There is a very easy way to lose all your money when investing – getting scammed. There are a few steps you can take to make yourself more susceptible to scams.
Taking advantage of investment offers is an easy way to give away your savings. The reality is that “risk free” returns over and above a savings account don’t exist. As the potential return goes up so does the associate risk of losing money. Anything offering a guaranteed return over and above a savings rate is only to be trusted if you want to lose your money.
Working with ‘advisers’ who pressure you in to make decisions quickly can help you lose money and fall prey to scams. There’s nothing like a deadline or a time limited offer to get people to make rash decisions. Whilst you don’t want to procrastinate and let inflation erode your money for years, there are very few investment decisions that cannot wait a few weeks.
Failing to check out the platforms, funds or products you are investing upfront thoroughly can also cause substantial losses. Savings and investment scams often go undiscovered for what can be many months or years because it is easy to send statements and updates on how fictious investments are performing. Its only when you actually want to get your hands on the money that you realise it is no longer there.
Sending money to the wrong account is another way to say goodbye to your savings. Fraudsters who have hacked email accounts can use the information in your email to generate legitimate looking personalised emails. For example, there have been cases where when buying a house, people have been emailed details purporting to be from their solicitor with details of where to send the funds to complete the purchase. In fact, the email is from a scammer who has found out from their email account about their pending housing transaction and has been able to create a realistic looking email but using fake bank details.
For most people making their investment portfolio up of mainstream assets, i.e. shares, bonds and property held through a regulated provider and doing a few simple checks upfront, will prevent them from becoming a victim of fraudsters.