The other side of the scam
We were in the mountains of Laos.
I was at a cockfighting joint playing pétanque with our tour guide, Minh.
Think lawn bowls, except the floor is dirt, the air is full of smoke, and everyone is drinking cheap whisky from recycled bottles. K-pop blares on a distorting Temu speaker.
I was losing. Badly. The locals were laughing at me, but they were blind drunk.
So, screw them.
Minh told me he used to come here with a mate … but then his mate’s life took a dark turn.
He was a rice paddy farmer who scratched out US$200 a month. It was hard, honest work. One day he showed Minh a Facebook job ad that promised US$2,000 a month doing “online sales” in the Golden Triangle Special Economic Zone, up in the north of Laos.
“Be careful”, Minh warned him.
Indeed.
I know the other end of that ad. My inbox is full of it.
These days a $100,000 scam loss barely makes the column. A few weeks back I wrote about a retired suburban accountant who got taken for $5 million. The scammers pig-butchered him. They fattened him up for months, then went after the lot.
So, who was the scammer on the other keyboard?
It could have been Minh’s mate.
Or it may have been Ava.
I know her name because she lived to tell it – on a podcast called Escaping Scam City. She and her husband Micah were a young couple from the countryside, stone broke after Covid, trying to feed the kids. They answered a Facebook ad for well-paid customer service in Cambodia.
The recruitment looked legit. There were Zoom calls, resumé checks. Finally the offer came and Ava got on a bus. The young mum quickly worked out that something was very, very wrong. She messaged Micah and told him not to come. He came anyway, hoping to bust her out.
Their passports were confiscated. Their phones were taken. They were held against their will in a massive compound with bars on the windows and made to work sixteen-hour days running scripts, gaining the trust of people like that accountant until all their savings were stolen.
Miss the quota and the bosses beat you. Micah said some workers were beaten so badly they were left permanently disabled, their eyes like goldfish. Others could not face another day of what they were doing and jumped from the high-rise.
Heavy, right?
Well, as you read this right now, there are still young people held prisoner in these compounds.
Hundreds of thousands of them.
The UN has labelled it a world humanitarian crisis.
So why isn’t someone coming to save them?
Because money talks. Cambodia’s scam industry has been estimated to make up around half the country’s official economy.
In other words, the crooks have more money, and more power than the governments of the places they scam in.
Seriously, they really do. In 2024 Laos gave a ‘national development medal’ to the Chinese crime lord who holds the 99-year lease on that Golden Triangle zone, for his “contributions to the economic and social development of Laos”.
Ava was locked in that scam compound for seven months. When she got out, a court gave her forty months. For being a scammer. Meanwhile the men running these compounds are making more money than Al Capone ever did. In plain sight.
I asked Minh how it went for his friend.
He shook his head.
“Not good. He lost his rice paddy. He lost his wife. He lost everything.
“We are a Buddhist country. I worry for his soul.”
Tread Your Own Path!
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The Most Important Advice
My Son Is a Car Crash
The Most Important Advice
Hi Scott,
After working our arses off over the past 20 years, my husband and I have sold our business and have enough cash to pay off our mortgage, fix up the house, and have a million (plus!) in the bank.
We have been very frugal over the years and followed your Buckets advice. We now have more than we really know what to do with. We could currently live off the interest we are making, and the conservative side of me is satisfied by that!
We have spoken to a financial adviser about helping us invest in a portfolio (a whole list of things that I don’t really know much about). The adviser has also tabled the idea of leveraging our mortgage and using debt for part of the investment.
I understand the rationale, but there’s a part of me that thinks ‘simple is better’. Any advice here? I know investing is taking on some risk, but I also don’t want to lose what we have earned.
Helen
Hi Helen,
I’m waving the chequered flag.
You two have won the money game!
Most people crash and burn. Others limp to the finish with the muffler dragging behind them, but you made it. So let’s talk about your victory lap.
Your adviser is right that borrowing to invest can work over a long stretch. The interest can be tax deductible. The shares can compound. Yet it’s also true that debt makes your life more complicated – especially when the market falls, which it will.
Now if you were one of those people who loves ‘leverage baby’, we’d be having a different chat. But you’re not. So we won’t.
Truth is, for a lot of advisers, complexity is job security. The more moving parts they bolt onto your money, the more likely you will keep paying them every year to mind the machine they built.
Now the hill I will die on, after over two decades of being Barefoot, is to keep things simple. Life is already complicated enough. The most sophisticated money plan is the one you can explain in 30 seconds.
What would I do in your shoes?
Kill the home loan. Do the renovation. Leave a fat Mojo buffer. Invest what’s left in cheap index funds, inside and outside super, and leave them alone.
You have won the race Tammy, it’s now time to collect your trophy. And the trophies are people, experiences and time. Not racing for more money.
My Son Is a Car Crash
Dear Scott,
I’m one hour into a five-hour drive to Canberra to pick up my 29-year-old son. He’s been on a downward spiral for months – drugs, raves, broken relationship – and last night he had a wake-up call. Thankfully he’s OK, but his car still sits wrapped around the gumtree that he drove into after losing control. I can help him pick up the pieces emotionally and psychologically now that he’s admitted that he needs family to help him through it. But how do we work through his financials? Coming home, he has no job and owes money on his car (he wasn’t insured). Where do we start?
James
Hey James,
Today is a good day.
There are plenty of parents who get that call and they’re planning a funeral, not asking me about the financials. You get to wake up from the nightmare and hug your son.
His money problems are usually the symptom of what’s going on in his head. So get him the support he needs first. A psychologist. Whatever it takes.
The financials are the straightforward part.
After that, he needs to see a financial counsellor. The number is 1800 007 007. It’s free and confidential, and they won’t judge him. They’ll deal with the lenders and the debt collectors so his phone stops ringing. They’ll look at the car loan on the written-off car. Creditors know they can’t get blood from a stone. Sometimes that means a hardship arrangement. Sometimes a full and final payment. Sometimes the file just sits there. The counsellor will know which one fits. That’s their job!
Now, the thing that decides whether he’s still living with you when he’s 35 is whether he can rebuild his self-respect. Right now, he’s blown up his life, lost his partner, and is cutting a 30th birthday cake in his old bedroom. That’s a hard place to live from.
Most of the clients that I see are ashamed of where they’ve landed. They feel like failures. They hate themselves, so the same cycle keeps repeating.
This is what I tell them.
You are not your past. That version of you is gone and it’s not coming back.
You are not the voice in your head at 3am. We all beat ourselves up.
You are your next action.
He can get help from a psychologist. He can then sit down with a financial counsellor and take responsibility for the mess. He can get a job, preferably one that puts him outside in the sunshine for a stretch, and start putting the pieces back together.
He needs you to hold him to those steps. He also needs to know you still believe he can take them. That’s your job now. Love him, and don’t let him off the hook.
Today is a good day.
Thanks for reading,
Scott