Ken Ham’s “Ark Encounter” Sinking Under the Weight of Heavy Lies?

In the ongoing drama that is Ken Ham’s halting and sadly hilarious attempt to get the Kentucky state government to fund his creationist propaganda debacle, also known as “Ark Encounter”, time and time again it seems that he cannot avoid both controversy and the law. Now it seems as if Ken Ham and his Answers In Genesis organization (the creationist parent organization of both the floundering Creationist Museum and Ark Encounter) are mired in even more controversy: they apparently lied about the number of people who would be attending the new park attraction when they applied for an $18.25 million tax rebate through the Kentucky Tourism, Arts and Heritage Cabinet.

Americans United for the Separation of Church and State has more details…

Boatload Of Lies: Ark Encounter Gave Ky. Officials Inflated Attendance Projections

Americans United has long been skeptical that Ark Encounter, a proposed theme park in Kentucky that will feature a 510-foot replica of Noah’s Ark, could ever live up to the enormous projected attendance figures claimed by its leadership in order to secure public assistance. As it turns out, the numbers submitted by Ark Encounter were indeed wildly inflated. …

… Now, thanks to an open records request by Ed Hensley of the Kentucky Secular Society, we know that AiG was less than truthful in at least a portion of its application. Ark Encounter claimed it would have 1.2 to 2 million visitors annually. This included an estimate of over 1.6 million visitors in the park’s first year.

But the reality is nowhere near that high. Kentucky sent AiG’s application out for review, and Hunden Strategic Partners in Chicago determined that if the Ark Park remained a purely religious attraction, it would generate about 325,000 visitors its first year, rise to 425,000 in its third year and eventually fall to 275,000 by its seventh year in business. This would mean the Ark Park could create about 514 jobs, Hunden said.

Were AiG to pursue “a mainstream approach to the attraction,” Hunden estimated it could draw just under 500,000 visitors in year one, 640,000 visitors in year three, then drop off to about 400,000 by year seven. Hunden estimated 787 jobs would be created if that scenario played out. … [emphasis added]

At this point, one might think the claim that Ham and AiG were lying is overly harsh, but then there are more details that have been revealed which seems to lend credence to the claim of outright lying (or even fraud). It ends up that there was a potentially huge conflict of interest between Ham and the firm which generated the initial (and wildly inflated) attendance estimates…

… Hunden also noted that AiG’s estimate was provided by the South Carolina-based America’s Research Group, which has ties to AiG head Ken Ham.

“The president of America’s Research Group is Britt Beemer, who is also a co-author with Ken Ham on the book Already Gone,” Hunden said in its report. “Furthermore, research by Beemer and America’s Research Group is featured in Already Compromised, another book authored by Ken Ham.” …

Wow. At this point, I’ll let the reader decide on whether or not the state of Kentucky made a good decision to not award the tax rebates to AiG. It seems that Ham isn’t above skirting both ethics and the law to “do the Lord’s work” in an attempt to get his hands into the public coffers – whatever happened to him being an honest Christian?

Ken Ham’s Ark Encounter Gets Torpedoed by Kentucky State Government

Imagine my surprise when I found out today that my home state of Kentucky, which I often refer to as the “buckle of the Bible Belt”, actually took a firm stand in favor of church-state separation! Today the state’s Tourism, Arts, and Heritage Cabinet informed uber-creationist and all-around pseudo-scientist Ken Ham that his over-budget and under-delivered Ark Encounter will NOT be receiving the tax breaks he has so long sought from the state government (which he really needs due to the questionable financial situation of his endeavor).

Why has this happened? Because Ken Ham thinks that anti-discrimination laws shouldn’t apply to his organization in the hiring of employees (he wants to force employees of an organization which receives public money to sign the Answers in Genesis “Statement of Faith”), and the state has decided (wisely) that that is going too far and would be a clear violation of separation of church and state. So, they’ve closed the door on ol’ Ham and his ruse.

