Review Lifetime Investment Earning or Another Scam

Best Binary Options Brokers 2020:

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!


    Perfect For Experienced Traders!

Rayton Solar : Legitimate Investment or Scam? And why is Bill Nye the Science Guy promoting it?

Rayton Solar, a company endorsed by Bill Nye the Science Guy raised a financing round by asking regular Americans to invest. Rayton ads painted a picture of an easy opportunity but there are details hidden in the investment documents that every investor should be aware of.

The crowdfunding round has now closed, but this offer is still worth a close look as an example of abuses in equity crowdfunding. We reviewed the investment with two questions in mind:

  1. Is this a fair investment?
  2. Will Rayton make an impact on renewable energy?

So first, is this a fair investment?

Our Answer: No — definitely not.

Investors and clean energy enthusiasts on Facebook and Instagram are being asked by Rayton and Bill Nye to make an investment on terms that almost no experienced investor would make in ANY company. We think the terms are unfair and unethical. Rayton has purposely offered these “unfriendly terms” to investors in order to make it likely that the CEO and Directors would profit even when the company fails and investors lose all their money.

If you have already invested on StartEngine, we recommend withdrawing your investment now. StartEngine should not allow Rayton’s terms at all.

What’s the problem? The strange investment terms Rayton chose to offer allow the founders to take money from investors and spend it on themselves rather than invest it in Rayton. This is a big red flag. All money raised should go to build technology required to make Rayton a valuable company. It’s hard to overstate how offensive this is as an investor. In basic terms, this means the owners could take some of the money from you, the potential investor reading this, and buy a bunch of beach houses in Florida or more than 30 Teslas while Rayton fails and you lose everything.

The founders allow themselves to do this in their official investment filing:

“After each closing, funds tendered by investors will be available to the company and, after the company has sold $7,000,000 worth of Common Stock, selling securityholders will be permitted to sell up to $3,000,000 worth of Common Stock.”

If Rayton sells $10 Million worth of shares, $3 Million of that investor money can go straight into the pockets of the owners such the CEO, and UCLA professors, Dan Rosenzweig and Mark Goorsky. Not good. All investment should be spent building technology so Rayton can repay investors. Stated another way, with these bad investment terms, Rayton’s failure could cause investors to lose everything while the CEO and two “related party” owned holding companies walk away with $3 Million in cash. Experienced investors never allow that.

While founders are sometimes allowed to sell equity in late investment rounds, it’s basically unheard of to do that at Rayton’s stage. It’s a clue that Andrew Yakub, Dan Rosenzweig, and Mark Goorsky aren’t confident in Rayton’s technology, and are looking to make quick money by taking it directly from small scale investors.

Best Binary Options Brokers 2020:

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!


    Perfect For Experienced Traders!

Worse, it appears that Rayton is using investor money to buy more Facebook ads, to raise more money from investors, some of which it’s using to buy more ads. That would be similar to a ponzi scheme with money from early investors being spent to get money from new investors rather than on building Rayton technology.

There is a Second Major Red Flag. The price of each share Rayton is higher than almost any other startup ever so it’s a bad deal for investors.

A typical company at this stage with similar technology might be worth $2.5-$10 Million at an early “Series A” stage. If expert investors thought the technology was very promising they might value it at around $25 Million.

Rayton is selling shares at a value “post money” between $60 Million and $267 Million (see page 14 of their investment circular). That means they claim that right now it could be worth over $200 Million.

Almost all companies at this early stage are worth less than $30 Million. How could Rayton ask crowdfunders to invest at a valuation 6 times worse? (Click here to see a graph of other companies at the same series “A” stage). T he graph doesn’t even go past $100 Million. Put another way, Rayton investors could pay 4 times as much as the early investors in Uber paid.

