Sunday, May 8, 2011

How Avoid Get Rich Quick Schemes?

It is amazing that today we still have people falling victims of real estate and other Internet scams. Just in March of 2011 a con artist man who ran a defunct get-rich scheme agreed to settle a court order by paying the Federal Trade Commission $900,000 and surrendering the proceeds from the sale of his house and most of his personal property. Mr. John Stefanchik was found guilty of blatantly false claims that his "wealth building" (know as the "Stefanchik Program") program would teach consumers how to quickly make serious money by buying and selling mortgages. These get rich quick program sold them consumers the idea that they could earn huge amounts of money in their spare time, upwards of $10,000 every 30 days, if they purchased the Stefanchik program; instead most customers failed to earn a dime. Victims typically paid $5,000 to $8,000 for the worthless program, but only Stefanchik and his cronies got rich.

It is truly incredible that in today's environment this type of scams still happens. The sponsors of these schemes usually profit from selling the opportunity than from the opportunity itself. A get-rich-quick scheme is any project or method that promises a high amount of return for a relatively small investment. These get-rich-quick schemes also promise that these high returns will come with a minimum amount of risk or work. Something that most people seem to forget is that return is a function of risk which would make all the get-rich-quick schemes too good to be true. That should be the first alarm when one of this scams are presented to us. Another point to remember is that these scams have a low percentage of success stories relative to the number of participants. They will blast their websites with testimonials, showing their big checks they have made. However, what is their percentage of success when calculated over the total of participants in the program.

Due to the public scrutiny, most of the illegal programs have to chose underground methods to promote their programs, such as cold calling and spam emails. The reason is that the public scrutiny placed upon the traditional media channels, makes it difficult for illegitimate enterprises to prosper for long periods without being exposed. The illegitimate enterprises tend to use emotional triggers and confidence building to motivate participation. They often place emphasis on the exclusivity of the opportunity to make it more attractive.

Here are a couple of tips you can use to prevent falling victim of scams:

1. Surround yourself with good, wise people who can advice you well and then listen to them.
2. Become aware of your strong desires and their influence over your thinking.
3. Write down your decision and the reasons for it, then put it away for 24 hours and come back to it and check it.
4. Do not give in to impulsiveness.
5. Wait for a decision until your spirit is calm and your mind is clear.
6. Never violate your conscience.
7. Never do something if financial gain is the only reason that you are doing it.
8. When in doubt - don't. Trust your instincts when they tell you to pause and think it over.
9. Avoid manipulative people and high pressure situations.
10. Check the numbers and the fine prints before signing anything.
11. Stay in control, do not let others control your decision making.
12. Know the difference between character and personality and have a healthy distrust of "Charming People".
13. Know the difference between opinions, facts and projections.
14. Carefully look at all aspects of the opportunities - Strengths, Weaknesses, Opportunities, and Threats (SWOT)
15. Do not let pride and ego fashion your decision.
16. If it seems rash and risky it probably is. Ask Who gains and how?
17. Do not make major decisions without a moment of meditation.
18. Never make a decision when you feel harassed or stressed, tired or hungry.
19. If you have to rationalize the decision and manufacture excuses why you have to do it, then you are probably trying to do something that your better self knows that is dubious or wrong and it is trying to warn you.

I have provided to you 19 tips that will help you prevent potential mistakes in your business decision making. This list is not all inclusive and there are other steps you can take to prevent being a victim of a scam artist. The best thing to do is to take a moment and analyze the opportunity before rushing into a decision. One of the best tools that a scam artist has is to pressure into an immediate decision because they know if they let you go to think the chances are that you will discover their scheme.

2 comments:

  1. I appreciate you and I would like to read your next post. Thanks for sharing this useful information.
    when you start a business then at first you need every business related news. we find a real news that help for your business.
    forex factory news, financial news, forex trading

    ReplyDelete
  2. It's really appreciable message for everybody thanks for sharing this information.
    Aim financial news
    AIM Mining news
    AIM Small cap shares

    ReplyDelete