How to Avoid Falling Into Scams?
One of my friends invested his money into an “investment partnership” with a company and asked me for comments. I checked and realize that this company is on the “MAS Investors’ Alert List”
Please go to this url for the list of companies on MAS Investors’ Alert List (listed in alphabetical order from A to Z: http://www.moneysense.gov.sg/check_our_ ... l_IAL.html
He asked me what he can ask in order to be alerted to possible scams?
I share with him that one simple way for you to do that is to ask:"How exactly are you able to do that?"
So example, they say, we can pay you 2% per month or 24% per year.
You ask:"How exactly are you able to do that?"
The reply might be: we use a variety of investment strategies to get this sort of return.
Again you ask:"How exactly do you do that?"
Unless and until they can give you very clear answer, if they CANNOT, it is very clear this is a possible SCAM!
To be financially smart, one of the things to do is to have "common sense".
Most scams "play" on the emotions of "greed" in human being. They would tempt you by promising EXCEPTIONALLY high returns. They try to "lower your perception of risk" by telling you the minimum investment amount can be as low as $10,000 or even just $1,000.
They know that most people adopt "double standard" for their money. If they risk $10,000, they might think twice, if it's $1,000, they might just go ahead. That's why most scams try to use a low "investment amount" to "lure" people in.
However, common sense would make you ask that if they can deliver 24% returns per year, they don't need to go "down so low". They can go for minimum investment amount of $100,000 or even $1 million and there'll be "queues" of people queuing to invest.
So why do they bother to deal with the "small investor with $10,000 to spare?
Whatever I said also come from "street smartness". I grew up in the streets of China Town in Singapore, thus I've attained a certain level of "street smartness" that most people lack. Because they never had the "opportunity" like I did to witness with my eyes what happened in the streets.
This lack of "street smartness" is also one of the key "disadvantage" that most young S'poreans have vs their counterparts who grew up in developing countries such as China, India, Malaysia, Vietnam....and the list goes on.
That's why S'poreans are welcome in many countries. Becos many Singaporeans are very easy to "cheat".
What I said might not be nice to hear, but in my opinion, they are true.