The Biggest Rip-offs You’re Probably Unaware of

stop the rip off stamped next to some common purchases which are rip-offs

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Being a marketer for over a decade has shed light on the many ways that we can be fooled in life.

I have become acutely aware of the ways we are tricked into believing we are receiving a good deal.

Here are the top rip-offs and some tips to avoid them in the future.

1. Cars

a man selling a car to a couple in a cap

Have you ever had anyone come up to you and say they didn’t get a good deal on their new car? It’s almost unheard of.

Everyone thinks they got a good deal on their car.

But if everyone gets a ‘good deal’, no-one gets a good deal. There must be winners and losers.

The reason it’s so easy to get ripped off when buying a car is because everyone walks away from their latest car purchase thinking they got a great deal. The sales reps are experts at creating this illusion.

People will celebrate getting $5,000 off the list price and walk away happy, not knowing there was easily an extra $10,000 in margin the dealer was playing with.

Here are three ways to get a good deal on a car:

  1. Realize you are not the master negotiator you think you are. The best way to negotiate is to pit dealers against themselves. You do that by using services like or Dealers submit bids for the car of your choosing – simply choose the best bid.
  2. Buy in cash, not on finance. Car payments (and the absurd interest) are an enormous drain on many people’s finances. Avoid this if you can.
  3. Buy used. If you cannot afford a car outright, a used car is the financially prudent option. You are prevented from eating the horrible depreciation new cars come with.

But the real reason cars are a bad deal is the sheer cost of buying a car in general.

A $10,000 car does not simply cost $10,000. You have to consider what that $10,000 could have been used for.

This is known as the opportunity cost.

If you had invested that $10,000 in a low-cost passive index fund over 30 years, at 8% interest, it would be worth is $109,357.30.

How about a $100,000 car? That money invested over 30 years, at 8% interest, is $1,093,572.97.

Most people need a car – we’re not saying don’t buy one. But do understand the true cost of a car is what you could have done with that money instead.

2. Financial services  & advisors

man in a suit holding cash

The financial services industry is rife with scams. Just some examples include:

  • Active investment managers. They overcharge and underperform.
  • Financial advisors. The bad ones are usually just middlemen, taking a cut of extortionate investment products. They can offer great advice for high net-worth individuals.
  • Fees, fees, and more fees. Hidden fees, packaged products, trading fees. Small fractions of a percentage of your annual portfolio can add up to hundreds of thousands or even millions of dollars in fees over your lifetime. Read about fees here.
  • Picking stocks. Statistically a losing game, even for the professionals.

It seems logical, maybe even sensible to say, “I don’t know enough about investing and finance, I should pay a professional for help”.

But investing is the one arena where you do not get what you pay for.

For the vast majority – the 99% – you will pay extortionate amounts for mediocre performance at best. Why?

  1. It’s expensive to be a financial advisor. One chartered professional in the UK says it costs him more than $1,500 to take on a new client. That’s money they need to extract from you, somehow.
  2. They need to justify their high fees. They do this by recommending complex, actively managed products that, as we see from the links above, perform poorly and cost dearly.

Here’s the secret.

Everyone in the industry knows that 99% of people would be best off using a low-cost passive index fund and doing it themselves. But it’s so laughably easy to do, you can’t charge $1,500 dollars for that.

One of the best investors in the world, Warren Buffett, agrees it is the right strategy for most.

Remember, the only person that truly cares about protecting and growing your wealth is you. You must learn how to manage your finances yourself, or you will be taken advantage of.

Find out about low-cost passive investing here.

3. Black Friday and other sales

woman holding black friday bags

This is a great tip of ours that got picked up by and other outlets.

No company is discounting their products to unprofitable levels out of the kindness of their heart.


If you’re buying a product in a sale, there’s a few reasons why:

  • It hasn’t sold because it’s not very good. The company is clearing the inventory for something better. You’re buying a mediocre product at best.
  • The company overpriced the product originally and is discounting down to reasonable levels.
  • Or worse, the company intentionally raised the price of the product before the sale, to make it seem like is a huge discount.

Now, there is the concept of ‘loss leaders’ whereby you sell a product at a loss in order to garner more attention and therefore sales from other products you sell, but that is a very specific case.

