No matter if you’re dirt broke, rolling in money or just doing okay. This bit of wisdom is something that’s always stuck me – and it comes top of mind anytime I see news stories about financial ruin.
The wisdom is this. If something seems too good to be true, it probably is.
This is the typical punch line to every scam story. The retiree who was sold a dream that cost them their life’s savings, and now has to go back to work. The business savvy investor who took a bad bet on a ponzi scheme, and is now out millions of dollars. The army vet trying to find herself, who devotes years of her life to a multi-level marketing scheme that pressures her into taking on tons of debt – with nothing to show for it. And all these people were promised that their investments were either secure or bound to reap the rewards….if they only keep pushing.
You might even consider the people who unwittingly wire thousands to bad actors on the internet, simply because they’re in love. Even the human experience of finding love can be rife with scam potential.
Which brings us back to the wisdom above.
Life is about taking chances. Every decision we make is a bet, to some extent. We need a healthy dose of optimism to survive and thrive. Growing our money – especially for those of us who don’t come from it – often requires thinking and acting on it in ways that are different from what we’re used to.
And yes. Mistakes will be made, because we’re human.
But where money is concerned, we want to make few mistakes where possible. Some of us simply can’t afford otherwise.
That means we ought to know the risk behind our financial choices, never risk more than we’re willing to lose, and question anyone who suggests that putting our money towards something new – be it a new investment opportunity, business model or romantic relationship – is a guaranteed return.
Specifically, raise those eyebrows anytime someone promises that an investment:
- Will yield a high return – meaning you’ll earn much more than your initial investment over time, at a rate higher than is normal / seems lucky
- Will yield a speedy return – meaning you’ll get rich, quick. You likely won’t.
- Carries little to no risk – meaning you essentially can’t lose your money. You can.
And if you’re not sure whether something sounds too good to be true, do as much due diligence as you can BEFORE deciding to move forward. Ask everyone and everything. Read all the fine print. Look to your feelings and intuition as well, because those are two experts that likely have a good track record of catching red flags. (Yes, even if you didn’t act on those flags in the past).
To close this out – you may very well regret not getting rich off of a good opportunity. But you’ll regret the financial ruin that follows from pursuing the wrong one.
Simple Tips for a Rich Life 