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Are Americans really Legally Piggybacking “Canadian Social Security?”

Does Lifetime Income Report have a secret way to "piggyback" and earn "benefits" on the Canada Pension Plan? (Uh, "no" ... but more on that in a moment)

This ad has driven a lot of questions to the Gumshoe doorstep — the pitch is from Zachary Scheidt for his Lifetime Income Report, and it implies that we can get extra “benefits” by “piggybacking” on the Social Security plan of Canada.

Really?

Well, no. Not in the way you’re thinking. But if you have a very open interpretation of the word “piggybacking” and are willing to accept an imaginative turn of phrase, there is a little something to the ad. Let me explain.

For those who are new to Stock Gumshoe, this is what we do — we look at the ridiculous ads sent out by investment newsletters and others, the ads (like this one) that promise huge returns and use misleading language to imply that there’s a secret stock or strategy that will finally get you that yacht and Maserati in time for retirement… and we tell you what the ad is really hinting or teasing us about, explain what it is as best we can, and let you think for yourself and do your own research once you’ve got a bit of the reality and can understand the logic (or lack thereof) of the investment.

piggybackWe do this most every day — sometimes we find great ideas hiding behind the terrible ads, sometimes we just defuse the greed impulse and save people from themselves… you can use the links a the top of the page to sign up for either a free or paid membership, or just submit your email here to get our free daily newsletter with new teaser solutions.

And here I should note that this ad was originally sent around in May of 2015, and that’s when we covered it. I have lightly updated a few things here today, but the following article is essentially unchanged since 5/13/15 (the ad being sent around today still has a May 2015 signature line on it, so that presumably hasn’t really been updated either).

The only real change in the ad is that the hook is now not just that there’s a way to “piggyback” on “Canadian Social Security” with Scheidt’s special piggybackretirement.com website … but that this secret “rattles the cages” in Washington, and Zach Scheidt got a threatening letter from a government agency because he sent this ad around (he doesn’t share the text of the letter, but I would guess that the content was more along the lines of “stop misleading consumers” than it was “stop revealing these important secrets”).

Back to Zach Scheidt’s ad… the headline is what really gets peoples’ attention, I think, that notion that somehow “piggybacking” Canada’s retirement plan is going to get you some “benefit” checks…

“Americans Now Legally Piggybacking ‘Canadian Social Security’… And Collecting Extra Monthly “Benefit” Checks From $400 to $4,700”

And no, you’re not going to get that. You can’t get benefits from the Canada Pension Plan (that’s what they call their social security system) unless you pay into it while you’re working in Canada — in broad strokes, it’s not too different from the US Social Security program.

But you can, kinda, copy them. If you want to.

That’s a big difference, no? Imitating someone, versus collecting checks from them? I’ll explain a bit more in a moment, but first I have to share with you just a bit more of the misleading teaser pitch — here’s the part about why you’d want to “piggyback” on Canada’s scheme:

“I recently heard some fascinating claims about a potential loophole in the Canada Pension Plan…

“A loophole that allows Americans of any location, age or income level to begin collecting ‘work-free’ income checks running from $400 to $4,700 per month.

“The Canada Pension Plan — in case you didn’t already know — is the Canadian equivalent of the Social Security system we have here in the States…

“…except for a few key differences.

“Unlike American Social Security (which is run by overpaid government bureaucrats), the Canadian variety is managed by a highly skilled team of professional investors.

“Also, unlike American Social Security (which you and I both know is a system that’s running on fumes), the Canadians have managed to more than DOUBLE their reserves since 2004.

“In fact, from the projections I’ve seen… reserves for the Canada Pension Plan are set to QUADRUPLE by 2040 (which, ironically, is the same time when most experts believe American Social Security will be completely bankrupt).”

