I’ve developed a new approach for giving people advice, whenever they ask me about a stupid investment idea (including buying real estate at current prices in San Diego) the conversation goes something like this:

Person: “I found a company that’s offering me a 40% guaranteed return. They invest in XXX, which is [blah blah blah]”

Me: “Go for it, the worst that can happen is you get a 40% return”.

Person: “What do you mean?”

Me: “The best thing that can happen is you lose all your money, but you’re young so it doesn’t matter and you’ll learn to avoid these kinds of scams. If you actually do get 40% you’re one of the lucky ones at the start of this scheme and you’ll end up investing like this until you lose all your money later, at which point it will be more painful. So I suggest you get this learning experience out of the way now.”

Really makes people stop and think, much better way to go about it than try to fight them on something they’re already mentally invested in.