Be warned. Policemen, financial supervisors, consumer protection activists are giving you often advises about the suspicious signs of fraudulent investment offers, scams. One sign is always on this lists: cheater are promising too much. Mostly incredible yields, in short time and with absolute security, of course.
Huge offers selling itself
“Good wine sells itself” (“El buen vino se vende sólo”, supposedly a Spanish proverb), good offers don’t need advertising. Yield-hungry, greedy people are transmitting, sharing the information one to other. The “company”, or gang, don’t need much money to advertise, and authorities will be alarmed much later on this way. Scammers can easily promise what they imagine – they don’t want to repay the money, in any case.
Need bigger lies
They are taking advantage of the greediness of people. The higher the yield, the more the greed, seemingly. May be here comes also the effect what nazi leaders allegedly said: “The bigger the lie, the more it will be believed.” Wikiquote or Wikipedia
Risk and yield
In reality, for greater yield, you have to risk more, and if you wish lower risk, you have to be satisfied with less yields. That is a strong law in the investment world. Almost like gravity, or any other natural phenomenon we can’t change.
Sure, some anomalies happen, but arbitrage abolishes them quickly. (And if somebody finds a profitable market anomaly, takes all the loans possible out and makes his own trades, without telling it anybody.)
Are you a princess?
With one sentence: Do you still believe in fairy tales, princess? What seems to be too nice, is mostly not true, or too dangerous.
Some people can make a fortune with shares, forex or commodities, but on a high level of danger, risking heavy losses. Many people never could do it. The same can be true in the crypto-world: early birds got rich, but now, there are so many greedy people wanting to earn their millions…
Risk or crime
I don’t think history can repeat itself. May be we get all rich, but may be only some of us and the others will loose. The risk is extremely high.
So, if somebody tells you about ten percent a month, or 50 percent a year, you should know, it’s a highly dangerous investment, and, with 99 percent possibility, a scam. Or some illicit, dark business.
Free meatballs
If this investments or businesses were real, nobody wanted to buy shares, Wall Street wouldn’t exist, neither banks, brokerage firms. Nobody would work and all would be happy. Free meatballs falling from the sky, like in the movie Cloudy with a Chance of Meatballs.
Nomen est omen
But read about some other signs you should be alarmed with. The “company” mostly has a nice, noble name, often similar to the name of well established financial groups. Some examples from an international warnings database of a financial watchdog:
– 1st New York Financial Corporation (USA)
– AEG Financial (Hong Kong)
– Goldman Sachs International (clone!, UK)
– Sachs Trust (Switzerland)
– Sachs International, S.A. (Canada, Hong Kong)
– Goldman Shaks (PVT) Ltd (UK)
– Morgan Capital Partner (UK)
– Morgan Singleton Associates (Sweden)
– Morgan Stanley & Co Ltd (clone!, UK)
…and “Goldenschild”, and “Rothman(n)”, several clones of the USB Group, and so on, there are hundreds of names on this lists. Always check the identity of your business partners. An other alarming sign is if the company has its seat on some small island or mini-country.
Island paradises
This seats have multiple advantages: not only lower taxes, also lower administrative requirements – no real licence required. Money laundering is also easier. And, may be, better escaping chances if it’s getting hot for them. (Some big international companies or finance groups also have offshore companies, but it’s another story.)
Take money and run
A fourth alarming sing: the brokers or agents of this fraudulent companies are mostly extremely aggressive and persistent. They can do it, they are very well paid, because the group doesn’t need to generate real yields.
Mostly, some early people will be paid from the money of new ones, and if the system gets unsustainable, or the authorities are approaching, leaders take the money and run away. (“Ponzi scheme” or “pyramid scheme”.) The same story, over and over again. Don’t be victim.
Also read: Is Bitcoin The Largest Ponzi Scheme In The World?
Disclaimer:
I am not a financial advisor and this content in this article is not a financial or investment advice. It is for informative purposes only, or simply to make you think, entertain, increase testosterone and adrenaline level. Consult your advisers before making any decision.
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