All that is pretty much true — the Canada Pension Plan does really include a distinct account, and it is managed as an investment account like most private sector pension funds, buying up equities and bonds and valuable assets around the world in order to meet their future income obligations. Canadians don’t get more retirement income when the pension plan does better, their benefits are set by law and regulatory guidelines in much the same way that US Social Security benefits are set, but they do enjoy a bit more security, perhaps, because they have what I consider a much more viable system.

The Canada Pension Plan has probably about a 75-year horizon of reasonably being able to pay expected benefits based on the current contributions and the value of (and returns from) the investment fund, so it’s not just a pay-as-you-go benefit like Social Security (though the fund only represents a small portion, 20-30%, of future liabilities, the rest is like Social Security and dependent on future contributions), and the government hasn’t been using all the cash flow from Canada Pension Plan contributions for other things — the Canada Pension Plan, unlike Social Security, is partly in a “lockbox”, at least for now, and it’s not just an IOU from the government.

But can you piggyback on it? What the heck does that even mean? Scheidt goes through several examples of readers he has talked to who have, or at least so he implies, somehow invested in the “Canada Pension Plan” … here’s one example:

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“As Anne explained, she first discovered about the Canada Pension Plan while living with her husband in Nashua, New Hampshire.

“Her house was, as she put it, ‘just a stone’s throw from the Canadian border’ … and her backyard actually ended at the provincial boundary.

“But make no mistake about it… Anne has never lived or worked in Canada. She barely even visited our “neighbor to the north.”

“So how was she able to piggyback the system?

“Well, according to Anne, it all has to do with a major change that took place with the Canada Pension Plan back in 1997.”

I guess “a stone’s throw” is a nice colloquialism you can use for any distance, but Nashua, NH is just about a Boston suburb — it’s about as far south as you can get and still be in New Hampshire, so it’s about a three hour interstate drive to the Canadian border. And apparently Anne has a helluva big yard.

But that’s not the real point, of course. Yes, 1997 was when Canada reformed the Pension Plan to make it more sustainable — basically, they increased the contribution rate by 50% and created that investment fund. The fund is indeed managed with some independence, it is overseen by the semi-independent CPP Investment Board, and it is basically a huge institutional investment fund with about $250 billion under management in the CPP Reserve Fund.

I admire the Canadians for doing this, it was an abrupt but probably much healthier solution than simply scooching out the retirement age and increasing contributions and adding taxes here and there as we’ve done in the US — as is typical, US politicians did what voters consistently tell them we want them to do: Put a coat of paint on the problem, and don’t make any hard choices. That’s probably not completely fair — we did increase Social Security taxes as part of the tax reform program in the early 1980s (not as dramatically as Canada did a decade later), and again very slightly in 1989… but that’s about it.

But that’s not the point, either — other than that Zach Scheidt certainly knows that talking about Social Security will get retirees hot and bothered, and getting people hot and bothered is a good way to get them to read your ad, and oh, by the way, the average person who subscribes to an investment newsletter is roughly 60 years old, exactly the person who gets most anxious about Social Security. And nothing about Canada’s Pension reform of 1997 had anything at all directly to do with this “Anne” person unless she was a Canadian citizen.

So what’s the real story? More from the ad:

“I began hearing wild rumors about a savvy group of Americans who’ve figured out a way to legally piggyback the Canada Pension Plan…

“And collect an additional $400 to $4,700 per month as a result.

“From what I could gather, these folks were able to do this without living… working… or even traveling to Canada.”

This, really, is the problem with the ad — folks are likely to read that and see words like “collect” and “benefit,” but a far more accurate word would be “earn.” Because all Scheidt is really talking about here is collecting dividends.

They don’t even have to be Canadian dividends, frankly. And probably most of them aren’t from Canadian companies.

The woman he uses as an example, Anne, provides a few more clues about exactly what’s going on underneath this charade of “Canadian Social Security Benefits”….

“Anne didn’t invent the loophole, or even discover it for herself. She simply heard about it from a close friend (sort of like how I’m telling you today).

“And since it seemed relatively risk-free and only required a few hundred dollars (and a couple hours of her time) to get started, she figured it was something worth trying.

