Investing One of the most dangerous things financially for many people are investments. Many of them are similar to a crapshoot and others only make money for the agents pushing you into them. There are also schemes which look really good but are designed to steal every penny which can be wrung out of you. In modern times one of the most famous financial criminals was Bernie Madoff. He managed to even fool seasoned investors who couldn’t resist the lure of high returns. Madoff did this by giving a few important people far more money than they invested and telling them it was their return on their investment, knowing full well these people would recommend him to others. It is important to note this is how a pyramid scheme works. A few people at the top will make money on their investment so they can be used as examples. Madoff never actually invested any money in anything. Anyone who has a television set has been subject to the commercials for silver. They have been told if silver returns to its previous high, they will be rich if they buy the silver at the price it is now. This is hardly a scientific reason to purchase silver. In many cases one can say if a certain item ever reaches the highest pointed it ever was in the past, they would make a lot of money buying it today. I am not a financial advisor and I am not rich so I would suggest no one should rely on me to try and figure out what is a good investment. Having said that there are some things which just stand out as being very bad investments. There are also many schemes which are obvious. I would go as far as saying I would be very skeptical of any investment offer, I received by email. The overwhelming chances are they are either a scheme or not a good investment. There are plenty of legitimate places one can go to, to be advised on financial investing. Think of it this way, when somebody tells you in an email or otherwise if you follow their advice you become rich by making certain investments, why aren’t they doing it? A great example of this is your bank. Banks have financial advisors working for them. They’re the ones who are trying to get you to buy mutual funds and such. The average financial advisor in the bank is said to make between 42,000 to 82,000 dollars a year. I think this proves my point. If the investments they were trying to get you interested in were that good wouldn’t they be making a lot more money by investing in them themselves and getting higher paying jobs? Some emails actually suggest you send a deposit to reserve your place on some sort of list for getting inside information. This should send up a huge red flag. The funny part of this is since the stock market is roaring a lot of things will go up in value and of course the so-called advisors will take credit, yet some of them do no research at all. This may not be very obvious when things are really good in the market, but as things subside it begins to show. That is the time when research is needed, which means these people would have to actually work to accomplish anything and this separates the men from the boys. There are just so many things to beware of while investing. Some people get the idea into their head they can buy precious stones like diamonds below what they are appraised for and hold onto them as they go up in value. I don’t know much about precious stones, but I do know a couple of things. The first thing I know is the market is controlled and if it wasn’t diamonds wouldn’t be worth anywhere near as much as they are. The second thing I know is appraisal values on common diamonds are usually much higher than the real value. You can verify this yourself just by looking at television and watching the commercials for the Diamond Exchange, when they tell you if you buy their diamonds, they will appraise for much more money than you spend. Do you think if your diamonds were stolen the insurance company would pay you for the appraised value? No, they might not even agree they are worth as much as you paid for them. Of course, this doesn’t apply if you bought the Hope diamond or a very famous diamond. Some people believe they can make their fortune by buying what are known as penny stocks. These are usually very small companies or companies just starting out and the stocks are extremely risky. Here is the thing about penny stocks which may sound hard to believe, but nevertheless is true. The companies which issue him have close to a 100% failure rate. One can say the rate of failure is so high no one should invest in them. The problem with penny stocks is the companies are weak financially and can’t even meet the minimum standards of the stock market. Many of these companies are newly formed or approaching bankruptcy and are also prone to scams. Most investors have a rule. It is a rule everyone should observe and yet I’ve seen it violated many times. The rule says never invest money you cannot afford to lose. This means more than what you think it does. I say this because I’ve known people who have mortgaged their homes and invested the money in what they believed was sure things, only to find out they lost everything or lost most of their investment. It is bad enough to lose money but now these people was saddled also with debt, the debt of a mortgage. You might say how could they be this stupid, but some people do it to help out other family members who want to start a business for example. I know people whose son wanted to start a restaurant and was a certified chef. He might’ve been a great chef but he did not know how to run a business and within a year the business was bankrupt wiping out the equity in his parents’ home. No matter how much one person believes in the talents of another, they should never get into an investment this deeply and risk everything they have. Investing is a tricky business and you can understand why people want to do it, especially when banks are paying very low interest. Before anybody invests money, they should go to a well-respected investment company and one which increases their profits, has a good reputation and has a very successful record.
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