Street Smart Financial Basics

It is not easy to make money but often it can be even harder to keep the money you have.

The old saying is still true, if it sounds too good to be true, it probably is. It is always good to remember the old saying when dealing with people you don’t know. It is good to be optimistic but being naive can be very bad for your financial well being.

Plenty of scams are being promoted, that by itself is nothing new. The scams change from time to time but the promotion methods are often the same. Technology has opened new ways for promoters to find potential victims, email, social media and SMS are just some of the new ways.

Often you are invited to a free seminar which is supposed to be full of useful information. But it turns out to be sales presentation, although generally disguised to be an educational seminar. It is generally prudent to be wary of free seminars, unless it is being arranged by a non-profit organization. Companies do arrange free sales promotions but they make it clear that they will be promoting their services or products, not trying to disguise the event as an educational seminar.

Seminars to avoid are those which talk a lot about how cool it is to be financially free, show a lot of pictures of luxury items and is presented by someone who claims to be very successful. Typically, the presenter has a rags to riches story to tell. He was in big problems but when he stumbled on the solution and become successful. Now everyone can do what he has done. All you need to do, is to sign up for a training, offered at a special price but only today. Most common offers are about trading, property and Internet business but almost everything under the sun has been promoted this way.

Here are some of the typical warning signals to watch out for. High pressure sales, you have to sign up (and pay) today in order to get the special deal. Promises about getting rich quick, no experience required and no risk. Sometimes secret solutions or magic software are mentioned, without getting into any details. In essence, the message could more or less be summarized with the statement, just give me your money and I will make you rich.

Before signing or paying for anything, make sure that you understand exactly what is being offered. Especially solutions that are supposed to lower your tax are often presented in a way which is impossible to understand. But you get plenty of promises, the scheme is said to be approved by the taxation authorities, has been vetted by top accountants, no risk despite that the complexity of the scheme and much more promises which all sound very good, at least until you start to look deeper. Make sure that you get all the information and ask an independent tax account for advice. Very often, an experienced tax account will tell you that it is a scam, or call it a high risk scheme, which pops up every now and then, with huge losses for the victims. It seems to work fine in the beginning but once the taxman starts to investigate the scheme, things fall quickly apart.

Trading training and software are being promoted a lot worldwide. Obviously, it you want to try trading, you should make sure that you learn as much as possible before you start trading with large amounts of money. It is well known that there is no secret way of consistently making money or software which will automatically pick winning trades most of the time. Watch out for promoters who claim to have such solutions. How much would software which consistently pick winners be worth? It would of course be worth millions. Why would anyone sell it for two thousands or less?

The number of free property seminars skyrockets when property prices start to increase. Typically, these seminars either offer expensive weekend training or off-the-plan apartments. Or possible both but that has become illegal in several countries. Before paying big money for training, ask yourself if you have any guarantees that you will get more information than what you can get by buying two or three books about property investments. Unfortunately, it has often turned out that expensive 2-3 day property investment training includes less information than can be found in a book for a fraction of the price.

Be very careful with promotions of off-the-plan properties. If you want to be a successful property investor, less than ten percent of all properties are what we could call investor grade. Good off-the-plan project are typically sold out on the first day. Poor off-the-plan project are typically sold with rental guarantees. Unfortunately, this is added to the price paid by the buyer. Worse is that many off-the-plan projects are high-density buildings which are flooding many markets, creating an oversupply which often takes years to get rid of. But the promoters make a lot of money on each property they managed to sell. Unfortunately, the buyers often lose money.

Always be careful when you seem to get free advice from a promoter. It is seldom unbiased information, it may not be information, rather pure sales talk. In most cases, the promoter makes a commission if you buy so some of them may be tempted to stretch the truth. It is prudent to work out who pays the promoter. If he or she is getting paid on a commission basis, you should always get independent advice before paying or signing anything.

It can also be worth thinking about why someone who is supposed to be very successful or have excellent investments opportunities is looking for new clients. Surely the old clients would be coming back as well as tell their friends and relatives about such golden opportunities. Why would there be a need to try to find new clients? Why would such people send unsolicited emails and SMS messages to new people? Could the truth be so simple as that there are no happy old customers?

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