“Anne continued to make ‘contributions’ to the account… which can be done in some cases for what amounts to as little as 50 cents per day. Less than the price of a cheap cup of coffee at the store.

“She didn’t have to ‘renounce’ her citizenship… or visit a Canadian embassy …or do anything drastic.

“Today, she collects enough in ‘benefits’ to do all the extra things she wants… without putting any additional strain on her budget.

“And the $407 she collects every month from ‘piggybacking’ — barring any unforeseen disaster — should continue to ‘roll in’ for the rest of her life.”

Whenever a word or phrase appears in quotes in these kinds of teaser ads, like “Canadian Social Security” or “Contributions” or “Benefits,” you can pretty much assume that the quotes mean, “look out, I’m making stuff up here.”

What Anne really did, in all likelihood, was set up either a simple brokerage account or a direct stock investment plan (DSPP or DRIP are usually the terms used now, and their primary benefit is that they allow small monthly investments in individual stocks and free dividend reinvestment — something that used to be almost impossible before discount brokerages took over a couple decades ago). She either collected the dividends or reinvested them, and she kept buying a bit each month, and she reports those dividends on her taxes just like anyone else, and they provide a nice supplemental bit of income to add to her pension and her (US) Social Security checks. Scheidt says that she reports this “Canada Pension Plan” benefit on line 9a of her 1040, which is, of course, right where you report your dividend income.

What is she earning that dividend income from? That I can’t tell you, Scheidt doesn’t hint at all about which income investments he suggests, or which ones Anne bought, or what might be the best buys now — line 9a is actually for ordinary dividends, not qualified dividends, so it might even be that he’s suggesting slightly more traditional income investments like real estate investment trusts (REITs) or bonds, or funds that invest in such assets and which pay fully taxable dividends (as opposed to the qualified dividends that are paid by most “normal” corporations that aren’t tax-advantaged entities).

Scheidt does go on to get a little bit more clear about this, after talking about the huge asset base managed by the Canada Pension Plan, including investments in hundreds of companies and funds around the world — here’s how he gets us back to reality — at least, for the few intrepid souls who could stand to read this far in the ad:

“… they strategically invest in companies that are highly profitable… companies that gush large amounts of cash.

“Like one of my favorite businesses… a company you’ve probably never heard of before… a company called Realty Income Corp.

“Realty Income Corp. specializes in commercial real estate. It owns 4,300 properties in 49 states and rents out these properties to businesses like Walgreens, Taco Bell and Fed-Ex.

“And here’s why I like it so much: Its main goal is to make ever-increasing dividend payments to shareholders.

“In fact, its mission statement reads, “Since 1969 our mission has been the same… to generate dependable monthly dividends.”

“And that’s the key: dependable monthly dividends.

“It’s now paid out 535 consecutive monthly dividends. And it’s increased those payments 79 times.

“And when you begin piggybacking the Canada Pension Plan — in the way I’ll show you in just a minute — you essentially become a part-owner in incredible income-producing assets like Realty Income Corp.”

So yes, “piggybacking on the Canada Pension Plan” really just means “buy good, income-producing stocks.”

Dang.

You actually have to buy them. And wait for your dividends to come in, and to compound over time. And you don’t get free money from the Canadian government.

This is terribly disappointing. But, of course, reality often disappoints — especially when it comes to investing.

Do you really want to “piggyback” on the Canada Pension Plan? Their goal is 4% annual real returns (after inflation), which is the number they need to hit to pull their weight in backing pension benefits for the next 75 years. To do that, they keep costs low and have lots of investments in real estate, private equity, and public equities — you can review their website and see some of the specifics about what they own if you like, but other than a few overweight positions in Canadian banks and assorted other international investments it’s going to end up looking a lot like the performance of a global stock market index. They own 2,500 individual equities, and their largest weighting is less than 0.5% in any one stock. A conservative, extremely diversified equity portfolio.