Most of the time, the good deals you see in sales events simply aren’t good deals at all.

The solution? Use price tracking service like to check the cost of products on Amazon over time.

Even if you don’t intend to buy on Amazon, you can see use it to see just how cheap something has been in the past.

4. College & University

college graduates throwing their caps in the air

I went to University, and it was one of the best times of my life, and I learned a lot. I was lucky and got a job after University.

Fees in the UK have risen since I went to University to unjustifiable levels, and they are still not close to the heights of fees in the US.

To ask a 17-year-old to go into debt, possibly for the rest of their life, in exchange for a few years of education (in something they may not want to pursue their whole life) is egregious.

The reason this is so bad is that there is no possible way a 17-year-old can understand the implications of their decision.

Most adults do not understand the nature of compound interest, inflation-linked loan agreements and income-dependent loan payments.

A 17-year-old has no chance.

There is no way they can give informed consent here. They are simply too young & too naïve.

The key reason is that our education system is woefully inadequate when it comes to financial education. We leave school ill-equipped to enter a world dominated by money.

But perhaps more importantly, nowadays, I do believe you can get a better education outside of College & University using freely available (or MUCH more affordable) information elsewhere.

A lifetime of debt is no longer necessarily the best option for our teenagers.

At the very least, I recommend taking a gap year and using that time to think, to mature, and to make absolutely sure going to college is the right decision for your future.

5. Funerals and caskets

a casket with flowers on top of it

Hearing that people have gone into debt to pay for a funeral is a painful thing.

I would be mortified if my family was out of pocket just to put me to rest in a way society deems normal.

There are ways to honor the dead without spending thousands and thousands of dollars. I understand religion may dictate things, but not in all cases.

Why are we so easily taken advantage of in these situations? A few reasons, I speculate:

  • We perhaps overlook the cost as the estate of the deceased may cover some or all of the cost of the funeral.
  • We may overlook the cost as we are grieving, and we don’t have the capacity to question it.
  • We may overlook the cost as we feel guilt for questioning the cost, as if it may look like we don’t think the deceased is ‘worth it’.

Honoring the dead with a reception is certainly a worthwhile, natural, maybe even necessary part of the grieving process.

But spending thousands of dollars on a casket, a plot of land, and everything else that comes with a traditional burial, perhaps is not.

This somewhat macabre topic is one we shy away from, but we need not. It is a natural part of our existence.

I would be happy skipping the casket, personally. Spend more money on the party instead!

6. The Lotto / Lottery

a lottery ticket

It should go without saying that the odds of winning the lotto are astronomically small. But that doesn’t stop people from trying.

If our brains could truly comprehend large numbers I am convinced that no-one would pay the lotto.

Sadly, our brains only evolved to be able to comprehend numbers up to a few hundred.

That’s typically as big as a human tribe ever grew to. We had no need to be able to comprehend more than that number of things.

As a result, the difference between a million and 100 million is just not tangible to us.

So, when we hear that the odds of winning the Lotto are 1 in 292.2 million, it means less than nothing to us. Instead, people default to the logical fallacy, “well, someone has to win it don’t they?”.

Dave Ramsey gives a damning opinion on the lotto:

“The lottery is a tax on poor people and on people who can’t do math. Rich people and smart people would be in the line if the lottery were a real wealth-building tool, but the truth is that the lottery is a rip-off instituted by our government. This is not a moral position; it is a mathematical, statistical fact. Studies show that the zip codes that spend four times what anyone else does on lottery tickets are those in lower-income parts of town. The lottery, or gambling of any kind, offers false hope, not a ticket out.”

It is false hope that drives people to playing the lottery. Just for a moment, they get to fantasize about escaping their lives.

For some, it’s enough of a reason to play and enough of a reason to ignore the math & odds stacked against them.

But can you have your cake and eat it too? There might be a better way to spend your money and get the rush the lottery provides – without spending any money at all.

In the UK, ‘premium bonds’ are a safe way to save money with a savings rate of about 5%. When you buy premium bonds, you are buying tickets to the draw that happens once a month.

However, it’s luck of the draw regarding the level of interest you get – with some winning prizes of up to £1,000,000 ($1,250,000).

It doesn’t exist in the US yet, but when it does come (I believe it will) it will be enormously popular.

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