If You Go Into The Woods Today...
And that, ladies and gentlemen, is the secret to investment scams.
You have some money: perhaps for the first time, perhaps it's from years of saving. You feel like you should invest it, but the balance between low return bonds or high-risk stocks has you perplexed. You don't want to invest it blind, of course - you're not a predator, and you know it.
But! Along comes a bear! A bear with five cars, two jets and a freakin' helicopter, fer cryin' out loud! It's a bear who has publicly donated millions for hospitals, police, and universities. He's invited you to dinner with a billionaire, yes with a "B". He's friends with a supermarket magnate, and works with a long time investment company. He owns a $4.5 million mansion.
THIS guy's a predator. And he's saying "Trust me".
That's right - he's a predator who's on your side. He can get you a huge return on your cash. And he does, with the $10,000 you decide to start him with. After all, you don't really know this guy, so you're smart enough not to give him all your money... But out on the golf course a month later (he's paying) he hands you a cheque for $1,000, and that's only the first dividend. Plenty more where that came from, but with a larger investment, it's going to be easy living. Of course, if you were really smart you'd reinvest more and take out smaller amounts; if you didn't need it right then you could reinvest all of it, pumping the profits back in and turn that investment into a perpetual money making machine! Heck, I didn't get all those cars by thinking small. You don't normally think small, do you friend?
Just think of your kids...
Later he invites you to a lavish dinner with $10,000 bottles of wine (and a few for the jet) and tells you how great your investments are doing, and there's a bank in Jamaica that's jst churning the stuff out, already split twice, but only the big investors are allowed in, sorry... Would you like to go down and see it? We could stay at the bungalow I can use as a member of the bank's board.
So what's your property worth, anyways?
I happen to know someone who can get you a great mortgage at a rate that will be a quarter what this investment is going to return. Rock solid, that. I'm sure I can get you in at the bottom, say a half million? Less than the minimum, but we can work something out...
Two years later he files for bankruptcy while in another country - one that doesn't extradite for financal crimes - and you know what was the predator, what was the bait, and what was the prey.
Bottom line: if somebody comes along and tells you he can get a 150% return in one year, but only if you invest BIG; or a perfectly nice guy asks you to do him a favour - and it involves the mail, $3000, and a cashier's cheque; or if he pulls solid gold bars out of his butt (or his Borneo); then you're not getting a deal.
You're getting hunted.