We have all heard that before, haven’t we, but people continue to be pulled in by schemes that are never going to work (except for the promoters). 

Sometimes it is hard to tell a good investment from a bad one.  All too often, we hear about investment schemes that promises high investment returns and generous tax breaks.  In fact the promises of high returns, is the one common denominator in these ‘get rich quick’ schemes. There has to be the promise of mega wealth for greed to overcome people’s natural caution.  

These promises of untold wealth for little work should be warning signs that something is not right. There is nothing more certain than the axiom that a higher return means a higher risk.  

So how do you tell the good investment opportunity from a dud? Some questions you might ask yourself. 

(1)     Is the promoter licensed?

(2)     Is the promoter an individual or an institution?

(3)     Does the product have a Product Disclosure Statement?

(4)     Are the risks of the investment explained?

(5)     Does it sound like there is some illegality about it?

(6)     Most importantly, does it sound too good to be true?

The ASIC website, http://www.fido.gov.au can also be helpful as lots of scams and warnings are contained there.

Have you come across any of these promotions? Tell us about any you know about so we can warn others.