Finally, a bit of irony in from the Rayton site: “ The CEO is a two­ time clean technology entrepreneur with his previous solar startup currently valued at $15 million.” Taking the $15M valuation for his previous startup (started in 2009) and the implication the quote makes that Rayton might achieve similar results (a $15 Million valuation in 8 years), it suggests investors would lose at least 75%.

An editorial aside: This post only implies that THIS clean energy investment is a bad one. Our country and planet urgently need more clean energy investment, incentives and subsidies. The best social and environmental science shows the impact of climate change will be devastating . A fast transition to clean energy drives huge benefits.

For people considering a Rayton investment, the motivation is a good one. For better results, consider investing in a publicly traded clean energy index fund like these. For those not requiring return of capital, consider a donation to a nonprofit working on climate change like the Natural Resources Defense Council , or support for political candidates that support clean energy.

This post recieved a lot of attention from climate deniers and libertarians who apparently don’t like Bill Nye because he communicates the scientific consensus on climate change. That is an absurd reason not to like Bill Nye, but his silence while Americans are misled for their money is a great reason.

2. Will this help the solar industry? Our Answer: Almost certainly not.

The Rayton video misleadingly implies that using less silicon will change the solar industry. There are two problems. First, there is the capital cost of machines, higher operating costs, and the fact that thinner silicon wafers could require expensive changes elsewhere in the process of making a solar panel. It’s not clear that Rayton panels will be cheaper. Second, and more importantly, using less silicon wouldn’t solve the key cost issues of solar. Solar panels are less than half the cost of most solar systems and silicon, which Rayton says it saves, is only a small part of solar panel cost.

In addition, other technologies that require less silicon are more advanced than Rayton’s and will likely beat it to market with lower costs (if a large market even exists for more silicon efficient cells, which is not clear).

More damning still is the fact that the challenges to wide scale solar adoption are no longer around panel cost. The challenges now are increasingly around tax policy, grid infrastructure, capital cost, land, and the above mentioned cost of everything from labor to power inverters (“balance of system” in industry jargon). Silicon cost is simply not the major issue.

As this review has become more widely read, people with more background have weighed in with better analyses of technical issues. We believe this post on the Y combinator discussion board by Matt Channon is informative. Also be aware that no reputable solar investors are listed as supporting Rayton.

Unethical Enough to Act:

Researching Rayton unveiled the extent to which investors are being deliberately misled while Rayton raises millions of dollars from casual investors. Many of these investors are likely not wealthy and are less able to absorb the losses associated with being misled by a company like Rayton. This is unethical enough that action needs to be taken to stop it.

  1. Bill Nye should speak up publicly so more well meaning people who want to support solar do not lose money. It’s possible and even likely that he wasn’t aware of the investment terms and was simply paid to read a script. He clearly failed to do some basic diligence, but the fact that his brand is being tarnished for what can’t have been a lot of money makes it likely he didn’t have ill intent. Regardless, Bill Nye needs to fix this.
  2. Other professionals who are involved in Rayton have an opportunity to raise awareness. According to Rayton’s public website, world reknowned UCLA professor Dan Rosenzweig and solar expert Mark Goorsky, another highly regarded scholar, are board members who may be in a position to help.
  3. StartEngine bears ethical responsibility for allowing investor unfriendly terms to be sold. The JOBS act made equity crowdfunding legal. It’s poorly implemented if Rayton’s unethical terms are legal. Startengine should prohibit “cash-out” offerings and add onerous langauge around early stage exec pay to make schemes like Rayton’s more difficult to pull off. WeFunder, CrowdFunder, IndieGoGo, etc. should do the same to preserve collective reputations. Startengine must end Rayton’s campaign.

The Costs of Investing

All investments carry costs—real costs—not merely the opportunity costs of an investor choosing to forego one asset in favor of another. Rather, these costs and comparisons are not that dissimilar to those consumers face when shopping for a car.

Unfortunately, many investors ignore critical investment costs because they can be confusing or obscured by fine print and jargon. But they don’t have to be. The first step is understanding the different types of costs.