The local KY media are weighing in; this from the Courier Journal…

Ark park won’t get Kentucky tax incentives

A proposed Noah’s ark theme park in Northern Kentucky has been turned down for around $18 million in state tax incentives amid concerns that it will promote religion and violate the separation of church and state.

But the group behind the project — Answers in Genesis — says it is considering legal action in federal court.

The state Tourism, Arts and Heritage Cabinet said in a letter Wednesday that the Ark Encounter theme park has changed it’s position on hiring policies since it originally filed for incentives in 2010 and now intends to discriminate in hiring based on religion.

It also said the park has evolved from a tourist attraction into an extension of the ministry activities undertaken by Answers in Genesis, which promotes a literal interpretation of the Bible’s old testament and argues that the Earth is only 6,000 years old.

“State tourism tax incentives cannot be used to fund religious indoctrination or otherwise be used to advance religion,” Tourism Secretary Bob Stewart wrote in the letter. “The use of state incentives in this way violates the separation of church and state provisions of the Constitution and is therefore impermissible.”

Officials will “take no further action” on the application, he said.

Of course, what is Ham’s reaction? Why, he’s threatening legal action, because – in his alternate reality – he thinks that his organization should be allowed to both collect public money and discriminate on the basis of religion (or non-religion).  In other words, he wants to have his cake and eat it, too. Sorry, Ken, it doesn’t work that way:

But, Alex Luchenitser, associate legal director for Americans United for Separation of Church and State, said it’s unlikely a lawsuit could succeed in federal court.

He said the U.S. Supreme Court has made clear that states can deny taxpayer subsidies to religious groups if officials are concerned that funds will support religious activities.

“Kentucky is doing the right thing and is respecting the rights of taxpayers to not be forced to subsidize religious indoctrination and discrimination,” Luchenitser said. “The state is also respecting the fact that jobs that are going to be supported by state subsidies must be open to all.”

I’m sure this ongoing drama won’t stop here; it will likely take Ham and his creationist allies getting smacked down by the courts, multiple times, before they give up this lost cause.

As a final comment, it is with no small amount of irony that I share the fact that in recent days, Ham’s Answers in Genesis organization started a billboard campaign mocking those who would question his grasp of the law. Here’s what the billboard looks like:

Interesting… according to the mythology, Noah didn’t need a crane to build the Ark, did he? — Image source

My response to Mr. Ham: “intolerant liberals” may not be able to sink that ship, but it seems that the Kentucky state government just did a pretty thorough job of torpedoing any hope for those tax breaks.  As the Biblical saying goes: “Render unto Caesar that which is Caesar’s”. It looks like right now Caesar is saying “no dice” on the tax breaks! 😀

Ken Ham’s Ark Encounter Runs Aground on Kentucky Anti-Discrimination Laws

As I have documented many times before, uber-creationist Ken Ham has been trying to get a new attraction built named Ark Encounter (which is Ham’s version of the mythical Noah’s Ark) that would boost lagging attendance at his Creation Museum.  And he’s been trying to get the state of Kentucky to fund this misadventure with public dollars and tax breaks, with varying degrees of success; though, sadly, up until this point the KY officials have appeared all-too-willing to accommodate Ham.  If you want to read the full background on this slow-motion train wreck – and the various scientific and church-state issues it raises – feel free to read here, here, and here.

What I want to focus upon in this latest post is a new and highly troublesome wrinkle in Ham’s plans to pull the wool over the eyes of Kentucky public officials.  It seems that Ham billed Ark Encounter as a for-profit venture while also simultaneously seeking tax breaks and other goodies from the public trough; however, because Ark Encounter is under the auspices of Ham’s Answers In Genesis creationist organization, he appears to want to force any potential Ark Encounter employees to sign on to the Answers In Genesis “Statement of Faith”.

