“Safe Harbor Savings Accounts” — How to Sit Back and Become a Millionaire

By Travis Johnson, Stock Gumshoe, November 25, 2008

Does this ring a little bell for you? It might, if you’re a careful reader of every Gumshoe article (and why wouldn’t you be, really?). This ad is almost exacly the same as one that I wrote about back in October — an investment that is super safe, on the bargain rack, and, perhaps most exciting for folks, is not a stock.

Neither is it a “savings account,” of course. These “Safe Harbor Savings Accounts” are exactly the same thing as “Safe Harbor Investment Covenants.” I don’t know why they changed the fake name — perhaps “covenant” was too fancy a word to draw in the great investing unwashed, or maybe the connotation was too creepy when a newsletter edited by a guy named Christ was selling false “covenants.”

So, for your convenience, I’m republishing that note from last month below — and I think I changed all the “investment covenants” to “savings accounts” below, but I haven’t changed the article otherwise. If you’d rather read the original, you can click here to see it, along with the dozen or so insightful comments from fellow Gumshoe readers.

Today’s ad that will receive the Gumshoe treatment is for Steve Christ (no relation, I assume) and his Wealth Advisory newsletter … and yes, like so many others these days, it is focused on words like “safety” and “guaranteed.” Exactly the tonic that the panicked investor demands.

Now, this particular newsletter will only run you $79 a year, so you can go ahead and subscribe if you feel like it — as with so many of these “introductory” newsletters I assume they also use it as the target of constant upgrade offers for their more expensive services, but that doesn’t mean it isn’t any good.

But if you just want to figure out what a “safe harbor savings account” is, well, you’re in the right place — just read on, it won’t cost you anything.

First, let’s see how they “sell” this idea …

“I made an average of 28.2% profits without investing in a single stock… and by taking advantage of
tax-free investments that provide guaranteed return of principal.

“URGENT: In the next few moments, you’ll learn why it’s critical you use this tool – starting today – to safeguard your wealth from its two greatest threats: another market crash…and excessive taxation by the U.S. Government.”

It sounds pretty good, no? It gets better, just you wait …

“This powerful – but often overlooked – investment vehicle not only allows you to grow your wealth, but it also allows you to…

“Keep your money out of the U.S. Government’s hands by taking advantage of tax-free investments…
Earn both a steady stream of income AND a high rate of return…

“Rest easy with the knowledge that, in many cases, you’ll be taking advantage of investments where the principal is 100% guaranteed.”

So I know you’re asking, “where do I sign?” Give me a moment here, I’m just getting started!

Tongue firmly in cheek, one assumes, Steve tells us about the one “catch” …

” … in order to take advantage of this powerful investment vehicle, you must be willing to stay away from potentially dangerous investments like stocks or mutual funds.”


And he makes the point over and over that Warren Buffett, Bill Gross, and Wilbur Ross are all invested in these “savings accounts” — and if all those smart, rich guys do it, it must be good … no?

Lots of quotes from newspapers, too, to give this newsletter a little touch of their gravitas …

“The Wall Street Journal reported that ‘large investors are snapping up these investments.’

“‘Investing in (Safe Harbor Savings Accounts) is a no-brainer,’ according to the Washington Post.

“Forbes said that Safe Harbor Savings Accounts are ‘the non-volatile safe haven where investors can get a stable and reasonable return with little risk.’

“The Minneapolis Star-Tribune called Safe Harbor Savings Accounts ‘dependable and tax-free to boot,’ while the Milwaukee Journal Sentinel summed it up this way: ‘Amid the stock market’s turbulence… an island of calm.'”

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So what are we dealing with here?

You guessed it: Municipal Bonds.

Sounds a little less sexy than “safe harbor savings accounts,”