It seems like every other day, a company, investment opportunity, or influencer is getting exposed for scamming people or being fraudulent in some form or fashion. It truly seems like fraudulent practices are more rife than ever before. Behind the headlines are thousands of people who have lost considerable money. If you’re on a journey to become financially free, you’ll most likely come into contact with investment experts who can lead you to financial ruin if you’re not careful.
Whether it’s your favorite influencer trying to sell you on their NFT project or crypto coin or taking stock tips from popular YouTubers, there are many ways people have found themselves victims of a scam with no recourse or way to reclaim the money they lost.
When so many experts out there promise you that their program, project, and advice will take you to the next level of wealth, how do you separate the real ones from the frauds?
Here are steps to protect yourself from investment scams and avoid falling for them.
Do Your Research
Before blindly putting all your chips into an investment, due diligence must be done. You have a wealth of information at your fingertips, and you can use that to find out if you can really trust a program. You can ask more knowledgeable people about it or very simply do a quick search of what people on the internet are saying. If you’re thinking of getting into an NFT project, look on forums to see what people are saying. If you’re thinking of extracting some money out of your home equity, look around for reverse mortgage reviews to see the most trusted resources and providers. Before you make a move that risks your financial future, do your homework, so you go in with open eyes.
Don’t Buy on FOMO
With social media, it’s very easy to get swept into buying something just because people can’t stop talking about it. It’s easy to follow the crowd thinking they know something you don’t. The problem is, very often, there isn’t much substance behind the hype, and many people follow investing trends because of FOMO. Thousands of people have been fooled because they followed the crowd. Before you listen to what an online forum advises you to do, ensure you’re not being driven by irrationality but rather by sound investing fundamentals. Please make sure you actually see under the hood of the investment before putting money towards it.
Don’t Invest What You Can’t Afford to Lose
One of the best pieces of investing advice is often neglected to the peril of many people. We’re often told not to invest more than we’re willing to lose, but time and time again we see people go all into something, risking all their financial stability. For example: taking all your savings and putting them into one risky investment instead of only putting a portion towards it. The problem is, if this investment doesn’t work out, you’ve lost everything, and that’s catastrophic. Sure, it’s worked out for some people, but that’s not always the case, and you’d rather be on the side of caution.
Be Careful With Influencers
Many people have lost a lot of money because they put too much stock into what an influencer said. From influencers telling people to get into risky Airbnb investments to recommending specific companies they are actually getting paid by, it’s not always wise to listen to them. Influencers can get people to buy things because of the strong parasocial relationship between them and their audience. Buying software is one thing because they recommended it, but following investing advice is another and not very wise.
Be Skeptical
As the adage goes, if something is too good to be true, it probably is. Nowhere is this truer than with the many investment opportunities in today’s world. Most shady investments typically have a ton of red flags like unrealistic returns, a lot of hype, pressure to invest quickly, or a lack of transparency. If you apply skepticism, you will be able to see past the smoke and mirrors and see the truth.
To be financially free and build wealth, you must make smarter decisions as an investor. A big part of that is separating the phony from the factual. By following these steps, you can increase your chances of avoiding investment scams and protecting your hard-earned money. Remember, if something seems too good to be true, it probably is. Always be cautious and do your research before investing in any opportunity.
In conclusion, Investment scams are a serious issue, and protecting yourself from them is important. By being skeptical of unsolicited investment offers, doing your research, checking for red flags, verifying the legitimacy of the investment, not blindly following influencers, and being wary of high-pressure sales tactics, you can reduce the risk of falling victim to a scam.
