Honestly I learned this lesson many years ago when me and my husband were tempted to “buy INTO a business opportunity” that would make us hundreds of dollars for telling people about this amazing opportunity. We just had to sign up three other people with the same passion to make money and understood a good opportunity….hmmmm….
After lots of discussion and counsel from parents who had been through the same thing in their years, we decided against it. After only a few weeks we came to find out that those people that had pushing to have us sign up, had trouble actually getting others to sign up under them, and they ended up not being able to get any of the money they earned because they didn’t meet the requirements.
The moral of this story is “If it sounds to good to be true, it probably is”. You are promised to make “hundreds of dollars” a day from just posting or telling people about this awesome product that everyone will want to buy, and if they sign up under you, you get a bonus…THAT is a pyramid scheme, and the few people on top get lots of money and everyone else gets nothing but heartache and pain.
The best way to “make money” is to pay off your debt, STAY out of debt, and live frugally. You don’t need a $35,000 car if you can’t afford to pay your utility bills…you don’t NEED a $35,000 car period! Get a nice used one for half that price or 1/4 of that price that will perform the same and be affordable. Make smart money choices, don’t try to make up for bad spending habits by trying to make money quick. Manage your credit (get your free credit score here), and keep track of a budget so you don’t overspend.
With the New Year there are lots of people and lots of companies that want you to sign up for their idea, because you can make money easy from home and you don’t have to do much work. While some of these might work out, most of them are scams just to get your “fee” for signing up and then you have a hard time getting others to sign up or there really isn’t anything and you lost your money.
Use caution and think about it, talk about it to other people BEFORE signing up, and think about it some more. Always consult your spouse about this kind of decision. They might have other insight for advice for you as well.
The U.S. Securities and Exchange Commission says to ask five questions before you invest in anything:
- Is the seller licensed?
- Research shows that con-artists are experts at the art of persuasion, often using a variety of influence tactics tailored to the vulnerabilities of their victims. Even a little information about your family, interests, or job can help a skilled con-artist swindle your money.
- Is the investment registered?
- Any offer or sale of securities must be registered, or exempt from registration. Registration is important because it provides investors with access to key information about the company’s management, products, services, and finances.
- How do the risks compare with the potential rewards?
- The potential for greater returns comes with greater risk. Understanding this crucial trade-off between risk and reward can help you separate legitimate opportunities from unlawful schemes.
- Do you understand the investment?
- Many successful investors follow this rule of thumb: Never invest in something you don’t understand.
- Where can I turn for help?
- If you have a question or concern about an investment, please contact the SEC, FINRA, or your state securities regulator for help.
Read more about each of these on the SEC website.
Things to look for when people are trying to get you to sign up for something are persuasion tactics like “Phantom riches” (promises of getting rich quick), “Source Credibility” (telling you they are reputable or have special credentials), “Social Census” (leading you to believe other investors have already invested), “Reciprocity” (telling you, you will get a deal, like 50% off if you buy now), and “Scarcity” (creating false urgency, like you have to buy now or you won’t get the deal).
Just be careful. Think about it and know what you are getting into before you do it.