Top 4 Signs You’re Dealing With An Investment Scam

Top 4 Signs You’re Dealing With An Investment Scam

Many people picture out successful investors to be riding in sleek cars, going to fancy dinners, sail on yachts, and just have the time of their lives. What many people don’t see is the hard work and discipline that goes into investing. 

But the flashy cars, upscale houses, glitz, and glamour can easily suck in an aspiring investor like you, especially when these things are hyped all over social media. When this happens, you can get blindsided, your emotions will run high, and then the next thing you know, you got roped into an investment scam. If you’re willing to go down a rabbit hole about real financial scams and experiences, this website is a great place to start with.

Like the victims of that website linked above, you may also find it difficult to spot an investment scam, especially when you’re new to investing. It’s even harder to detect if the supposed investment is being offered or introduced by someone you know or trust. 

Fortunately, there are early signs that can tell you that you’re dealing with an investment scam. Below are four aspects that you must watch out for:

1.Guaranteed High Returns Within A Short Time

When you’re guaranteed high returns within a short period of time and with no risks whatsoever, then run. This is the hallmark of an investment scam. Always remember that ‘if it sounds too good to be true, then it probably is.’ 

No legitimate bank or investment company can promise high returns within a short time since it would be unsustainable. Sure, you can earn high returns from stock investments and trading, but all these come at a huge risk. Such risks are usually made known to you by your broker, financial advisor, or are written in a contract.

Initially, investors of a financial scam get their returns as promised but since it’s impossible to maintain, the whole scheme eventually collapses. So, over time, investors will lose their money, except those who were able to withdraw their investments before the scheme went bust.

2.Recruiting Is Highly Encouraged

Let’s say your friend, who earned huge returns from a supposed investment company, has also urged you to invest. They tell you that you can enjoy high returns, too! Then, when you browsed through your Facebook feed, you saw that same friend sharing about their newfound wealth and is urging others to invest in the same company as well. It’s time to take a step back and take that as a red flag. 

Investment scams can confidently guarantee high returns at the start because their source of income is through new recruits who pour more money into them. Again, this isn’t sustainable. Once the recruits dry up, the money dries up as well. This system is also known as a Ponzi scheme.

3.Appeal To Emotions

This is a tactic used by ‘investors’ who are pressured to recruit or by the head of investment scams themselves. Scammers are pretty good at this, and they can use your desires and weaknesses to their utmost advantage. 

For example, if you have children, they’ll be saying that the returns will be enough to put your kids through college. They may also tell you that you can pay off your debts or mortgage once you trust the system and invest.

There are many ways for investment scammers to appeal and manipulate you through emotions. Sometimes, it comes in the form of social media posts, webinars, or online meetings. It’s easy to hype up a high lifestyle on Instagram, for example. You may also have entered a webinar where young people talk and flaunt how they went from zero to millions, then show off their mansions, fast cars, private jets, or yachts. 

All of these are simply appealing to your inner desires and emotions. Legitimate investment companies will show you figures, facts, and numbers instead. In other words, dealing with real investments is boring and it’s not hyped and flashy like what social media will make you believe it would be.

4.Details Are Vague

As an investor, it’s normal to ask questions. You’ll be putting your hard-earned money into this company, so it’s expected to have hesitations, clarifications, and questions. Real investment companies and potential investing partners will understand this. Again, they can show you hard facts, statistics, numbers, graphs, taxes, and market analysis to help you decide. These facts and information are also constantly updated and are distributed to investors quarterly or monthly if needed. In other words, legitimate investing companies are transparent.

But if you’re dealing with an investment scam, you’ll only be given vague details. Aside from guaranteeing high returns, nothing else will be explained to you. Other investors may even discourage you from asking hard questions. At most, they’ll just repeat their promises and even appeal to your emotions and desires again. If you prod for updates and details, the answers will be vague, and you may even be referred from one person to another without ever finding out the real deal.

Final Word

A quick way to check if an investment company is legitimate or not is to go to the Securities and Exchange Board and then verify if the company is indeed licensed or registered. If it’s not listed there, then it’s a scam for sure. 

However, some investment scam companies can still produce legitimate documents and proof of registration. But your due diligence shouldn’t stop there. You must still be wary and observant. Most of all, take note of the signs explained above and make sure that none of those are present.

5 Tips to a Successful Investment Journey

Investment Journey Tips

A journey is confusing without a map the same way the journey of the financial world is impossible without a pre-planned chart or strategies. You cannot start investing without a plan. You will probably waste your money anywhere or everywhere. You have to look up according to your convenience and resources. Financial planning never comes easy, without the chain of steps. These steps guide you based on your money and outflow. Here, we will introduce five tips for a successful investment. It’s a long way to go through the small steps that we take.

Start Investment
In today’s time, the process of growing your wealth must comprise investment. Focus more on investing the right way and right proportion. It needs a lot of hardship in the financial world to grow as an investor. Identify your goals, define your investment approach and then play your process of investment accordingly.

Acquire Knowledge of the Market
Grow your interest by investing in the stock market and making informed investments. Read books or take courses on investments dealing with modern financial strategies. There is much worth reading text like stock for the long run by Jeremy Siegel, that will explain to you about the high levels of finance. Investing consists of science as well as art. It has principles and also quality. It’s required to learn about every aspect of investment. Grow up your market knowledge. Once you know what works in the market and what does not work, you can formulate simple rules regarding your investments.

Define of your investment strategy
Nobody knows your financial condition better than you. You should go according to the plan so that you can get the best out of your investment. You can consider consulting a financial advisor who can give you the best possible measure by which you can get more returns on your investment and can help you in planning for future investment. He will help you select out the best investment alternative according to your financial goals and risk appetite.

Right investment guide
Your level of resources will define your path of investment. Always differentiate in the options you have. Don’t rush in one way. Be careful about what you invest and where you invest. Start with low risk and learn gradually. Adopt long term investment for an optimistic future. Always try to take help from the financial advisor regarding investment because he is the only person who will guide you in the best possible way in regards to your investments.

Long term investments
Sticking with a long-term investment strategy may give you benefits for future decisions. Owning assets is one of the most beneficial steps in growing up your financial status. Your chances of success will increase if you stay in the course without letting your emotions take charge of your practical life.

Learning to be a successful investor is a gradual process. The market will prove you wrong sometimes. Believe in your strategies and be on the runway for the long term. In the end, a conclusion comes to like to explore various types of investment alternatives. Risk is an inseparable part of the financial world. Set your bar from low-risk investments to high-risk investments. You can’t expect miracles without putting in efforts. The result of your investment will be the reflection of your effort and hard work. Invest smart, not high if you invest a small investment in the right way.