investment
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. The scammer may be making promises they can’t keep, writing checks their butts can’t cash.
The difference is that these investment returns are certainly not promised or guaranteed. You make the investment knowing that the worst you could do is lose all of it and have nothing left. If all you are shown is incredible or unlimited upside with little or no downside, you’re probably looking at a scam.
There is no such thing as a free lunch. When investing, you generally earn increased from returns by subjecting your money to increased risk, decreased liquidity (ability to cash out your investment), or a combination of both.
If you learned of an “investment opportunity” via snail mail, an e-mail, a cold call, a knock on the door, or a tip from a fraternity brother, that’s an investment that found you. Be suspicious. Social media is the latest playground for these scammers, and it’s a fertile pasture. Any time an investment discussion is redirected to private or direct messaging.
Before you entrust someone with your money, you can do a bit of research on them independently. Additionally, just because it’s in writing, does not make it true. Some promises aren’t worth the paper they’re printed on.
If you can’t understand an investment and explain it to a 5th-grader, you probably shouldn’t invest. If a system, strategy, or algorithm gave someone a big leg up on the competitors (other investors earning market returns), why would they share it with the competition?