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10 Signs of an Investment Scam You Need To Know

10 Signs of an Investment Scam You Need To Know

If you’re looking to invest and make money in the stock market, chances are you’ve seen people who are advertising a “sure 100% return,” or similar incredible promises. You might ask yourself, “How is this possible?” Well, in most cases, it’s not. And in most cases, the offers and promises are misleading, if not outright fraudulent.

Even the most sophisticated and experienced investors can be caught up in a good investment scam, as evidenced by the many professional money managers who placed their clients’ money with Bernie Madoff. So what are you, the average-intelligence, average-experience investor, supposed to do to protect yourself from unscrupulous con artists who try to separate you from your hard-earned money?

There are several signs that can alert you that something is not right with an investment scheme, provided you pay attention and know what you should be looking for. Here are 10 of them:

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1. If it seems too good to be true…OK, you know this.

You know it. There are rare individuals who can occasionally make a killing in the market, but they are few and far between. And they generally can’t do it consistently, month after month, year after year. So if someone is guaranteeing a particularly high return and claims that it is steady as a rock, you should run the other way.

2. They are offering a “guarantee.”

No one can guarantee a specific return, unless they’re offering fixed income products like bonds or Certificates of Deposits (CDs). No stock market return can ever be guaranteed. Period.

3. It’s a complicated or unique opportunity.

Sometimes people claim that they have access to a unique opportunity, something that is not offered to regular people. They might use fancy terms like “prime lending certificates” or “private placements,” which actually mean nothing but sound pretty impressive. Or they may claim to have mastered a technique involving futures or forex.

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4. New business models.

Maybe you are offered the chance to get in on the ground floor of a new, “world-changing” technology. Biotech and green tech companies are particularly popular right now. A company claims it holds a patent for something that would truly revolutionize the way the world works, and you are so lucky that you can get in before the big institutional investors do. Guess what? The technology might sound great in theory, but odds are good that it doesn’t even exist.

5. You are brought in by someone you know as a “referral.”

These are some of the oldest scams in the book, and they rely on the power of social circles. The scammer will pay off the people in the initial rounds of the scam, in order to persuade them to bring in more of their friends and associates. You are convinced because you actually know someone who got paid the promised amount. You might get lucky and actually get what you were promised. But once the scammer gets what they want, it’s, “Bye-bye!” And you will be left holding the (empty) bag.

6. Urgency.

Many con artists will pressure you with “limited time offers” in order to force you to make a quick decision. They don’t give you the time to consider whether or not their offer truly makes any sense at all.

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7. They don’t use independent third-party accounts.

No true investment will ever “pool” your money with that of others and hold it in a common account. You should always have your own individual account, which should be held by someone other than the scammer, and you should receive periodic updates. Of course, this didn’t stop Madoff’s Ponzi scheme, but it’s a good warning flag for avoiding less sophisticated scammers.

8. Conspiracy theories.

Scammers like to prey on people’s fears. They may imply that the government is actively “preventing” you from getting rich by keeping you ignorant or by barring you from certain types of investments, which they conveniently can offer to you.

9. They are unregistered.

This is a no-brainer. Any legitimate investment company and the person offering the investment must be registered with the SEC or another government agency. Make sure you get verification of this registration. It will not always protect you, but registration at least gives you recourse if it does turn out to be a scam.

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10. Really bad investment advice.

Scammers might suggest you put “all of your assets” into their investment. They might tell you to take out a loan or cash in your 401(k) in order to obtain the funds to invest with them. Anything that goes against common sense should be a huge red flag.

It’s your hard-earned money, and yes, you want to invest it so it can earn more. But invest it wisely, and don’t just give it away to clever con artists.

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Simon Andras

Simon is an entrepreneur who blogs about lifestyle.

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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