In this series, I have been sharing some thoughts on some fundamental rules of money management that are time-tested and known to be true. If applied, these rules can help you take your finances to the next level.
Rule #5 If it sounds too good to be true, it is most likely a scam.
Call me cynical, but most “too good to be true” and “get rich quick” ideas are great ways to throw money away. It would be better to just set fire to your money. I remember a day several years ago when this “great deal” presented itself to me. “All you need is $1,000,” I was told. Once I would turn in my $1,000 (it was required in cash – hello? – can you smell the scam cooking?), I would secure a slot. Once eight other people gave $1,000 under my slot, I would receive $8,000. Little did I know that I was being introduced to a pure form of a Ponzi scheme.
It seemed like everyone was jumping in. I know several of my co-workers did. It was a “hurry, hurry, hurry” mentality. “If you don’t jump in NOW,” I was told, “you will lose the opportunity.” This was back when I was busy writing the “I Was Broke” part of I Was Broke. Now I’m Not. so I did not even have $1,000 if I wanted to participate.
You already know what happened. The folks running the scheme took all of the money and vanished from town – never to be heard from again.
Here is what I have discovered – when you are B-R-O-K-E, you are way more susceptible to get-rich-quick schemes and scams.
Be calm. Be patient. Use the real power of compound interest to fund your hopes, plans and dreams.