Your total net worth can actually put you at risk for being scammed. Most of the scam artists out there won’t really care about how you got your money, they just want to take it from you. The best way to ensure that you don’t become victim is by being prepared ahead of time.
Here are a few of the best tips to keep you from becoming a victim of fraud:
Ask plenty of questions. Most of the time, people that are looking to scam you out of your money will focus on the fact that most people don’t ask enough questions before investing their money. You will not want to just ask them for more information, you will also want to ask for references and do your research about them before putting money in their hands.
Do thorough research. You will want to make sure that you take some time to gain a full understanding of the business and what they have to offer before you invest money with them. Before you buy stock in a company, check out their financial statements. Most companies file with the SEC, and you can take a look at their reports. If they do not file with the SEC, then you should do some extra research. You will not want to rely on unsolicited emails, message boards and press releases to make your investment decisions.
Know who you are buying from. You will want to make sure that you get to know the person that you are dealing with directly. This is true even if you already know them on a social basis. You will want to make sure that you know whether or not they are licensed and if they have had any type of negative run ins with others.
Stay away from unsolicited offers. If you receive emails that are unsolicited, chances are it is not a wise investment. Most people that commit fraud will use unsolicited emails and other internet postings to help them sell shares to the public. Also, check to ensure that it is not an offshore investment, as this can really get you into a world of financial trouble. Sending your money abroad is really never a good idea.
Be on the look out for the following red flags:
- If something sounds too good to really be true, then it probably is. You will often hear about great deals that are potentially low risk, but they turn out to be scams.
- If they guarantee a return on your investment, then you might not want to do business with them. All investments have some form of risk, and you can never really be guaranteed a return.
- If their site is well designed, but something just doesn’t seem quite right, pass it by.
- If they offer you a “once in a lifetime” deal and want you to send them money immediately, look elsewhere to invest your money.