The Top 10 Investment Scams To Watch Out For

Investing hard earned-money can be an intimidating and scary endeavor for the average person with no investment experience. However, education is the best defense against getting ripped off by con artists. Paladin Research & Registry has compiled a list of the top ten investment scams investors should watch out for. (https://www.paladinregistry.com/uploads/media_file/filename/96/Investment_Scams__5_.png) 10. Annuities When structured favorably, annuities can be a solid choice for retired investors looking for a reliable income stream. Unfortunately, many financial advisors will take advantage of the inexperience of older investors and sell them terrible or out-right dishonest policies. 9. Investment seminars Before anyone pays good money for a ticket to an investment seminar, they should ask themselves this question: if the get-rich quick strategy actually worked, why would the lecturer be giving seminars for a living? 8. Prime bank scams Anyone trying to sell high-return investment opportunities that they claim are "typically only available for ultra-wealthy clients" is likely a scammer. 7. Unregistered investments If Photoshop can make Kim Kardashian look skinny, it can certainly make fake security registration documents look real. Investors should double check to make sure that securities are registered properly. 6. Life settlements Many peddlers of life settlements take advantage of terminally ill seniors and gullible investors willing to invest in fake policies. There are better ways to make money. 5. Investing in precious metals Again, the idea of diversifying in precious metals by buying into reputable funds like SPDR Gold Shares ETF

or iShares Silver Trust ETF

is certainly reasonable. But investors should be leery of investing in companies claiming to hold bullion or own interest in a productive mine. Website images are meaningless; images of gold bullion can be downloaded from Google in a matter of seconds. 4. Currency scams The average investor does not understand the complicated terminology and trading strategies involved in currency trading. If you choose to invest in something you don't understand, your fate (and your money) hinges solely on the trustworthiness of the person(s) with whom you are in business. 3. Loans There's nothing complicated about loan fraud: you lend your money to a person or business, and they send you fake statements every month indicating interest accumulation that does not exist. 2. Promissory notes Promissory note scams are a slightly modified version of loan scams: you give someone money, they give you a piece of paper saying they will pay you back the money in the future and then they disappear. 1. Ponzi schemes Ponzi schemes are the most successful financial scam of all times in terms of dollars lost. The beauty of the Ponzi scheme is that early investors do much of the selling on behalf of the scammers via word-of-mouth. Early investors actually get paid the returns they are owed out of a pool of the later investors' principal. Of course, the constant growing need for new investors eventually catches up to the scammer, but by that time millions of dollars can be lost forever.