Even the most experienced investors can get trapped by a clever investment scam. These scams usually disguise themselves as a quick and easy way to earn money. As you begin your journey towards financial freedom, it is crucial that you avoid these common schemes.
“Too good to be true” scams
These are packaged in a variety of ways. From “risk-free” investments to options that are “100% guaranteed” to earn you money. These scams often trigger us to want more. Remember that all investments carry some degree of risk. So, if someone guarantees high returns with no risk, be wary!
Pyramid schemes
Don’t fall prey to business opportunities where you earn money from recruiting people into the business, instead from actual sales of a product. If you are “guaranteed” to earn money by bringing in more people who must pay to be part of your business, your Spidey-senses should be tingling by now.
Take note that not all networking schemes are suspect. Make sure that you do your research and always assess your situation. If you feel like you’re marketing people instead of products, you may be involved in a financial scam that is “too good to be true.”
It’s complicated
While this may apply to your Facebook relationship status, it hardly has any space for your financial portfolio. If you are offered an investment option that is “too complicated” to explain, take your wallet and run.
Some scammers may even use fancy terms, such as “private placements” or other technical jargon to make them seem more credible. Be practical about where you invest and make sure you speak with an expert who can clearly and simply explain all you need to know about your investments.
"Invest now or lose your chance forever"
If you are being pressured to invest now or “lose your chance” to earn “incredible amounts” of cash, tread lightly. Pressure tactics, from limited offers to timed rebates, are common strategies in many financial scams. The goal is to push you into giving the company a good amount of money without really thinking about it first.
Investments are a form of relationship you have with your bank or broker. Before you commit, always ask yourself if you fully understand what you’re getting yourself into. Think with your head and not your heart. Money is not something you want to hashtag #WalangForever on your social media accounts.
In a nutshell
Be cautious of any investment offer that uses superlatives or absolutes. If it’s described as “sobrang awesome” or “risk-free” and if you’re “guaranteed” to earn money, it really may be too good to be true.
Remember that investments are great ways for you to earn money and save for retirement, but legitimate investments all carry some degree of risk. Always check and double-check with a trusted financial advisor or do your own research before considering any type of investment.
