANTS
YOUR MONEY

The Straight-Talking Guide to Protecting

(and Growing)
the Wealth You Worked So Hard to Earn



DAVID W.LATKO

mm HarperCollins e-books



For my wife, Jan, who is the beacon of my life, and my two children:
Tiffany, who I know will always choose to dance; and David Jr.,
whose sensitivity and insights never fail to amaze me.



CONTENTS



Acknowledgments
Preface

section i How Brokers, Advisors, and Other

"Professionals" Get Their Hands into
Your Pockets — and How to Beat
Them at Their Own Game



one The Name of the Game . . .

two Financial Advisors:

Tales from the Dark Side

three The Greatest Stock Con of All

four It's All About the Benjamins

(Uh ... I Mean, "The Commissions")

five Picking the Right Financial Advisor:
Ten Questions to Ask . . . and How to
Score Their Answers



iv



Contents



section ii How to Invest in Real Estate Without

Getting Taken Every Time 55

six Real Estate: An Introduction 57

seven Four Real- Estate Myths 60

eight If You're Tliinking About Buying

a New Home . . . Don't 72

nine Second-Guessing Second Homes:

A Radical New Approach 80

ten Destination Clubs: Five Points
to Ponder . . . Before You Sign on
the Dotted Line 105

eleven Real-Estate Agents 112

twelve On the Auction Block 123

thirteen Real-Estate Seminars and Other Scams 129

section in You Always Hurt the One
You Love (To Repeat:

Everybody Wants Your Money) 135

fourteen Divorce — the Real Equal

Rights Amendment? 139

fifteen Men Are Dogs 157

sixteen Kids: To Heir Is Human 164

seventeen Bonanza! (Or, Leaving Your Children

All Your Money ... at One Time) 175

section rv Simply, Wheels 179



EIGHTEEN



It's the Wheel Thing:
Automobiles and You



181



Contents



v



section v Scams, Confidence Games,

and Identity Theft — Welcome to

the New Wild West 203

nineteen Who Are You? Tales from the World

of Identity Theft 205

twenty We All Live in Today's Wild West —

and the Black Hats Are Winning ... 217

twenty-one Uncle Sam, the Flimflam Man 228

section VI We Have Met the Enemy —

and He Is Us . . . 237

twenty-two The "Fiendish Five":

The Biggest, Baddest Financial

Mistakes Around . . . 239

twenty-three Penny-Wise, Pound-Foolish . . . 245



Note on Sources 257
Index 259

About the Author

Other Books by David W. Latko

Credits

Cover

Copyright

About the Publisher



ACKNOWLEDGMENTS



Not only do I enjoy a splendid private life, but I think I just may
have the most fascinating career in the world. No, not presidential
important or movie-star exciting, just plain interesting.

On a daily basis, people trust me implicitly with their hard-earned
assets earned over a lifetime to secure their financial futures. Not
only do they trust me with their personal financial world, but in
most cases the decisions I make will affect their family's fortune for
years, sometimes for generations, to come.

To me, it sure beats trying to sway a jury with theatrical rhetoric
or being the proverbial yes-man in some corporate hierarchy. Fortu-
nately for me, I learned a couple of decades ago that I don't take
orders very well — a fact supported by several past employers who
abruptly asked me to take my career and move on down the road.

Today, if time starts to drag, I have the luxury of throwing back
the doors to my radio studio and taping a segment of my nationally
broadcast radio show, David Latko's Money &More.

On the show, my cohost, Earl Merkel, and I talk and share views
with some of the most fascinating and powerful people in the world.
How many people can say they spent time today with Steve Forbes,
Newt Gingrich, Neil Cavuto, Richard Kiyosaki, Lis Wiehl, Brian
Kilmeade and other household names too numerous to mention?
Better yet, many of these same people I now have the pleasure of call-
ing "friend."

And then there are my books, of which this is the second in what
I envision to be a long list of titles to help the everyday investor bet-



viii



Acknowledgments



ter understand and master the pitfalls of the financial world that sur-
rounds him or her. All seen not from some theoretical perspective,
but instead from someone who has been in the trenches and dug his
way out.

Or maybe on this day I will be the guest on someone else's radio
show, maybe a television interview awaits, or I may have the plea-
sure of speaking in front of hundreds of people in a crowded lecture
hall. Few people will ever have this privilege to express in print, over
the airwaves, or as a guest speaker the sum total of what they have
learned in life.

