How to avoid getting caught in a ponzi scheme
POSTED: Wednesday, November 25, 2009 - 3:03pm
UPDATED: Thursday, June 3, 2010 - 10:59pm
They offer to take your money, and in exchange, give you a big return on your investment.
But before you know it, the investor goes under, and your life savings are gone.
"It's terrible...they just took our life away," said Julia Threeton, a recent victim.
So how do you make sure your investment is a safe one?
Marcel Dupre' owns Wealth Planners Investing in Baton Rouge.
He says the first thing to know is who you're dealing with.
"Anywhere that somebody is looking to use something, some relationship that they have to leverage that for trust, you should be careful," Dupre says.
Avoid investing with someone you know from a social group, like church.
Dupre says it's an easy way to get sucked into a scheme.
Next, when you do sit down with a potential investor, watch out for buzz words like, "time is running out".
"This is a unique opportunity that they're only offering to you...that it is an opportunity based on some inside information that they have."
Dupre says schemers will try to convince you they have the magic touch on investments, and you should act now.
"You should run away because it's just not possible."
The last thing to do before writing that check: do some reasearch.
Dupre says government websites have information on every registered investor.
"They will have links to check out a broker, investment advisor, financial planner, that type of thing."
But it's not all bad.
Investors say the recent financial fraud shouldn't stop people from putting some money away.