Types of Investing Costs

Different investments carry different types of costs. For example, all mutual funds–one of the most common investment instruments—charge what’s called an expense ratio. This is a measure of what it costs to manage the fund expressed as a percentage. It is based on the total assets invested in the fund and is calculated annually. This fee is typically paid out of fund assets, so you won’t be billed for it, but it will come out of your returns. That means if the mutual fund returns 8% and the expense ratio is 1.5%, you’ve really only earned 6.5% on your shares.

There are two problems with a high expense ratio. First, a higher portion of your money is going to the management team instead of to you. Second, the more money the management team charges, the more difficult it is for the fund to match or beat the market’s performance.

Ironically, many higher-cost funds claim they’re worth the extra cost because they enjoy stronger performance. But, expense ratios, like a leak in a bathtub, slowly drain some of the assets. Therefore, the more money management takes out in the form of fees, the better the fund must perform to earn back what’s been deducted.

Marketing costs. Moreover, in some cases, these fees help pay for marketing or distribution costs. This means that you are paying managers to promote a fund to other potential investors. This particular cost is called a 12B-1 fee.

Annual and custodian fees. Annual fees are often low, about $25 to $90 a year, but every dollar adds up. Custodian fees usually apply to retirement accounts (e.g., IRAs) and cover costs associated with fulfilling IRS reporting regulations. You can expect to pay anywhere from $10 to $50 per year.

Other costs. Some mutual funds include other costs, like purchase and redemption fees, which are a percentage of the amount you’re buying or selling.

Beware loads and commissions. A front-end load is a fee charged when you buy shares, a back-end load is a fee incurred when selling. Commissions are essentially fees that are paid to the broker for their services.

As you can see, the financial world has not made it easy to untangle all of these complex and often hidden expenses. However, the U.S. Securities and Exchange Commission (SEC) has taken steps to clarify these costs for investors. In an effort to protect retail investors, the SEC, in its 2020 priority list, indicated its intent to “Focus on firms that have practices or business models that may create increased risks that investors will pay inadequately disclosed fees, expenses, or other charges.”

In other words, the SEC planned to take aim at firms that engage in practices like receiving compensation for recommending specific securities, ignoring accounts when the assigned manager has left the firm and changing fee structures from commission-only to a percentage of client assets under management.

While the SEC plays a valuable role in safeguarding investors, the best defense against excessive or unwarranted fees is doing careful research and asking plenty of questions. Taking the time to understand what you’re paying is critical because fees, over the long-term, rob investors of their wealth.

Why Investing Fees Matter

Fees almost always appear deceptively low. An investor might see an expense ratio of 2% and dismiss it as inconsequential. But it’s not. A fee expressed as a percentage doesn’t reveal to investors the dollars they’ll actually be spending, and more importantly how those dollars will grow. The result may be anchoring bias, in which irrelevant information is used to evaluate or estimate something of unknown values.

Simply put, everything is relative. This means that if our first exposure to investing involves excessive fees, we may view all subsequent expenses as low even though they are, in fact, high.

Just as compounding delivers growing returns to long-term investors, high fees do exactly the opposite; a static cost rises exponentially over time.

Scenario 1

Suppose you have an investment account worth $80,000. You hold the investment for 25 years, earning 7% per year and paying 0.50% in annual fees. At the end of the 25-year-period, you’ll have made approximately $380,000.

Scenario 2

Now, consider the same scenario, but with one difference; you aren’t paying attention to costs and you hand over 2.0% annually. After 25 years you’re left with approximately $260,000. That “tiny” 2.0% cost you $120,000.

Are Expensive Investments Always Worth it?

Imagine that an advisor or even a friend tells you that a mutual fund, while pricey, is worth it. She tells you that while you’re paying more, you will also get more in the form of a superior annual return. But that is not necessarily true.

Studies have shown that on average, lower-cost funds tend to produce better future results than higher-cost funds. In fact, researchers found that the cheapest equity funds outperformed the most expensive ones across five-, 10-, 15-, and 20-year periods.