But even though I love the old Frank Sinatra song "My Way" and
have built my career and fortune in similar fashion, this book would
not be in your hands today without assistance.

Help from my wife, Jan, without whose love, support, and en-
couragement I would not be the individual I am today. Also my two
children, Tiffany and David Jr., whose happiness, well-being, and
future have been my greatest enjoyment and motivation since their
births.

But I also owe a special thanks to Herb Schaffner, senior editor at
HarperCollins, an individual with whom I instantly felt a special
bond, from the moment he came down the elevator to shake my
hand and welcome me to the HarperCollins family. I trust in him
and believe his expertise will undoubtedly take my final effort to a
new plateau.

I must also thank Marion Maneker, who, with Herb Schaffner
and all the great people behind the scenes at HarperCollins, made
me feel right at home from day one and helped make this book what
it is today.

A gigantic thank-you goes to writer and author Earl Merkel,
great friend, radio-show cohost, and sometime personal psycholog-
ical guru who never lets me believe that the glass is anything but
half-full. Through his perseverance, dedication, persistence, and
humor this book is now complete.

But also, this book could not have been written without the help
of my dedicated staff, which was always there to pick up the slack so
I could spend the time writing just one more page.

Kudos to Gary Russell; even though we live hundreds of miles



Acknowledgments



IX



apart, our daily telephone visits and genuine interest in each other's
life have allowed us to chuckle at all of life's struggles. His laughter,
encouragement, and camaraderie could not be replaced with a
mountain of gold. Well, on second thought . . . maybe it could.

I also must thank my agent, Sharlene Martin, for her tireless days,
fierce loyalty, and her constant struggle for perfection in all I do. I
no longer call her my agent; she is now my friend.

Of course I thank my clients, without whose life stories over the
last quarter century this book would have little meaning. I only
hope in their eyes, through our friendship, I have given as much as
they have shared.

And thank you to my father, John J. Latko, and my late mother,
Violet, for instilling in me the values, tools, and discipline to allow
me not to shoot just for the stars, but far beyond. Although the
years we have left together may be few, I will feel your love for eter-
nity. Thanks also to my late stepmother, Genevieve, for her concern
and daily prayers.

To my only brother, John Latko, I feel blessed that I have the ex-
ceptional privilege to see you in my office day after day to discuss,
and resolve, all the world's problems. Although you are frequently
wrong, I love you, and you will always be my big brother.

A very special thank-you to Dr. Tim Harlow, head pastor of
Parkview Church, for helping me rekindle my relationship with
God, a flame that I am ashamed to say at times seemed in danger of
becoming extinguished.

Finally, to God, for the plan He has for me, and for holding my
hand through life.

— David W. Latko
January 2006



PREFACE

IT'S TRUE. EVERYBODY
DOES WANT YOUR MONEY.



If I had consciously set out to come up with a philosophic manifesto
that would echo the ravings of a street-corner schizophrenic, I
could not have done better than the title of this book.

I love it. Everybody Wants Tour Money — doesn't that say it alP.

Still, even after months of laboring over the pages you are about
to read, I look at the title and imagine myself standing on a soapbox
in what my fellow Chicago-area natives still affectionately call "Bug-
house Square," alternating between incoherent muttering and im-
passioned outcries, detailing dark conspiracies and heinous plots.

But, as one of my clients told me not so long ago, "It ain't para-
noia if they're really out to get you."

And "they" are, my friend; they really are.

In today's world, there's no shortage of charlatans and con artists
lying in wait for the innocent or the unwary. Pick up any newspaper,
tune in to any TV news program (local or network national), and
the evidence is clear: we are as far from a Utopian society as human-
kind ever was.

To paraphrase Blanche DuBois, late of the still-soggy wasteland
that was once New Orleans, we've all come to depend on the kind-
ness of strangers — a level of naivete not dissimilar to that of the
wildebeest calf who saunters toward the water hole, assuming that
those lurking shapes awash near the shoreline are merely harmless
logs.



xii



Preface



The result: today's crocodiles are sleek and well fed, both those
found in nature and their two-legged brethren alike.

And that's why I wrote this book: it is my humble attempt to pry
apart the links of the food chain that bind prey to predator, eco-
nomically speaking.

