How To Spot A Scam

Photo by Roy McMahon

Have you ever been scammed? Have you ever experienced being told to invest in something that is guaranteed to give you good money, only to realize that the business you invested in was a complete scam and the person who asked you to invest in took your money and was never to be found or heard of again?

Friends, I have been scammed several times already trying to make money online. I get suckered into purchasing or investing in several software or websites that guarantees you will make money in a few days if you follow or use their system. Only to realize in the end that their guarantee is a big lie and their system won't make the money that they promised.

Then there's also those that you hear in the news where they dupe people into investing in their business and guaranteeing big interest rates for their money, only to be discovered as a big ponzi scheme or will close down in a few years (or even months) then just run away with all the money they got.

It's not fun being scammed. You believe in the promise. You get excited. You enthusiastically invest your money because you believe that this will be your road to financial freedom. Only to be hit in the face with with a business, product or service that is full of baloney and will never make you money.

I don't want you to be scammed. That's why I'll share with you what Bro. Bo Sanchez shared on how to spot a scam in his WealthStrategies.

1. Insane Interest Rates - Have you ever been approached by someone to invest in their company and promises that you'll be getting 4% interest rate per month? That's a scam right there. Why? Because that is an insanely high interest rate, that real companies won't be able to pay to their investors. 4% a month adds up to 48% a year, meaning you're suppose to get almost half of what you invest in a year. That's clearly impossible for any company to sustain because most of their profits then would go to paying off investors, nothing left for operation and other expenditures. Companies who offer high interest rate usually operates a pyramiding scam. It is called a Ponzi scheme where the business pays off old clients with the money they get from new investors. This scheme will always require new investors to come in to keep on paying the interest rates of old investors. Once they fail to get new investors, the business will eventually die.
2. Guaranteed High Interest Rate - Didn't you notice that only banks provide guaranteed interest rates? They are allowed to do so by the regulating body because they only offer a measly growth for your money (less than 1% a year for savings account and about 3-5% a year for time deposit). No company or bank will guarantee a high interest rate because they won't be able to afford it. Companies who guarantee high interest rate won't be able to stay in business for long because they need to operate a scam to be able to keep the guarantee.
3. You Can't Understand How They Earn Money - A business' primary goal is to make money. It needs money to pay its employees, pay the suppliers, pay the government and other fees needed for its license and permits. In short it needs money for it's operations. So if you're offered an investment opportunity and the person you're talking to can't really explain how the company makes money, you better walk away. Earning through trading in foreign currency or the stock market is not a legitimate way for a business to earn money, because the volatility of these markets would prevent any business to consistently earn good money for its operation cost alone, let alone pay its investors.
4. It's Just Too Good To Be True - When you encounter something that is too good to be true, it usually is. Have you received an email or a text message that says you won a big amount of money? Too good to be true right? These messages will usually require you to pay upfront fees needed for the transaction process. If you do, then it's goodbye money.
5. They Seem To Be Good And Credible People - Scammers usually use people who seem nice and honest to do the selling for them. Most likely, these people are also as ignorant as you are of the scam that is happening. But there are those who are just really good pretenders. So just because the person you talked to seemed nice and honest, doesn't mean that what they offer is already legit.
6. Your Financial Adviser And Financial Manager Are The Same - If the people who advises you about your money is also the one who manages it, then you are threading in dangerous territory. Your financial manager has control over your money, he's the one who invests it, so he can actually run away with it. Your financial adviser is the one who advises you on what to do with your money. So if your adviser and manager is one and the same, then what will keep him/her from advising you to invest in something that will gain you nothing but will gain him/her everything?

Scams are everywhere. It's important that you always do your due diligence first and research thoroughly about the investment opportunity before you invest your hard earned money in it. At the end of the day, it is you who has control on where you put your money. So do your due diligence first, so you won't be scammed.