According to this New Civil Rights Movement article, this statement would require of Ark Encounter employees:

Indeed, as The New Civil Rights Movement reported, Daniel Phelps, the president of the Kentucky Paleontological Society and vice president of Kentuckians for Science Education wrote an op-ed in which he details the issue. “On the day the tax incentives were recommended, the Answers in Genesis website had a help-wanted advertisement,” Phelps explained.

The job description included this statement: “Our work at Ark Encounter is not just a job, it is also a ministry. Our employees work together as a team to serve each other to produce the best solutions for our design requirements. Our purpose through the Ark Encounter is to serve and glorify the Lord with our God-given talents with the goal of edifying believers and evangelizing the lost.”

Ham claims that the Ark museum will be run separately and differently from the Creation Museum.

But job postings at Answers in Genesis include this statement: “All job applicants for the non-profit ministry of AiG/Creation Museum need to supply a written statement of their testimony, a statement of what they believe regarding creation, and a statement that they have read and can support the AiG Statement of Faith.”

The AiG Statement of Faith claims “it is imperative that all persons employed by the ministry in any capacity, or who serve as volunteers, should abide by and agree to our Statement of Faith, to include the statement on marriage and sexuality, and conduct themselves accordingly.”

It also requires all employees to believe and support “the proclamation of the gospel of Jesus Christ as Sovereign, Creator, Redeemer, and Judge,” and the “66 books of the Bible are the written Word of God. The Bible is divinely inspired and inerrant throughout. Its assertions are factually true in all the original autographs. It is the supreme authority in everything it teaches. Its authority is not limited to spiritual, religious, or redemptive themes but includes its assertions in such fields as history and science.”

And that’s just for starters.

Whoops – that’s a real legal no-no.  It’s so much of a legal no-no that now, finally, those public officials in Kentucky who have been so willing, up to this point, to give a wink and a nod to Ken Ham and his creationist nonsense can no longer turn a blind eye to his shenanigans.  This Courier-Journal article outlines some details:

“The Commonwealth doesn’t believe that Ark Encounter, LLC will be complying with state and Federal law in its hiring practices,” Bob Stewart, secretary of the Kentucky Tourism, Arts and Heritage Cabinet, said in an Aug. 27 letter to an Ark Encounter attorney.

Stewart wrote that “serious concerns” were raised by a job posting for an Ark Encounter position that required applicants to provide salvation testimony, a creation belief statement, and agreement with the “Statement of Faith” of Ark Encounter’s parent organization, Answers in Genesis.

“Therefore, we are not prepared to move forward with consideration of the application for final approval without the assurance of Ark Encounter, LLC that it will not discriminate in any way on the basis of religion in hiring,” Stewart wrote.

James Parsons, a Covington attorney representing Ark Encounter, responded to Stewart saying that the job posting that triggered Stewart’s concern was not for Ark Encounter, but Answers in Genesis.

Parsons wrote that Ark Encounter stands by its longstanding commitment to “comply with all applicable federal and state laws” on hiring and said that Stewart was adding a new requirement to Ark Encounter’s application for tax incentives.

Not so, Stewart replied Sept. 4. “The Commonwealth does not provide incentives to any company that discriminates on the basis of religion and we will not make any exception for Ark Encounter, LLC…” Stewart wrote. “The Commonwealth must have the express written assurance from Ark Encounter, LLC that it will not discriminate in any way on the basis of religion in hiring.”

That last communication between KY officials and Ken Ham’s organization took place almost two months ago, and since that time there has been no written assurance from Ark Encounter that it won’t discriminate in hiring on the basis of religious beliefs.  Now why would that be?  Well, the Americans United for the Separation of Church and State have an idea, and I think it’s a pretty good one, as to why Ken Ham has suddenly gone quiet on the question:

Alex Luchenitser, associate legal director for Americans United, said in a phone interview, “We’re pleased with this development. It sounds like the state of Kentucky has a policy of not providing tax incentives to organizations that discriminate and that the state is sticking to its guns in this.”