And yes, they do have a mandate to invest with an eye on future inflation prospects, and to try to get some “alpha” by investing with other private equity and hedge fund managers, and buying individual income-producing assets like office buildings — but that’s really no different from any big pension fund or insurance company. There’s nothing magical about the Canada Pension Fund, and it certainly doesn’t have shockingly magical returns — just like there’s nothing magical about buying a bunch of dividend-producing stocks, investing continuously into those stocks, letting your dividends compound, and creating a big of a supplemental income stream from those dividends over a lifetime of investing.

That’s really pretty much all she wrote — or all he wrote, in this case. Scheidt says he has a private website that will help with some future income planning, and help you “piggyback” on the Canada Pension Plan, but I would imagine that probably what he’s really doing is picking a couple dozen income stocks, probably including REITs like Realty Income (O), which was the only individual idea he mentioned or hinted at in the ad, and throwing in a few personal finance calculators so you can see how much you have to invest in these kinds of stocks in order to earn some future hypothetical “piggyback” income.

He does also briefly mention “juicing” those dividends, which means he’s very likely also suggesting some options income — selling covered calls or cash-covered puts along the way on your stock holdings to improve the returns (with some significant tax consequences sometimes, so be careful), but that’s about it as far as this ad goes.

Anticlimactic, no? Well, at least I warned you up front — no, the Canadians aren’t going to send you a benefit check unless you earned it, and you can’t “buy in” to the Canada Pension Plan (nor would you probably want to, since you’re probably aiming for returns of more than 4% — or can get similar returns with either a large basket of dividend stocks or a few index funds), and unfortunately I can’t tell you which specific investments Scheidt is suggesting for income because he doesn’t hint at those at all. If you’ve suggestions for income stocks you think are worth consideration, whether they’re Canadian banks or REITs or “blue chips” or whatever else, please feel free to toss ’em on the pile with a comment below.

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thomas searcy
Guest
thomas searcy
July 23, 2015 4:46 pm

thank YOU very much !

Mike S
Mike S
July 28, 2015 8:33 pm

Thank you for all your insight and advice. I am quite a novice at investing and have been all caught up in the many newsletters and stock picking sites, getting all excited. Have gotten what I thought was good information (and some was) but find it very hard to know what to believe and what not.

Your explanations of certain advertisements are the ones I get all the time and I have been quite enlightened by your take on them.

I am one of those that started way too late and am trying to play catch-up with my retirement funds always looking for the best returns and feel like I can be easily misguided.

I thank you for your bringing me back to my senses.

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Crewmax42
Guest
Crewmax42
August 5, 2015 4:04 pm

Interesting. Perhaps Anne invests in the funds that Canadian system invests in, in the same ratios. Thus, she is ” piggybacking” on their research and investment decisions. Just a guess.

Kim
Kim
August 11, 2015 6:11 pm

I got on Stansberry’s email list when I bought a book (America 20/20) it was cheap, peaked my interest, under $10, about what I can afford, I’ll be cancelling that subscription (free month) now that I know they ran this ad too, cheesy – I’m on SSD, mid-50’s & have thought of learning more about investing (trying to find a cheap way) my Dad was good, he was a school administrator but should’ve been into stocks full time, made over one mil at one point , crash in the 80’s wiped most of it but he made a substantial comeback before he passed (94) – I wished I paid more attention, trying to play catch up now, I’m not getting any younger , where did those years go?!!!! Anyway, I got this email from another “survival” subscription but after reading it, googled it and wound up back at stockgumshoe …. I’ve read a few of your articles in the past Travis & you always explain things easy, to the point & your right on the money…lol. – I really should just stop reading other stuff & subscribe here – for sure in next months budget…thanks, that’s my 2¢, keep up the good material! √

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Suzanne corey
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Suzanne corey
August 14, 2015 2:17 pm

We have stocks to invest in in the U.S. When I read the article that’s what came mind. I thought you could start investing for a return. There are articles about stocks that bring good return, AT&T comes to my mind as being a good one. The U.S still has a lot to offer.

