Investing your money is a great way to build wealth over time. The more money you invest, the more you stand to earn. Sometimes, you might even want to borrow some extra money from a legal money lender in SG to have enough for a lucrative investment.
However, not all investments are legitimate. Some are just out to get your money without giving you anything in return. Before deciding to invest in anything, watch out for these four clear signs of an investment scam.
Promising huge returns in just a short time
Good investments take time to grow. If you find any ‘investment’ that promises to double your money in a few months, run away. It is most definitely a scam.
Legitimate investments have more modest returns. Real estate, for instance, often pays back 10% of your investment. And these returns do not happen right away. It takes time for a home to appreciate in value, so you may need to wait for years before you get the returns on your investment.
Claiming to be 100% risk-free
No legitimate investment comes without risks. If someone offers you an investment that claims to be 100% risk-free, you can be sure it’s another scam.
Even well-known investment vehicles like stocks, bonds, and real estate carry risks. For this reason, financial experts will always advise you to invest only an amount that you can afford to lose. The market can move in any direction, so if your investments go south, you can lose all the money you put in.
Having an unclear product or service
Good investments are backed by useful products or services. If you invest in real estate, for instance, an aspiring homeowner can benefit from it once you sell the property. Investing in stocks provides extra capital for companies to produce better products and services. And if you invest in a startup, you give the founders the financial springboard they need to launch their innovative product. Kickstarter projects are popular examples – you can choose any innovative product in their list and be a financial backer of the company behind it.
Any ‘investment opportunity’ without a clearly defined product or service is most probably bogus. If you encounter these offers, scrutinise them. Find out what products or services are being sold. If there are none, or they cannot give you a clear answer when you ask for a profile of products and services, run away.
Hiding the true identity of the company
If an investment is for real, you will always know the name of the company asking for the money. When a company is doing legitimate business, with a proper business model, marketing strategy, and product, they have no reason to hide their identity from investors. In fact, the company name should be the first thing investors will know.
Any ‘investment’ that claims good returns but hides the identity of the company behind it is often a scam. You as an investor always have the right to know what you are putting your money in. If they claim nondisclosure agreements or complicated legal terms to refuse telling you the name of the company, it means they cannot be trusted. Keep your money away from those.
Take the time to find out if the investments you’re planning to put money in are legitimate. Your hard-earned money is at stake, so it pays to make good investments. Make sure you put your money in the best places for it to grow. Be aware of these signs of scammy investments and avoid them.