Luchenitser said he believes there is a reason that Ark Encounter does not want to provide an express assurance it will not discriminate based on religion in its hiring practices yet insists it will comply with all federal and state hiring laws.

“I think what’s going on here is that Ark Encounter’s position is that federal and state law allows them to discriminate in hiring based on religion — that they are entitled to an exemption from the federal and state anti-discrimination statutes that is afforded certain religious organizations. We think they’re wrong on that,” Luchenitser said. “… And we believe Ark Encounter is not entitled to that exception because it is a for-profit organization.”

In other words, it seems that Ken Ham wants to have his cake and eat it, too.  He wants to be able to make money off of Ark Encounter, thus labeling it “for-profit”, yet he also wants to use it explicitly as a way of spreading his fundamentalist religious beliefs, even to the point of forcing those beliefs on potential employees.  Of course, none of this surprises me, because once you understand that true-believers like Ham really do think they have God on their side, then any kind of behavior, no matter how underhanded or hypocritical, is acceptable in their quest to “save souls”.

Creation Museum’s Faith-Based Investment in “Ark Encounter” Appears to be Sinking

The saga of uber-creationist Ken Ham’s Creation Museum continues, and it isn’t looking good for him or his followers.  If you recall, Ham and his creationist organization Answers In Genesis (AiG) have, in recent years, gone all-in on an investment scheme to fund what they call a life sized replica of Noah’s Ark named Ark Encounter.  For years, I and others have reported on the continuing financial troubles and ethically questionable revenue sources for Ken Ham’s enterprise, and now things seem to only be getting worse for Ham, AiG, and the Creation Museum.

Ken Ham looking over his model of Ark Encounter… the irony is that, according to myth, Noah didn’t need lots of investment capital, the backing of the government, and huge construction teams to build his Ark. (image source)

Back in February, there was a big debate between Ham and Billy Nye the Science Guy at the Creation Museum; after the debate, Ham reported that this debate had brought in a huge amount of much-needed financial support for Ark Encounter and that construction would begin on the much publicized project in May of this year (after repeated delays due to insufficient funds).  At the time, I and others were skeptical, speculating that perhaps Ham wasn’t being completely truthful because while he said money was coming in, he didn’t provide any specifics.  This led me to believe that Ham was continuing his habit of not only bending (or breaking) the truth on issues of science but those of economics and finance as well.

Well, now it appears that the other shoe has dropped… as reported in June by Americans United for the Separation of Church and State, it seems that Ham is resorting to all sorts of shenanigans and obfuscation to give the impression that his enterprise isn’t sinking:

1) First, there’s the issue of the time-table on Ark Encounter continually being pushed back, at taxpayer expense…

The main problem with Ham’s overtly religious pet project is it seems to be a magnet for taxpayer dollars. First, Kentucky officials committed more than $40 million in tax incentives to the Ark Park. Sadly that was just the beginning. Later, the Kentucky legislature planned to spend $2 million on a road project in a rural area, seemingly for the sole benefit of the proposed Ark Park.

But even those generous incentives weren’t enough for misguided lawmakers. The city of Williamstown, which had already granted a 75 percent property tax break for the park, decided last year that it would sell $62 million in municipal bonds on behalf of AiG affiliates.

All told, various government entities in Kentucky have planned to give the Ark Park, which was originally supposed to cost about $175 million, an astounding $100 million (or more) in various types of public support. Recent reports, however, cast serious doubt on just how much of that money, if any, will reach the project.

It seems Ham’s ever-changing timeline has finally caught up with him. He said in January 2011 that work would begin on the Ark Park that spring; then in May of that year, AiG said groundbreaking would be over the summer; in June, AiG said construction would begin in August; and by early August 2011, AiG still had not broken ground but promised that it would happen “in the next few months.”

Then in late August 2011, AiG bumped the timetable way back, saying groundbreaking would begin in the spring of 2012. That did not happen, either.