Bob Jones
Guest
Bob Jones
August 16, 2015 8:02 am

Look who’s involved with Agora Financial: Porter Stansberry.
He was fined $1.5m by the SEC for publishing fraudulent information:
https://en.wikipedia.org/wiki/Porter_Stansberry
Stay far, far away from these people.

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Gerald C. DeLuney
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Gerald C. DeLuney
August 18, 2015 8:23 pm

I lost connection on my computer to get the password in order to apply for this program. Please send me this password and how to connect to get this done. I ordered the articles for $49.00 and I want to get this done as soon as possible. Thank you
Gerald C. DeLuney

SoGiAm
August 18, 2015 9:07 pm

Gerald, if you are asking about recovering the stockgumshoe password, go to the top of the main page and press the “Contact” icon e-mail SGS and they will send you your password. Best2You-Ben

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MARJORIANE Svihula
Guest
September 17, 2015 5:46 pm

I would like to join the piggybackretirement.

John
Guest
September 19, 2015 12:30 pm

Well, he got me too. Although I didn’t realize until today that it is a subscription. I found a second withdrawal from my credit card today. There is nothing I can do about that, but
I can quit before it gets any higher. And I haven’t received a penny from Canada at q–/

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Bob Heffley
Guest
Bob Heffley
September 19, 2015 4:15 pm
Reply to  John

Thank you!!

Arham Khan
Guest
Arham Khan
September 23, 2015 5:48 pm

I just received this very email from this d bag! I knew it couldn’t possibly be true so I googled it and , of course, it was a pipe dream as I thought.
I told him that I am forwarding this email to DS of Southern District of NY who happens to be a friend. This is so bad and so low I couldn’t find suitable words to curse him. I feel bad for gullible people that actually sent him money !

Primo Benavides
Guest
October 12, 2015 2:00 pm

This Anti-Social Security, the Social Security Trust Fund is going broke Alarmist, tax exempt, corporatist, right wing article was written by a Regressive, Egotistical, Pompous, Useless, Belligerent, Lackey, Insidious, chicken-hawk, anti-constitutional, neocons. Republicans alarmist, terrorists are coming, propaganda agenda, will become insiginificant in 2016. We The People can see through all of your Bovine Sewage.

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H. Teel
H. Teel
January 29, 2016 1:28 pm

Did you randomly pull words from a dictionary? Nothing you wrote makes sense. It certainly doesn’t add anything to this article (Which I happen to appreciate BTW).

Gabriel
Guest
Gabriel
November 1, 2016 7:29 pm

He is suggesting that investors buy the exact same stocks that are held by the Canadian Pension Fund in the same proportions that their fund’s assets are allocated, to the extent that they are able to. This makes sense not just because it is a conservative portfolio designed to generate stable income for many decades to come, but also because such a massive national investment plan will inevitably drive up the prices of the securities it invests in, especially over the long-term, which will be the natural economic result of the increasing demand that the fund will create for stock in those companies, and that should considerably increase the total return for Scheidt’s subscribers over the long-term. This is even more true since the pension plan and its portfolio have been relatively newly established, and because Canada expects the size of this already very large portfolio to more than double within the next couple of decades. A forty year old person who “piggybacks” on the Canadian pension fund by mimicking their portfolio will almost certainly earn more from their investments by the time they reach retirement age than they would have from U.S. Social Security, if they make the same contribution to their new “piggybacked” investment fund that they are required by law to pay in tax to the U.S. Social Security Administration. In that way, Zack’s strategy is actually quite sound, and probably worth a reasonable fee that a typical broker might charge. He would certainly be worthy of great merit if he were teaching this strategy to the public for free. Essentially what he is suggesting is the voluntary privatization of Social Security by those who have the means and the knowledge to do so, by letting the Canadian government do your investment research for you for free and investing your own money according to the Canadian government’s recommendations, which is a proposal that is certainly worthy of consideration and which is likely to benefit those who are willing and able to implement such a strategy, although there would be diminishing returns for late-comers, and a bubble could form if hundreds of millions of people all decided to “piggyback” on the same strategy.

