Top 5 Ways to Spot (and Avoid) Investment Scams

Investment scams have been in the news recently, and it pains me to see honest, hard-working people forfeit their money to lousy, greedy thieves.

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Investment scams come in a variety of forms. Someone may be selling something they don’t even own. They may be grossly overstating the value or potential value of what they’re selling.

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Top 5 Ways to Spot (and Avoid) Investment Scams

If it sounds too good to be true… It almost certainly is. Charles Ponzi offered to double your money in three months when banks were offering 5% per year.

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When investing, you generally earn increased from returns by subjecting your money to increased risk, decreased liquidity, or a combination of both.

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If you learned of an “investment opportunity” via snail mail, an e-mail, a cold call, a knock on the door, that’s an investment that found you.

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While this isn’t enough to safeguard you from an investment scam, if you can’t get the terms in writing, that’s a serious red flag.

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If you can’t understand an investment and explain it to a 5th-grader, you probably shouldn’t invest.

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Selecting an unwise investment is not the only way to become a victim of fraud.

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You can plan to invest with a legitimate company and still have your money swindled away.

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Top 5 Ways to Spot (and Avoid) Investment Scams

Investment scams have been in the news recently, and it pains me to see honest, hard-working people forfeit their money to lousy, greedy thieves.

Investment scams come in a variety of forms. Someone may be selling something they don’t even own. They may be grossly overstating the value or potential value of what they’re selling.

Top 5 Ways to Spot (and Avoid) Investment Scams

If it sounds too good to be true… It almost certainly is. Charles Ponzi offered to double your money in three months when banks were offering 5% per year.

Returns are Promised to be Outstanding

When investing, you generally earn increased from returns by subjecting your money to increased risk, decreased liquidity, or a combination of both.

Investment is Touted as Low-Risk or No-Risk

If you learned of an “investment opportunity” via snail mail, an e-mail, a cold call, a knock on the door, that’s an investment that found you.

The Investment Found You

While this isn’t enough to safeguard you from an investment scam, if you can’t get the terms in writing, that’s a serious red flag.

Insufficient Documentation

If you can’t understand an investment and explain it to a 5th-grader, you probably shouldn’t invest.

The Investment is Too Complex to Comprehend

Selecting an unwise investment is not the only way to become a victim of fraud.

A Note on Wire Fraud

You can plan to invest with a legitimate company and still have your money swindled away.

A Note on Wire Fraud

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