2) Then there’s the problem of the expiration date attached to the public funding (the one smart thing the KY lawmakers did in this whole fiasco)…

Louisville’s LEO Weekly reported last week that the large tax incentive package promised to the Ark Park back in May 2011 by Kentucky’s Tourism Cabinet came with one little catch: an expiration date. The agreement says that AiG can receive a 25 percent tax rebate on the cost of construction once the park opens, provided construction began by May 2014. The discount would be capped at $43 million.

Gil Lawson, a spokesman for the Tourism Cabinet, told LEO Weekly that Ark Encounter quietly withdrew its old application for a $172 million project on March 28 and instead submitted a $73 million proposal. If that application is approved, and if it is built within the allotted timeframe, that would mean AiG is eligible for $18.25 million in tax incentives, LEO Weekly said.

But the shrinking tax package doesn’t appear to be Ham’s only problem. In April, the Cincinnati Enquirerreported that the local road improvements needed to handle all the traffic that will supposedly rush to Ark Encounter (if it ever opens) will be pushed back to 2017. That’s a bit of a problem for Ham, who last claimed that the park would open in the summer of 2016. Perhaps he wants park visitors to have an authentic Bible experience by walking or riding camels to see the ark.

There is also some mystery surrounding the $62 million in municipal bonds that supposedly rescued Ham’s project. The Louisville Courier-Journal reported in January that while $26.5 million in bonds had been sold, the city needed to sell an additional $29 million by Feb. 6 or else those who already bought bonds would be able to collect on their investment immediately.

The city would not say exactly how much money was raised, the Courier-Journal reported in late February, but AiG’s website claims the bonds actually yielded $73 million. AiG also claims it has raised $15 million on its own.

Hmm… when “there is some mystery” about how public funds are allocated and being used, especially on a legally and ethically questionable project such as this, then that’s kind of a problem.  KY lawmakers and politicians would be wise to distance themselves from this slow-motion train wreck.  But there’s more!

3) Ham has claimed that ground breaking and construction did indeed begin this past May, except that it didn’t actually happen…

Despite these setbacks, Ham presses on. His latest ploy appears to be keeping up the hoax that the Ark Park is under construction. In February, he said groundbreaking would begin in May. On May 1, AiG hosted a “groundbreaking ceremony” at the site where the park is supposed to be built, but the “groundbreaking” consisted of a handful of men in suits using wooden mallets to hammer wooden pegs into wooden boards. This all took place inside an auditorium, which doesn’t look much like a theme park. (You can watch this exciting video here, but be warned – it’s over 40 minutes long.)

It is now June, and it remains unclear whether or not construction has actually started on Ark Encounter. AiG’s website says its “construction management team” is still soliciting bids from contractors, suggesting that no real progress will be made anytime soon.

Whoops!  I thought that “construction” meant that earth-moving machines were actually, I don’t know, moving earth and digging holes and that carpenters were actually nailing pieces of wood together and so on.  Apparently, in Ken Ham’s universe, “construction” means… something else.

Well, one thing is for sure: this story won’t end here.  I think Ken Ham is going to try to string both investors and politicians alike along for as long as possible on his sinking Ark Encounter, despite the fact that it should be obvious by now to any reasonable observer that his grasp of finances is about as trustworthy as his grasp of science.

Too bad for the folks who invested in this debacle that they didn’t use a little evidence-based thinking. That’s what you get for faith-based investing, I suppose.

Continued Financial Trouble for KY Creation Museum?

Ken Ham’s Creation Museum is back in the news, and – surprise – it has to do with a questionable funding proposal to finance his floundering theme park, where people can pay to be told that the Flintstones is the real thing.