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Darryl Lawson
Guest
October 20, 2015 1:33 pm

Where, and for what price, may we reach your “website’?

Stan Holtzleiter
Guest
Stan Holtzleiter
November 7, 2015 11:26 pm
Reply to  Darryl Lawson

Where may I see your wrbsite

frank
Irregular
October 24, 2015 3:50 pm

As a Canadian, I found the never ending torrent of these ads gutbustingly funny.

Brenda
Guest
Brenda
January 31, 2016 7:29 pm
Reply to  frank

Me too! Along with the ads for Canadian pharmaceuticals. I suspect that Scheidt also fails to mention that we pay taxes on our CPP. Nor would he note the OAS, which is run by the same folks who administer CPP and gives us a bit more income. Nor might he mention that upon the death of a spouse, we also collect half of his or her CPP benefits for the rest of our lives.

I did enjoy reading the above article, though. The Scheidt spam showed up in my email today so I wanted to find out more about it. Thanks, Gumshoe!

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Gabriel
Guest
Gabriel
November 1, 2016 7:30 pm
Reply to  frank

He is suggesting that investors buy the exact same stocks that are held by the Canadian Pension Fund in the same proportions that their fund’s assets are allocated, to the extent that they are able to. This makes sense not just because it is a conservative portfolio designed to generate stable income for many decades to come, but also because such a massive national investment plan will inevitably drive up the prices of the securities it invests in, especially over the long-term, which will be the natural economic result of the increasing demand that the fund will create for stock in those companies, and that should considerably increase the total return for Scheidt’s subscribers over the long-term. This is even more true since the pension plan and its portfolio have been relatively newly established, and because Canada expects the size of this already very large portfolio to more than double within the next couple of decades. A forty year old person who “piggybacks” on the Canadian pension fund by mimicking their portfolio will almost certainly earn more from their investments by the time they reach retirement age than they would have from U.S. Social Security, if they make the same contribution to their new “piggybacked” investment fund that they are required by law to pay in tax to the U.S. Social Security Administration. In that way, Zack’s strategy is actually quite sound, and probably worth a reasonable fee that a typical broker might charge. He would certainly be worthy of great merit if he were teaching this strategy to the public for free. Essentially what he is suggesting is the voluntary privatization of Social Security by those who have the means and the knowledge to do so, by letting the Canadian government do your investment research for you for free and investing your own money according to the Canadian government’s recommendations, which is a proposal that is certainly worthy of consideration and which is likely to benefit those who are willing and able to implement such a strategy, although there would be diminishing returns for late-comers, and a bubble could form if hundreds of millions of people all decided to “piggyback” on the same strategy.

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Gabriel
Guest
Gabriel
November 1, 2016 7:58 pm
Reply to  frank

