The 20% Letter Review – Tim Melvin Scam?

Hey, what's going on?

Today we're going to be taking a close look at The 20% Letter by Tim Melvin and giving it a review.

Below you'll find everything you need to know about this newsletter to determine if it's right for you.

This includes looking at Tim, looking at the publisher that puts out this product and looking at the overall investing strategy.

Let's get started!

Revealing The Perfect Dividend Stock

The 20% Letter is a new service so I can't really determine if the stock picks are good or not.

HOWEVER, Tim is marketing his newsletter the same way every other stock picker markets their newsletters..

Which is to hype up a stock in a presentation and withhold the name until you buy the newsletter.

Well I have good news - there were enough clues in the presentation to figure out what the stock is!

The stock being promoted in this presentation is TFS Financial (TFSL).

According to Stock Gumshoe, TFS Financial "is the publicly traded minority shareholder of the mutual savings bank Third Federal Savings and Loan."

This is a bank located in Ohio and Florida.

Here are some facts about this bank:

• Current Yield of 8.4%
• Been around for a while
• Good net income margins

However, there is some risk for this stock.

Apparently public shareholders make up 19% of the company ownership and 81% is owned by the bank's account holders.

Each year the 81% owned by the bank's account holders have voted to refuse a dividend and give all the cash to the public shareholders.

With interest rates rising the the majority of shareholders could change the strategy.

Here's how the stock has performed since inception back in 2007:

The stock is currently cheaper now than it's been in about 8 years (outside of the dip from Covid).

It all comes down to whether you're comfortable with the risks because the 8.4% dividend is pretty nice.

Who Is Tim Melvin?

Tim Melvin is the creator of The 20% Letter.

There's honestly not too much out there about him and most of the information about him comes from him.

It's usually not a good idea to trust what a stock picker says about themselves without having proof.

According to Tim he started at John Hancock Financial Services and sold life insurance and mutual funds.

After this Tim became Vice President of what he calls "a major regional firm on the East Coast."

Interestingly enough Tim doesn't name the firm and that always make me a little suspicious.

So I did a little digging and was able to find out this firm was called Ferris Baker Watts.

I think I know why Tim doesn't mention the name of this firm because when you Google the name this is the first thing that comes up:

Apparently they were making inappropriate sales to people over the age 85.

Yuck.

That's about as scummy as you can get.

After his time in the financial world it seems Tim made a pivot to selling products to retail investors.

And his newest product is The 20% Letter.

The 20% Letter FAQ's

Still have some questions about this newsletter?

Here's answers to any questions you might have about The 20% Letter.

1) How Much Does The 20% Letter Cost?

This is an introductory newsletter and only costs $79 per year.

Usually when you see a newsletter priced this way it's more to just get you into the sales funnel so they can sell more to you later on.

The publisher that sells The 20% Letter has products that cost thousands and will definitely be promoting them to you.

2) What's The Investing Strategy?

The strategy here is to get 20% returns every year - hence the name The 20% Letter.

You'll mainly be investing in dividend paying small bank stocks.

These stocks can be volatile but do offer a dividend which is good for retirement and building passive income.

3) How Much Do I Need To Invest?

It depends on your age and your goals.

If you're heading into retirement and want passive income to live on you'll probably want $500,000.

If you're younger you can start with much less - like $10,000.

If you are younger and want to plan for your retirement take the $10,000 and invest in the dividend stocks recommended.

Then take the dividend payments and reinvest them into back into the dividend stocks.

In 30 years you'll have a nice passive income stream to retire on.

4) What Is Investors Alley?

Investors Alley is the publisher that sells The 20% Newsletter.

I did a whole review about them that you can read here.

Their most popular newsletter is a The Dividend Hunter which is another newsletter that focuses on dividend stocks.

Overall the publisher is a pretty typical one.

They sell a bunch of newsletters and their goal is to get you to spend thousands with their upsells. 

The 20% Letter Conclusion

This review is a work in progress.

I saw this newsletter had just launched and just wanted to get some preliminary information out there for anyone looking for it.

It's too early to judge how well this newsletter will perform and I'll update as the returns become more clear.

Overall the strategy doesn't seem horrible and the first stock Tim has promoted, TFS Financial, seems pretty promising.

There's risk but the dividend is high and the stock is the cheapest it's been in a long time.

There's some concerns, though.

There's not much out there about Tim and what I could find wasn't too promising.

I don't know what his role as Vice President at Ferris Baker Watts was but anyone that targets people over 85 is a scumbag in my mind.

My advice for this newsletter is to wait to see what kind of results it gets before diving in

Here's A Better Opportunity

The 20% Letter has potential but it's still too early to determine how good it is.

The good news is there's proven investing newsletters out there that are already producing good results.

To see my favorite investing newsletter (which is very affordable), click below: