Red Flag Investment Schemes

It seems most of my friends and acquaintances these days are less focused on blowing money to show off and more interested in building generational wealth, which means a lot of the conversations I have about finances are geared towards investments. It’s a pretty awesome shift to see in my generation, but one that still comes with a lack of information and in dire need of some warning signs. Everyone knows that we should be investing, but not a lot are quite sure how.

In this post, I’ll try to touch on some red flags to be weary of when you start researching for a compatible investment vehicle.

1. If it’s too good to be true, it probably is.

General life rules still apply when it comes to investments, maybe even more so. If it sounds too good to be true, walk away. There isn’t an investment scheme on the planet that’ll guarantee you a million dollars if you put in a $999 and refer a friend. And if you find one, let me know. Immediately.

2. Your understanding of an investment vehicle is key.

It doesn’t matter that your “advisor” seems to know what she’s talking about. At the end of the day, it’s YOUR money, so YOU need to know what risks are involved (and there’s always a risk), what your potential gains are, the terminology used at inception, and all the basics of any investment package that you plan to move forward with.

3. Pyramid schemes and scams.

If you need to send money in the next three hours or risk missing out on an incredible investment opportunity, it’s a scam. If you have to write out a list of your top 20 friends and acquaintances who you can call into invite only meetings with fruit platters, bottles of water, and conversation about this incredible new product, it’s a pyramid scheme. Don’t get caught up in either. You’ll waste your time, and your resources.

4. Trust your intuition.

One of your most influential investment tools is going to be your intuition. If something doesn’t seem quite right, then chances are, it’s not quite right. Engage a professional, do your research, and make sure you’re making the right choice for yourself and your family.

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