An honored adage in an earlier Wild West stated simply: "God
made all men. But Samuel Colt made all men equal." Used effec-
tively, the information I present in these pages can serve the same
purpose that the Colt Peacemaker did on the American frontier.
Knowledge is power, and power is the great equalizer for all of us.

But do not think that I target only the faceless predators out
there who consciously seek to do us harm.

In my career as a financial advisor and counselor, I've regularly
been taken aback by the damage I've observed inflicted on the fi-
nancial well-being by members of the victim's own family — often,
with the best of intentions.

A parent dies, for instance, and well-meaning adult children gather
to provide vital emotional support for the surviving partner — and
then, because "don't we have to do something now?," well-meaning
kids assume the mantle of decision makers in matters of which they
are clueless. When those decisions involve the surviving parent's
money, the result can be horrific — both from a financial viewpoint
and in terms of the emotional toll inflicted on all involved.

So I deal with that situation in this book, too — along with other
examples of how to protect your finances from the people you
love . . .

... or, conversely, from those persons who no longer love you.

Divorce is a fact of life in today's world, and the adverse impact it
can have when one life is severed into two has become almost a
cliche. A cold analysis of divorce statistics presents a clear picture: in
virtually every instance, the so-called equitable division of marital
assets results in near-term financial disaster for the female partner.

"Who-gets-what-and-for-how-long-sign-here-please" is the rule
rather than the exception in American divorces. It's a shameful
situation, and one the American legal system appears incapable of
resolving.

But in this book I propose a new initiative, a fresh system of pro-



Preface



xm



jeering precisely how "equitable" any proposed divorce settlement
will ultimately be. In that way, both parties — as well as the legal sys-
tem that oversees the divorce process — can clearly understand the
long-term impact of the decisions they are making . . . and as a re-
sult, retain the money, properly, and security that is rightfully theirs.

Other chapters deal with real estate, investments, identity theft,
estate planning, the secrets of buying cars without being cheated —
even the ever- expanding varieties of con games and scams that tar-
get all of us today. If you consider this book a survival guide for
modern times, you won't be exaggerating its scope or intention.

Everybody Wants Tour Money is not a textbook, however — far
from it, in fact. I've used the human stories of my friends and clients
to populate each chapter with real-life illustrations and examples.
The names have been changed, and where it was necessary I've
done what I could to preserve the privacy of the individuals con-
cerned — but I hope the flesh-and-blood qualities of those whose ex-
periences I use here still comes through clearly.



Who is "David Latko," and why should you accept what I will pre-
sent in this book?

I was raised in a lower-middle-class family in northwest Indiana
not far outside Chicago, famous today as the "buckle of the rust
belt." I grew up hearing my father say that education was the only
way up (which to us meant "out"). His words had weight with me,
in large part because I knew that he had to drop out of high school
in the 1930s, taking a job to help out financially at home.

And as is often the case with those who have little, there was al-
ways someone trying to ensure that we had even less.

Willie Sutton famously proclaimed that he robbed banks because
"that's where the money is." But not all crime focuses on the single
"big score"; stealing the widow's mite — from a lot of widows — is a
long-practiced approach of the despicable bottom-feeders who prey
on the impoverished.

For that reason, much of my early education was aimed at malting
me what today pop sociologists would call street-smart.

I learned early in life how to penetrate the smoke screen of half-



xiv



Preface



truths and lies that surround every scheme. I learned what questions
to ask, and (even more important) what answers I should expect. I
learned to double-check any so-called fact I encountered, and to ex-
amine all so-called conventional wisdom through the microscope of
common sense.

But I didn't ignore the "book larn'ing," either.

I started college, and did rather well, while still attending high
school at age sixteen. At my graduation, I was young, energetic,
good-looking (I also had plenty of modesty, you'll note), and the
proud possessor of not one, but two master's degrees.

I've worked in the legal system as a court administrator and
served in other functions on the government payroll. After several
odd attempts in the private sector (a few of them very odd indeed), I
landed a position with E. F. Hutton, one of the biggest firms on
Wall Street. I was elated; I had finally found my niche. I would be
around a great deal of money, even if it was not my own.

From there I was lured to another major brokerage house, and
then another — a managerial position with the biggest name on Wall
Street.

Quickly, I only learned that as a boss, I now merely reported to
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