This post may contain affiliate links.

You should always be looking for new and exciting ways to invest your money. As a result, you will be able to grow your wealth and continue making more money. Every single financially stable person in the world has their hands in a few different investments. Diversification is key, often making you seek out new ideas and opportunities. 

Consequently, you often come across investment opportunities that stand out from the crowd. You take a close look at them, but they almost seem too good to be true. At this point, the alarm bells should start ringing in your head! If something seems too good to be true, there’s a high chance it could be a scam. How can you tell if you’re investing in a scam or not? Look for these three telltale signs:

There’s a guarantee

Normally, guarantees are a great thing! You love a guarantee when buying something; it gives you confidence as you know you’re guaranteed to get your money back if the product isn’t up to scratch. So, why would a guarantee be a warning sign in this scenario?

Well, nobody can ever provide a guarantee for an investment. The very nature of investments means that there’s an element of chance involved. You’re spending money with the hope of seeing returns in the future – and nobody can 100% predict the future. If there’s a guarantee, it’s probably a scam as you’re being made to think there’s no risk involved

It’s almost too cheap

How much money do you have to put into this investment? What’s that? Hardly any at all?! Hmmm. 

In scenarios like this, you’re right to feel skeptical. Investment opportunities usually require a decent bit of investment, particularly when compared to what you get out of them. A recent example of this was the Website ATM scam where businesses were promised that their sites could start churning out loads of money, all for under $50. It just doesn’t make sense as the person providing the investment will get no profit from it. Effectively, it goes back to the original point; if it seems too good to be true, it’s probably fake. 

They aren’t registered

Legally, all legitimate investment companies need to be registered with a government agency. The SEC is the most common one, but any agency will do. If you’re looking at an investment opportunity, and the provider isn’t registered to any government agency, that’s the biggest red flag you can find. 

You have to ask yourself, why aren’t they registered? In most instances, it’s because they know what they’re doing is a scam. So, they can’t register as the government wouldn’t let them operate! Realistically, this is one of the first things to look for when judging investments – if they’re registered, check for other telltale signs. 

It is so easy for someone to fall victim to an investment scam. People are always out there trying to take your money, so you have to be cautious. If you ever suspect that something isn’t right, look for these telltale signs. They will help you figure out if you should give the investment a go, or back away with all your money intact.