Get-Rich Schemes- Con Artists Lack of knowledge--that is the problem As retirement investments, promissory notes and real estate can be excellent investments.
Or, they can become investment traps for the trusting, unsophisticated investor.
Common sense, practical experience, education, and honest, competent, professional guidance will determine if the investor gets trapped or helped by the investment.
Lack of knowledge about investing in general, and about the specific asset, is the cause of most investing disasters.
Let's examine two categories of investment assets that are currently very popular with con artists and scammers.
Distressed real estate and promissory notes will be the focus.
The economic problems in the general economy and the real estate problems in many parts communities and neighborhoods have generated a huge amount of negative and fear publicity.
This publicity is capitalized upon by the schemers; they use it to reinforce their selling points when pitching to the uninformed and the unsophisticated.
Here are some details on how the pitch-men find a profit using real estate.
Distressed Real Estate Schemes:Because of the collapse of the real estate bubble, real estate Investment offerings have been on the rise-both legitimate and illegitimate.
Regardless of market conditions, legitimate real estate investments are available and can be successful and profitable.
But, in chaotic times, fast-buck artists capitalize on the general climate of fear, uncertainty, and headline publicity to trick the uninformed and the unsuspecting into bad investments.
Bank owned property, properties in foreclosure, homeowner's in distress, pending short-sales, and real estate investment pools have all been used investing vehicles to target the untrained investor.
All of these situations carry substantial risks, and each must be carefully evaluated.
In many cases, it requires an expert to understand and evaluate each of these individual opportunities; to rank them objectively, according to their individual risks and rewards, is not the job of a beginning investor.
The other category of investments that we will explore consists of promissory note investments.
Promissory Notes:During today's times, when a low-interest rate is being paid on all traditional investments, such as bank savings accounts and bank certificates of deposit, investors are investigating nontraditional investments.
Most of these investors are seeking safety of their principal plus a higher rate of return in these uncertain economic times.
In most cases, these investors are like a fish out of water when confronted with a promissory note investment.
They have no experience with notes, their friends and family probably have no experience; consequentially, they are very vulnerable to being tricked by a con artist.
The con man entices them by the promise of big returns and no risk.
These promissory notes give investors a false sense of security with promises or guarantees of fixed interest rates and safety of principal.
However, all investments, even legitimate ones, in promissory notes carry some risk that the borrowers may not be able to meet their obligations.
As in all serious decision-making situations, an experienced, trained, objective, professional advisor can save the novice investor thousands of dollars in losses and many, many sleepless nights.
Red Flags: There are signs of danger--red flags-- to watch for when discussing a potential promissory note investment with a salesman, representative, promoter, or selling investor.
Certain phrases should put you on your guard.
Here are some examples: "I'm a promissory note salesman, and I'm here to help you.
" "I hear your question.
Don't worry about it now.
We'll get to the answer later.
" "This is a hot deal.
It's selling fast.
Everyone want to get in on it.
Hurry and decide now.
"