This finding has been proven time and time again. Consider similar research from Morningstar, which found, “Using expense ratios to choose funds helped in every asset class and in every quintile from 2020 to 2020. For example, in U.S. equity funds, the cheapest quintile had a total-return success rate of 62%, compared with 48% for the second-cheapest quintile, 39% for the middle quintile, 30% for the second-priciest quintile, and 20% for the priciest quintile.”

What’s the message? “The cheaper the quintile, the better your chances.” This finding was consistent across various asset classes. That is, international funds and balanced funds all showed similar results. Even taxable-bond funds and municipal bond funds exhibited this characteristic of low costs being associated with better performance.

Brokerage Fees Come in All Shapes and Sizes

Account Maintenance Fee

This is usually an annual or monthly fee charged for the use of the brokerage firm and its research tools. This fee is occasionally tiered. Those who want to use more robust data and analytic tools pay more.

Sales Load

As mentioned above, some mutual funds include a load or a commission paid to the broker who sold you the fund. Be wary of these charges for two reasons. First, many mutual funds today are no-load and are therefore cheaper alternatives. Second, some brokers will push funds with larger loads to pad revenue.

Advisory Fee

This is also sometimes referred to as a management fee for the expertise the broker brings to the table in the form of wealth strategies. This cost is a percentage of the total assets the investor has under the broker’s management.

Expense Ratio

As discussed earlier, this is a fee charged by those managing the mutual fund.


These are common and they add up fast. As mentioned above, commission fees are the cost of executing any buy or sell trade. This payment goes directly to the broker. This cost usually ranges from $1 to $5 per trade and, in some cases, will be waived if the investor reaches an account minimum. Occasionally this fee is calculated as a percentage of the value of the trade.

Remember that full-service brokers who provide complex services and products like estate planning, tax advice, and annuities, will often charge higher fees. As a rule-of-thumb, this fee is usually 1-2% of the value of the assets managed.

The burden of expensive fees becomes greater over a longer period. Therefore, young investors just getting started face a bigger risk because the total dollars lost to costs will grow exponentially over the decades. For this reason, it’s particularly important to pay attention to costs in accounts that you will hold for a long period of time.

Active vs. Passive Management

Passive management describes investments like mutual funds that are designed to replicate market indexes like the S&P 500 or the Russell 2000. The managers of these funds only change the holdings if the benchmarked fund changes. Passive management seeks to match the market’s return.

In contrast, an active management strategy is a more involved approach, with fund managers making a concerted effort to outperform the market. Not happy with simply matching the return of the S&P 500, they want to make strategic moves that seek to exploit the value of unrecognized opportunity in the market.

Different Costs

Active and passive funds carry different costs. The average fee for actively managed funds in 2020 was 0.76%, whereas passive mutual funds averaged just 0.15%. Despite a continued decline since 2020, it’s important to note that as the total amount of assets in an actively managed fund decreases, these funds, in general, raise the expense ratio.

As one study from ICI Research determined, “During the stock market downturn from October 2007 to March 2009, actively managed domestic equity mutual fund assets decreased markedly, leading their expense ratios to rise in 2009.” This finding underscores an important truth: Expense ratios are often not tied to performance. Instead, they’re tied to the total value of assets under management. If the assets decrease—usually due to poor performance—the managers will simply raise their prices.

Some investors will argue that “you get what you pay for.” In other words, while an active fund may charge more, the higher returns are worth the expense because investors will earn back the fee and then some. In fact, these advocates for active management occasionally have the annual performance to back up such claims. There is, however, often a problem with this assertion: survivorship bias.

Survivorship Bias

Survivorship bias is the skewing effect that occurs when mutual funds merge with other funds or undergo liquidation. Why does this matter? Because “merged and liquidated funds have tended to be underperformers, this skews the average results upward for the surviving funds, causing them to appear to perform better relative to a benchmark,” according to research at Vanguard.