Yup, they actually teach that humans and dinosaurs coexisted… just like in the Flintstones cartoon.  Looks like a good investment to me – Yabba-dabba-doo! (Image source)

I’ve posted before (here and here) about the troubles the Creation Museum has had in securing funding for its Ark Encounter attraction (not to mention its dwindling profits – or should that be “prophets”?), and the following article indicates that Ken Ham is pursuing a constitutionally questionable strategy which could land him and the municipality in question into some dicey legal waters…

Kentucky City May Offer $62 Million in Securities to Help Noah’s Ark Replica Park

A city in Kentucky is working with Crosswater Canyon, an owned subsidiary of Answers in Genesis, Inc., to offer $62 million in securities for prospective investors to help aid the completion of a Creationist theme park and replica of Noah’s Ark.  While the city of Williamstown is issuing the bond, Crosswalk Canyon is solely responsible for the bonds, not the city.

Beginning next month, Williamstown may oversee the amount of taxable securities for investors to the project overseen by Answers in Genesis, reported Brian Chappatta and Priya Anand of Business Week.

“Proceeds will help build a 510-foot (155.4-meter) wooden ship, the centerpiece of a planned biblical theme park called ‘Ark Encounter.’ Bond documents project the venue will attract at least 1.2 million people in its first year,” wrote Chappatta and Anand. …

But if things are going so well for Ken Ham and his cartoon attraction, then why the need for these so-called “securities” to fund the project?  Let’s read on…

… Unlike the Creation Museum, the Ark Encounter project has had its share of financial issues regarding funding and donations.

The official ground-breaking for the project has been delayed multiple times since 2011, with private donations not matching the necessary monetary benchmarks.

Mike Zovath, head of the Ark Encounter project, told The Christian Post about the current status of the park’s construction, namely that it is “under design.” …

Wow, that’s got to make potential investors nervous.  So what’s the big deal about going through these “securities” issued by the town of Williamstown, KY?…

… Answers in Genesis’ efforts in Kentucky have garnered their share of criticism, including from the Washington, D.C.-based group Americans United for Separation of Church and State.

In the past Americans United has criticized the alleged First Amendment issues with regards to the state support for projects that benefit the Creation Museum and the Ark Encounter.

Alex Luchenitser, associate legal director at Americans United, told The Christian Post that the bond offering is one of many examples of government aid proposed for the Ark Encounter project.

“The imminent bond offering is only one of several different kinds of aid being given to the Ark Park by the State of Kentucky, Grant County, and the City of Williamstown,” said Luchenitser.

“The array of government aid to the Ark Park raises very serious issues under the religion clauses of the U.S. Constitution and the even stricter church-state prohibitions of the Kentucky Constitution.” …

Well, there’s that!  And then there are other questions regarding the legality/wisdom of these securities from the standpoint of the Securities and Exchange Commission (SEC).  But don’t take it from me; take it from from people who actually know business and investment, like the folks at Bloomberg Businessweek.  Here’s an excerpt from an excellent blog post on this particular point:

Bloomberg Reports on Ken Ham’s Ark Bonds

This is about an article at the website of Bloomberg Businessweek. Business Week was formerly an independent magazine, now it’s part of the Bloomberg international news agency, headquartered in New York. Their article is Noah’s Ark Depends on Faith in Default-Plagued Debt: Muni Credit.

From our recent post, Ken Ham’s “Ark Encounter” Bonds, you already know about the bonds being issued to finance the proposed Ark Encounter project, which is owned by a company controlled by Answers in Genesis (AIG). AIG is the on-line ministry of Ken Ham (ol’ Hambo), the ayatollah of Appalachia. It also owns and operates the infamous, mind-boggling Creation Museum.

It appears that Bloomberg has seen all the documents, and they routinely report on the bond market. Their analysis is far more sophisticated than ours. They say, with bold font added by us:

“Given the default history of unrated municipal debt, investors may have to pray for the success of bonds being sold to build a full-scale replica of Noah’s Ark.

The northern Kentucky city of Williamstown plans to offer $62 million of securities next month for affiliates of Answers in Genesis, a Christian nonprofit that operates the Creation Museum upstate. Proceeds will help build a 510-foot (155.4-meter) wooden ship, the centerpiece of a planned biblical theme park called “Ark Encounter.” Bond documents project the venue will attract at least 1.2 million people in its first year.” …

Ouch… but what the heck does Bloomberg Businessweek know?  Sure they may have oodles of financial and investment expertise, but if creationists have shown us anything it’s that they don’t need no stinkin’ experts who spout off about pesky things like evidence and facts!

