We live in a capitalist economy, so it’s needless to say that we’re all interested in growing wealth. But there’s a big difference between investing wisely and investing unwisely, and for every seemingly good investment opportunity out there, there’s someone waiting in the wings looking to scam you.
Yes, investors should beware of these scams, and we’ve taken the liberty of compiling some of the most common and destructive schemes that are still making the rounds today.
Pyramid Schemes
Despite being debunked again and again, pyramid or Ponzi schemes are still more popular than most people think.
Their premise is simple — you’re sold on an idea that you buy into, with the goal of persuading others to buy into the idea also. The more people you get to buy in, the more you think you’ll make. The only problem is that those who invest basically just line the pockets of the operators of this scam.
We all think we’re wise enough to recognize a pyramid scheme when we see one, but you might be surprised to know that Ponzi schemes have cost people more of their money than any other type of scam.
Precious Metals
You’ve probably heard something recently about how much money there is in precious metals these days. While not untrue, many scammers have jumped on this trend to swindle money out of people.
It usually works something like this: You’re approached by someone wanting to sell you bullion or space in a gold mine somewhere. The problem, in many cases, is that the bullion or gold mine doesn’t actually exist, and the scammer is banking on you never asking to visit or see the bullion in person, but only taking their word about how successful the operation is running or your investment is doing.
Senior Settlements
It probably doesn’t surprise you to learn that senior citizens are a popular target for scam artists. One of the latest scams is a life settlement scam that’s been nicknamed “senior settlements.” Essentially, it consists of a scammer trying to acquire any death benefits of otherwise healthy seniors. Life settlement scams are also a common scam among this demographic.
Investment Seminars
You’ve likely seen highway billboards or advertisements in newspapers or on television promoting some sort of an investment seminar to help you “get rich quick.”
The good news is that this is one of the more harmless investment scams, as those who attend are usually only out the price of admission and maybe the cost of the book that the speaker is selling about how he/she turned pennies into millions. Some also may be pushing Ponzi schemes, which you should certainly beware of. Usually the only people that are making any money from these types of presentations or speeches are the people that are hosting them.
Now, some might have some great ideas and throw around some clichés to keep the audience intrigued, but at the end of the day you’re not going to be able to get rich quick from watching someone talk for an hour about how they did it.
Currency Scams
People often fall for currency scams because it just sounds sexy. There’s a sort of perception that someone must really know what they’re doing if they’re trading currencies. It’s exotic, sophisticated and takes someone well-versed in the field to pull off.
Because of this, currency trading has an aura of complexity and intrigue around it, key factors that make such so attractive to existing and potential investors. At the end of the day, however, the scam artist is using this aura of complexity and sophistication against you to run off with your money.
You know what they say about smooth talkers…
Promissory Notes
Low risk, high reward — that’s how scam artists position promissory notes, especially when it comes to targeting senior citizens as a means of helping them stabilize finances throughout their retirement.
Promissory notes also have a perception of being “ideal” investments, which again lead to great financial hardships when the victims go on to learn that there was no actual investment occurring in the first place.
When it comes to investments, if it seems too good to be true, it’s likely because that is exactly the case. So, beware when you’re investing, and remember that you can never do enough due diligence when it comes to your money.
Regards,
Ethan Warrick
Editor
Wealth Authority