Of course, there are some actively managed funds that do outperform without the help of survivorship bias. The question here is do they outperform regularly? The answer is no. The same body of research from Vanguard shows that the “majority of managers failed to consistently outperform.”

The researchers looked at two separate, sequential, non-overlapping five-year periods. These funds were ranked into five quintiles based on their excess return ranking. Ultimately, they determined that while some managers did consistently outperform their benchmark, “those active managers are extremely rare.”

Moreover, it is nearly impossible for an investor to identify these consistent performers before they become consistent performers. In attempting to do so, many will look at previous results for clues on future performance. However, a critical tenet of investing is that past returns are no predictor of future gains.


The underlying reason for underperformance in most actively managed funds is that practically no one is able to consistently choose well-performing stocks over the long-term. One study, for example, found that “less than 1% of the day trader population is able to predictably and reliably earn positive abnormal returns net of fees.”

Active managers are no better. In fact, this figure of 1% is eerily consistent with other research that examined the performance of 2,076 mutual funds from 1976 to 2006. Those results showed that fewer than 1% achieved returns superior to those of the market after accounting for costs.

Moreover, the challenge of beating the market is growing. A multi-university study determined that prior to 1990 an impressive 14.4% of equity mutual funds outperformed their benchmarks, but by 2006 this figure had dropped to a miniscule 0.6%. Consider these figures when asking if an active management solution is the right move.

Ways to Minimize Investing Costs

Know When to Buy and Hold

The more you move money around, the more costs accrue. As discussed above, there are fees and charges associated with buying and selling. Like a pail of water passed from one person to another, each successive hand-off causes a little spill.

Moreover, buy-and-hold strategies yield better returns than those based on frequent trading. According to the Financial Times, “Over 10 years, 83% of active funds in the U.S. fail to match their chosen benchmarks; 40% stumble so badly that they are terminated before the 10-year period is completed.”

Consider Tax Implications

This is the most ignored aspect of investing costs. It’s also the most complicated. Even seasoned investors find it beneficial to get help from a professional when it comes to taxes. The savings generated often more than compensate for the professional’s fee. For example, many investors are unaware that realized losses on investments—that is, money lost after selling a stock for less than it cost, can be used to offset taxable gains. This is called tax-loss harvesting.

Ordinarily, an investor will pay either a long-term capital gains tax (securities held over one year) or short-term capital gains tax (securities held for less than one year). If it’s a long-term capital gain the investor will pay either 0%, 15%, or 20% depending on their income level and their filing status (single, married filing jointly, married filing separately).

Short-term capital gains are taxed as ordinary income. These rates range from 10% to 37% again, depending on your income level and filing status. You can find out exactly what percentage of long and short-term capital gains tax you’ll pay by visiting

Tax-Deferred or Tax-Exempt Accounts

Investors might be surprised to see how much they hold on to with a tax-deferred, or tax-exempt account. Tax-deferred accounts, which safeguard investments from taxes as long as the assets remain untouched, include 401(k)s and traditional IRAs. These account options are great ways to save big on burdensome taxes.

However, there’s a catch. As mentioned earlier, you’ll lose the tax advantage (and get hit with penalty costs) if you withdraw money early–.before the age of 59½. Younger investors should consider Roth IRA accounts. Provided you have owned the Roth for five years, both earnings and withdrawals made after 59½ are tax free. These are great ways to save over the long-term if you know you won’t need to touch the money.

The Bottom Line

Do your homework. We live in times of unprecedented access to information. While some investments may obscure their costs in the fine print, anyone can quickly get to the bottom line with the wealth of information available online. There’s no excuse for investing in an asset without knowing the full costs and making the choices that are right for you.