As a Canadian, you could also benefit from this strategy that Zack is recommending and that Stock Gumshoe has done a good job explaining and evaluating by investing your money in the same dividend stocks that your government is investing in for the Canadian Pension Fund. In doing so, you could more than double your retirement income if you invest the same amount in these stocks as you pay in tax for your Pension Fund, especially since you would not have to pay for all the bureaucracy that your Pension Fund surely entails (costs that are deducted from your taxes before they can be invested in your Fund), and since your Pension payments has a maximum payment limit that is more likely to be surpassed by the income from the Fund’s investments than for the Fund to have shortfalls (assuming the fund is well-designed), since consistent budget shortfalls in the Pension Fund would ultimately lead to a reduction in the Pension Fund’s payments even if minimum payments are guaranteed by law. You could even more greatly increase your total returns by saving up cash during macro-economic downturns when the market hits a ceiling (as it appears to have now, and as it did in 2008 and 2001), and then buying up the same stocks that the Canadian Pension Fund holds in the same proportion that their investments are allocated, beginning when the market bottoms and continuing to accumulate stock until the market reaches its peak, assuming you can roughly identify the market tops and bottoms, which is not easy, but which may be approximated using longer-term 200 week moving average crossovers. This strategy of accumulating stock at the bottom and either selling or holding stocks from the peak through the trough of the downturn is described in Bill Graham’s world-renowned book “The Intelligent Investor”, as is the strategy of owning a diversified portfolio of value stocks that pay very consistent dividends over many years. The latter diversified dividend stock portfolio strategy can be accomplished either by analyzing the stocks yourself, or paying a broker to do that for you, or buying a value stock ETF and paying the associated fees, or as Graham suggests for those who do not want to pay a broker or ETF fees and do not have the time/skill/inclination to analyze the stocks, you could “piggyback” on a reputable diversified mutual fund or ETF that focuses on value/dividend stocks by mimicking their portfolio’s allocations, or better yet, you could “piggyback” on an even more reputable and probably better researched fund: the Canadian Pension Fund. Zack deserves credit for promoting this strategy, but some criticism is also warranted for using confusing and somewhat misleading language in his pitch, and for overcharging for his advice regarding this strategy when the Canadian government has done most of the work for him

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Billy walsh
Billy walsh
November 24, 2015 7:37 pm

Iam wondering if anyone heard about the NET GREST ROYALTY COMPANY .steve from Daily wealth talks about it like its the best thing to get into. Who is this company and is it that good.

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BBURT
Guest
BBURT
December 2, 2015 6:27 pm

Sheesh, these kinds of ads are why I always do a search now for commentary. There is no other way (really) to look at the ad than that it’s misleading as ‘heck’. I read it over and over and …. well, I used to write ad copy for a living….. the ad just lies.

Sincerely….thank heaven for the Gumshoe.

Lavern Pritt
Guest
Lavern Pritt
December 16, 2015 12:34 pm

Excellent commentary , I loved the info – Does anyone know if my business can locate a blank DoL EE-2 form to type on ?

Greg
Guest
Greg
December 31, 2015 2:02 am

Thanks for writing this. As always, if it sounds to good to be true, it probably is!!!!!!!!!

Alvin Williams
Guest
Alvin Williams
January 13, 2016 10:55 am

I received Scheidt’s package on Piggybacking Canadian Social Security and the red flags went up immediately. Glad I read your report to assure I wasn’t missing out on a good thing. I have invested in many $119 and $49 dollar easy money newsletters that ultimately in up in the trash. I’ll take my chances with Bitcoin and silver for now.

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D. Oscarson
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D. Oscarson
January 26, 2016 6:18 pm
Reply to  Alvin Williams

Stick with silver. You won’t be disappointed. Most of these get rich packages are pure nonsense.

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Gabriel
Guest
Gabriel
November 1, 2016 8:11 pm
Reply to  Alvin Williams

It’s not necessarily a bad deal if he is offering this advice for $50. You’d be hard-pressed to find a broker who would build you a well-diversified portfolio that would be highly likely to pay you more than your social security check for the rest of your life regardless of market upswings and downswings, as a portfolio that “piggybacks” on the Canadian Pension Fund probably will. Let me explain… He is suggesting that investors buy the exact same stocks that are held by the Canadian Pension Fund in the same proportions that their fund’s assets are allocated, to the extent that they are able to. This makes sense not just because it is a conservative portfolio designed to generate stable income for many decades to come, but also because such a massive national investment plan will inevitably drive up the prices of the securities it invests in, especially over the long-term, which will be the natural economic result of the increasing demand that the fund will create for stock in those companies, and that should considerably increase the total return for Scheidt’s subscribers over the long-term. This is even more true since the pension plan and its portfolio have been relatively newly established, and because Canada expects the size of this already very large portfolio to more than double within the next couple of decades. A forty year old person who “piggybacks” on the Canadian pension fund by mimicking their portfolio will almost certainly earn more from their investments by the time they reach retirement age than they would have from U.S. Social Security, if they make the same contribution to their new “piggybacked” investment fund that they are required by law to pay in tax to the U.S. Social Security Administration. In that way, Zack’s strategy is actually quite sound, and probably worth a reasonable fee that a typical broker might charge. He would certainly be worthy of great merit if he were teaching this strategy to the public for free. Essentially what he is suggesting is the voluntary privatization of Social Security by those who have the means and the knowledge to do so, by letting the Canadian government do your investment research for you for free and investing your own money according to the Canadian government’s recommendations, which is a proposal that is certainly worthy of consideration and which is likely to benefit those who are willing and able to implement such a strategy, although there would be diminishing returns for late-comers, and a bubble could form if hundreds of millions of people all decided to “piggyback” on the same strategy.

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Gabriel
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Gabriel
November 1, 2016 8:52 pm
Reply to  Alvin Williams

You’d be hard-pressed to find a broker who would make a portfolio of that quality for that price, is what I intended to say. Most brokers can make a decent value-stocks and bonds portfolio, but most would charge quite a lot more than $50 to create and manage such a portfolio. The good news is that you don’t have to pay $50 for Zack’s strategy. You can invest in a value portfolio that mimics the Canadian Pension Fund simply by looking up their the Pension FUnd’s portfolio allocations and copying them in your own portfolio, by saving as much every month as your social security tax is/was for a typical month, then buying up stocks in the same proportion as the Canadian Pension Fund owns those stocks when the market bottoms or when during a market upswing, and then either maintaining your portfolio’s holdings through the downswing, or employing a higher risk and potentially higher reward strategy by attempting to sell your holdings at the market top and reinvest at the bottom, which you could accomplish by using a long-term, 200 week moving average crossover technical indicator as a trade-trigger, combined with relevant macroeconomic fundamental data such as corporate earnings, GDP, manufacturing/trade data, corporate/household bankruptcy data, national/corporate/household debt/income ratios, etc. It is safer just to hold value stocks through the downturn though, because there is considerable risk of opportunity-cost that you would incur if you sold early and then had to reinvest later at a higher price rather than a lower price because what you thought was a market top turned out to be just a minor pullback. Selling early before a market top also generally has a worse outcome with value/dividend stocks than with growth stocks because value/growth stocks usually keep paying at least some dividend even in a downturn, and that help minimize drawdowns and volatility. However, even with value/growth stocks, it is not advisable to keep buying at a major market top or during at least the first half of a major downturn due to the rapid price declines that result in considerable capital depreciation, and because by saving your money during these stages of the business cycle and waiting closer to the market bottom to buy value stocks will increase the dividend yield substantially (a 30% correction in the value stocks’ price would increase their dividend yield by 42%, if the dividend remains the same or eventually resumes its former rate soon after the correction, while a 50% price decline would double the yield).. I mention this because the market is currently showing similar technical and fundamental topping signals to those it showed during 2008, in my opinion and the opinion of many other smart people, so it might be wise to wait till either the technical uptrend resumes or corporate earnings and global GDP resume their uptrend, or until the market corrects and potential dividend yields increase towards their peak when the market approaches its bottom. The suggestions I’ve given here about creating a value/dividend portfolio by piggybacking off of / mimicking a reputable ETF/Mutual Fund/Pension Fund are explained in greater detail in Bill Graham’s “The Intelligent Investor”, while the trend following strategy I described and many others are explained in Andreas’ Clenow’s “Following the Trend”. I am not a licensed investment advisor, nor do I work for any advisory or newsletter service, so don’t take my advice. Read these two books and make your own decisions.

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Mark
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Mark
January 31, 2016 10:44 am

I believe (TWO) is a good stock to add for this kind of investing,, however it better be in a Roth or you have to pay taxes on your dividends. Travis Thanks for explaining this sort of stuff.

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Wes
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Wes
February 1, 2016 8:00 pm

Thanks.I won’t lose any $ on Canadian SS

Wes

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