You hear horror stories all the time about people getting scammed, especially online.
There are hucksters, grifters, and con artists of all kinds in this world. They live among us.
Here are some ways to avoid the scams and things to watch out for:
1. High guaranteed rates of return are always a red flag. Even if they’re based on past performance, there is no way to guarantee that good performance will continue and lots of reasons to suspect it won’t. You can make projections, but those projections should be conservative and never guaranteed.
2. If something sounds too good to be true, it likely is. Get a second opinion from someone you trust or a professional (your accountant, your lawyer, your financial advisor).
3. If you feel hesitant or embarrassed to even mention it to someone you trust, you should ask yourself why. That itself is a red flag that something is off.
4. Scammers prey on the desperate and the greedy. Sometimes hard times can’t be avoided and many people have felt the squeeze of high inflation and high interest rates over the past year or two. But you’ll end up even farther behind if you try to recover too quickly. Focus on the fundamentals. Slow and steady is the way out, not get rich quick schemes and “earning $$$$ from your basement” or “while you sleep.”
5. If someone’s pitching a strategy and says the words, “using other people’s money”… red flag.
6. If someone’s pitching a strategy and claiming it’s the ONLY way. Real estate. Crypto. Whatever. Red flag.
7. Using FOMO or false urgency or false exclusivity or any kind of fear to get you to invest… red flag.
In the end, you should always do your due diligence. Read reviews. Do some research. Talk to people you trust. Just like you would with buying a car or a new tv.
Get rich quick schemes and scams that sound too good to be true are the quickest way to ruin.