So head on over and buy some of Ken Ham’s bonds.  You just have to have faith that you won’t be flushing your money down the toilet 🙂

Skeptic Money: Guaranteed Mutual Funds?

This past weekend at Skepchicamp 2010, one of the most interesting presentations was given by Phil Ferguson, the author of the must-see Skeptic Money website. Phil specializes in applying skepticism & critical thinking to an area where I am admittedly very weak: money, finances, and investing.  During his presentation, Phil was gracious enough to give some very useful skeptical advice on “Guaranteed Mutual Funds”, and I’m reposting his blog entry on the topic below…

That’s Phil on the left, along with The Friendly Atheist 🙂

NOTE:  This post is part of an ongoing education series.  This information is for educational purposes only.  This information does not constitute investment advice.  No rational person would make investment decisions based on a blog post.  Please consult with your financial advisor before taking any action.  If you think it is OK to make investment decisions based on a blog post, then for the love of the FSM – Stop reading my blog.

Below is a description of an investment product.  This is based on real and available products but does not represent any specific product.  Numbers below are estimates and are only intended to show how this product works.

The Pitch.

There is a new product it is a combination of the best of bonds and the stock market.  It is a guaranteed mutual fund.  Part of the money is invested in an index fund and some is invested in Zero-coupon bonds issued by the US Government – AAA Grade.  You get the benefit of the stocks and bonds.  The best part of all is that in the next 10 years, you are guaranteed a 40% return.  That’s like getting 4% each and every year.  That’s right you will make at least 40% return on your investment and you have the unlimited potential to make more if the stock market goes up.  Just sign here and give me $100!

The Reality.

Now for all of the details that the sales person did not tell you about.  The odd thing is that they did not need to tell you verbally because all of the details are in the prospectus – 72 pages of 6 point font written in the best legalese.  You signed a form that said you read it.  Now they can do almost anything to you.  You thought if you invested $100 you would have $140 in 10 years.  Now we will get the details.

10 years – You will want to keep this investment for 10 years because if you sell it early you have to pay a 10% penalty.  Whoops… did we forget to tell you that.

4% per year – Actually it is closer to 3.3% per year compounded but hey it’s only money.

The Load – oh…  did we forget to tell you there is an 8% load.  A load is a sales fee that is collected from you and paid to the sales person.  8% is on the high side for mutual funds but, this is a really good investment so it is a small fee to pay.  The $140 after 10 years was based on an investment of $100 you only invested $92 ($8 covers the load).  You do not make $40 but $37 (remember you only invested $92).  So when it’s all done you have $129 – still really good.

Annual expense ratio – We told you the 40% return is guaranteed – and it is.  So is the annual expense ratio.  This is to cover the cost to the company that manages you money – and they deserve it for getting you such a great product.  The fee is just 1.8% per year.  Just above the industry average but your worth it.  Total cost is just $18 over ten years.  Your total return is still $111 that’s great.

Insurance – Your money is guaranteed, it’s a kind of insurance.  You pay for auto and home insurance – of course you have to pay a little something for this insurance.  The cost is just 1.5% per year.  Total over 10 years is about $15.  Your total return is $96 – isn’t this, a wonderful investment.

Taxes – The IRS does not want to wait and tax you on all the money you are going to make with the Zero Coupon Bonds.   So they created a thing called imputed interest. They collect tax on the money you are going to get.  Don’t think that you lost money.  You did not!  You made money but agreed to a lot of high expenses.  That’s your problem not the IRS’s.  So…. ya gotta pay the tax.  I will call it $6.  So now your awesome investment of $100 after ten years is now worth around $90.

Who wants to buy now?

Umm… not me, Phil.  Thanks for the tip.