Last Updated on Mar 5, 2020 by James W


How To Recognize Investment Scams

There are hard times we live in and the prospective of earning an extra buck may look appealing to many of us, especially if we already are in debt or run two jobs to make a living. While many people assume hard work and engage in working from home activities, become freelancers, open small family enterprises or play some money in small trades and investments, other are instantly attracted by big and apparently danger free investments which promises them to earn large sums of money over night.

You might get lucky and stumble upon the business of your life time, while a very large percent of these appealing “get rich without trying” opportunities are in fact large investment scams well played by ruthless people. Back in the day, there were the Nigerian letters, a world-known financial scheme that made a significant large number of victims before people understood the mechanics of the scheme, but frauds get born and get creative every day.

Just as Timothy Sykes – a financial mastermind who helped authorities countless of times to identify financial scams – says, sometimes the authorities do their job in time and catch the frauds (just as it happened recently with the case of the $140 million penny stock scheme). But it’s not consultants or DA’s who need to be vigilant with our investment choices, but ourselves. So before jumping on the next train to Richie Rich’s land, here are some signs that a new investment opportunity that is presented to you might be a bankrupting scheme.

  1. The Holy Grail

One day you find an e-mail coming from a person you don’t know, who presents you with an amazing opportunity of making money and him and only him can pull the job, as he has “inside” information. Now really: if a person just got fired from a company and indeed he or she has inside, classified information which can be used to extract some cash from the said company, why would it share it with you? Why would anybody you don’t know come to you and just offer you the opportunity to become rich?

  1. The Blackmail

You new found protector promises you the deal of your lifetime, provided you invest some money in it, not much – otherwise it would be too in your face – with a reimbursement guarantee to make it legit, provided you send your money fast, as the offer expires very vey soon. So you’re trapped between promises and a deadline. Tough choice. Another blackmail alternative is to make you feel so special, you’d might end up thinking the gods of money have a plan for you. You were the first contacted due to your incredible personality or some vague recommendations. You are one of the ten chosen specials who deserve to take part to the miracle. There is room for just only one participant and you don’t want to miss the ride. Just don’t fall for gratuitous compliments and last minute offers looking to have come down straight from Heaven. They didn’t.

  1. The Transparency

You’re asked to send money to someone to invest in something that is almost secret and infallible. However, you’re promised that there are no secrets, no passwords; you don’t have to open a new e-mail account, a new bank account or something of the sort. Everything is so open and doesn’t ask any type of effort from your part, you can’t stop but wonder: if it’s so easy and effortless, why isn’t everybody on the planet already a billionaire?

  1. The Grand Scheme

They will present you a plan. A plan so complicated and apparently so well designed, usually containing numbers, charts, flows, and the mandatory graphic showing you how your investment will pay off endlessly just in the next three months, you will be dazzled with the scrutiny. If you don’t understand a word of what they say, means there’s nothing to understand.

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One of the most common such scheme is the “pump and dump” penny stock scam and the 100+ millions Timothy Sykes described extensively on his site included 9 people who schemed naïve investors from 35 countries and included brokers being bribed, call center companies being used, fake documents being issued, fake promotions being released through PR means, penny stocks fraudulent manipulation and so on. So before investing in some new and promising futuristic technology, the next flying car or a new method of extracting oil, think about a group of people grinning and rubbing their hands, just waiting to rip off your life savings.


Founder and chief editor of Blogger, Affiliate Marketer, Tech and SEO geek. Started this blog in 2011 to help others learn how to work from home, make money online or anything related to business and finances. You can contact me at