How to tell if an investment is a scam
THE STACK #11Last week, I shared some of the different types of investment scams that exist.
Today, we will go over some of the red flags that could help you identify shady investments.
If you see any of these red flags...RUN!!!!
THE STACK
Asking to invest on your behalf
Scammers usually ask you to give them some money to "invest" on your behalf.
They make the investments sound exclusive, like it's something only they have access to.
They usually make these types of statements:
"I can mentor you on how to make money."
"My goal is to help people become rich."
"Our platform is legit."
Never give anyone money to invest on your behalf unless it's a licenced and VETTED Robo-advisor or Investment Broker.
Exaggerated guaranteed returns
Scammers usually claim that you'll receive high returns in a short amount of time.
Most people looking for a quick win fall for this.
No investment is guaranteed or risk-free.
Even legitimate investments that promise guaranteed returns all come with some level of risk.
Anyone that promises you guaranteed, risk-free returns is a thief! Run very far away!
Watch out for these trigger words:
"I can double your money in 2 days."
"Give me $1,000 to make $11,000."
"I guarantee you will have your capital and 30% return by Friday."
"I will pay you from my share if it doesn't work."
If you're already making so much money, why are you still hustling me?
Sob story
If there's anyone who knows how to talk a good game, it's a scammer.
They know how to tell stories that appeal to your pain points.
They often start with the rags to riches story of how they were working a 9-5 and got burnt out before they found this opportunity. Now they have achieved financial freedom, their family is happy, and they want to help you too.
Cool story, bruv, but I'm not interested!
High-pressure tactics and FOMO
They usually don't give you enough time to do your research.
You hear words like :
"We only need one more investor on board, and I have ten people waiting. So you'll miss this lifetime opportunity if you don't get on board now."
"I don't usually help many people, but a spot just opened up."
"This will change the game."
"You're the first person I'm telling this"
These scammers pay to go to conferences to learn how to sell and reel you in.
The signs are not always as apparent as you think.
Always do your due diligence and never rush into any investment without understanding all the risks associated.
You don't have access to the asset
Because it's a scam, no real asset is usually invested in.
You don't get direct access to the investment or investment account.
You can't potentially sell your investment if you want to.
Always ensure you can access your investments or the platform that holds your investments. In addition, you should receive annual statements of how your assets are performing.
They are not regulated.
Any investment or investment platform that isn't regulated is one giant fraud waiting to happen.
No one can hold them accountable for money they steal.
Most people get attracted to these types of platforms to avoid paying taxes but end up losing their life savings.
Don't get scammed while trying to play smart.
Ensure the investment platform is regulated (see below).
As much as I want you to become an investor and start building wealth, I also want you to protect your wealth from leeches.
❖Always do your due diligence before you invest.
❖ Fact check every income claim. If it doesn’t appear on Google…chances are, it’s a scam.
❖ Only invest with reputable registered platforms.
❖ Talk to multiple people that have experience with investing so they can go over the details with you.
Stay vigilant.
THE TOOL
Check if an investment platform is legitimate
Investment platforms and brokers go through different levels of regulations to protect YOU, the investor.
These are some of the regulatory bodies we have in Canada.
Do a quick search of the company to see their registration or licencing details.
If they don't show up here, please don't give them your money!
Fraud prevention websites
Is there an investment you're not sure of? You can go through this list of existing frauds to see if the investment is legitimate:
THE ACCOUNTABILITY
Did you update your passwords?
REPLY with "Updated" 👍🏾
If you didn't, you can find time during the week and block off one hour to secure your bank and investment accounts.
There has been an alarming rate of fraud lately; do your part to stay secure.
THE COURAGE
THE KNOWLEDGE
Who is an investment broker?
An investment broker is a person or institution conducting investment transactions on a client's behalf.
They act as a middleman between an investor and the securities exchange.
Investment brokers are required to register with a securities exchange commission and be members of a self-regulatory organization.
That's all for this week.
Keep stacking and protecting that dime!
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