As a former owner of a real estate business and a stockbrokerage firm I am often asked to give investment advice. With interest rates at almost zero and a stock market that’s gone nowhere for the last 10 years, people are under tremendous pressure to make more money on their investments. There are many options to conside, but not all of them are in your best interest. So what can potential investors do to avoid getting taken? It is an amazingly simple common-sense rule: If it seems too good to be true, then it’s too good to be true—so don’t invest!
The world is full of people who want to ‘help’ you get rich, translation: They want to get their hands on your money. Protect yourself by looking out for certain words and phrases that can be warnings. Some of the most common “magic words” used to describe an investment opportunity are: free, secret, sure-fire, anyone can do it, always, no-risk, foolproof, insider, confidential, the smart money is on, nothing down, easy money, magic, not a get-rich-quick scheme, become a millionaire, just a few hours of your spare time, almost nothing to do, and makes-you-money-while-you-sleep. Even one of these words or phrases should be taken as a red flag warning to walk away. If you see more than one, run!
You don’t get high rewards at low risks, or for little effort – and there are no secrets. In the stock market, by the time a stockbroker calls to tell you the ‘smart money is on’ buying a particular fund or stock, you’re either too late or they’re just saying what it takes to sell it to you.