There was a time when a fool and his money were soon parted, but now it happens to everybody.
– Adlai Stevenson 1835 – 1914 23rd Vice president of the US
This quote has a bit of consolation in it as it infers that you don’t necessarily need to be a fool to lose your money anymore. As the quote is over 100 years old it seems that the issue has gone on for some time.
Scams are very prevalent today and are especially targeted at seniors because the world is far more complex than it was 100 years ago, 20 years ago for that matter therefore more confusing. The joke used to be buying swampland in Florida . What is it now? Bitcoin? Hyper inflated stocks that really have no basis on fundamentals? Phone scams? Romance scams? The list is endless. What can we do to protect ourselves? Believe nothing? Some things are true though.
Guidelines to spot scams
As I have been duped myself in the past, here are some guidelines that I follow:
Remember your station in life, if you are not a wealthy person then whatever hot stock tip or investment you are being offered is likely to be complete BS. Real deals of this nature never get to nickel and dime investors. If there is a real opportunity here then big money has already scooped it up.
The sense of urgency is the biggest giveaway of all. Today it is called FOMO (Fear Of Missing Out). This is not a new idea. If you have to decide NOW or you will miss out, then most likely a scam. The reason for the urgency is so that you have no time to think it through or do any research which today is very easy to do. Just Google it.
Particularly when you are at a social gathering, your guard is down and you are supposedly among friends (which includes members of your religious group), you are far more likely to be less suspicious of an “incredible deal”. This is a popular place to present Multi Level Marketing (MLM) schemes which as far as I know are impossible to actually make money at without fleecing the sheep so to speak.
FOMO
Write a check now and “we will do the paperwork in the morning”. Self explanatory but in the heat of the moment smarter men than I have written large cheques to a smooth talking con man.
It might seem that this is all quite obvious but there are always new twists on old ideas making them more complex with new technologies. There is one consistent factor though: FOMO. If you have to decide to part with your money RIGHT NOW then better to err on the side of caution unless you like gambling with total loss as the likely outcome.