How to Spot Investment Scams

Don’t fall victim to an investment scam. It is easier than you think for crooks to con you out of your hard-earned money if you let your guard down. Investment scams come in many forms, and they’ve been around for as long as stocks have traded on Wall Street, but the internet has made it even easier for these vultures to feed on investors tempted by the possibility of an “inside deal.” These scams range from crude and clumsy to highly polished and sophisticated.

Sophisticated scammers wrap their con games in an air of legitimacy, so it may be hard to see the truth, but knowing a few red flags to look out for can help protect your money.

Recognizing Scams

There are many different types of scams floating around the internet, so it would be impossible to identify them all. Even if one could detail each scam out there today, a new one will pop up tomorrow. However, there are some signs you can look for:

Promises of an “inside” deal from a stranger: If someone you don’t know offers you exclusive access to sensitive information, try to consider what this person has to gain. Why would a stranger pick you out to make rich? Does that make any sense?

Fool-proof, money-back guarantees of trading systems: Traders have countless tools at their disposal to help pick stocks. It’s natural for the people who create these tools and strategies to advertise them as the best available. However, when these systems are advertised as fool-proof ways to get rich quick, it’s time to proceed with caution. If such a sure-fire, easy-to-use system truly existed, do you really think you’d find out about it through a personal offer? Legitimate trading tools always remind traders of the risks involved with investing. They would never guarantee returns.

Complicated schemes involving unusual securities or foreign entities: While foreign investments are a common part of portfolio diversification, these investments should be made in established companies with clear business plans. It all goes back to the common saying, “invest in what you know.” Complicated plots involving offshore banks and industries you hardly know anything about should raise red flags. Why get involved in a complicated scheme you don’t understand? If you don’t understand the investment, how do you know you’ll earn a profit from it? Stick to opportunities that you can understand. If you’re eager to invest abroad, you can explore foreign ETFs through established firms while you research foreign markets more thoroughly.

One of the most popular stock schemes is called “pump and dump.” Schemers buy up a block of stock in a little-known company, preferably one with a buzzword-loaded name that seizes on trends. In 2020, those buzzwords could be related to areas like cannabis, crypto, or tech. With the buzzword stock in hand, the schemers begin flooding the internet with false rumors about how this company is on the verge of a breakthrough or merger.

In some cases, company insiders actively participate in spreading these false rumors. In other cases, the company has no idea the scheme is happening, and in effect, becomes another victim. Sophisticated scammers may even develop a phony letterhead and use it to send out press releases about the company.

If the scheme is successful, and unsuspecting investors are convinced that they’re getting in on the ground floor of the next big stock, the stock’s price will jump. As the stock price rises, the scammers try to decide when they think they’ve pushed the scheme as far as it can go. Once they’ve reached that point, they sell their original block of stocks, pocketing a sizable profit in the process. After that, the scammers will seek out another company to pump and dump.

Of course, after they’ve sold off the huge chunk of stocks and stopped spreading falsely positive rumors about the company, the company’s value will plummet. Anyone still holding the stock will likely lose most of their money, but the scammers don’t care, because they’ve already turned a profit and moved on.

This scheme can also be executed by shorting a stock. In that case, the scammers would short the stock, then flood the internet with negative rumors. When the stock drops, the short sellers cover their positions for a big profit.

The Bottom Line

With all of these schemes, the easiest way to protect yourself is to act slowly and research the investment opportunity through a variety of sources. When you see a story online about a company, look at who wrote it and where it was published. If it isn’t being covered by a mainstream financial news outlet, ask yourself why that’s the case. If an opportunity promises sure-fire returns, take extra time to research the company, the market, and the broader economy.

Schemes come in many forms, but they all have one thing in common: the promise of very high returns. The sad truth is that many people fall for these schemes because their greed overcomes their reason. Don’t let this happen to you. If an investment opportunity sounds too good to be true, it probably is.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

Best Binary Options Brokers 2020:

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!


    Perfect For Experienced Traders!

Like this post? Please share to your friends:
How To Choose Binary Options Broker 2020
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: