How to know what is “too good to be true?”

How to know what is “too good to be true?”

I do believe we receive many offers to invest our hard earned money. If we are promised that our investment into whatever scheme can get a 1% return every month and it’s guaranteed, is this too good to be true or well, it’s just 1%, surely this is possible, right? Let’s talk about 4 things today about this 1% return per month then.

#1 – Time too short

For any investment to work, it has to be invested into some business which is PROFITABLE. For this business to be profitable, it has to sell something, goods or services. In other words, there has to be time for this transaction to be completed and the business to earn a profit. This usually does not happen in a short period of time and may not happen for a lot of companies. Please do ask any successful business owners how soon they actually started to get profits and most of them will tell you more than 30 days… So, AS SOON as we invest, the return starts the next month is really “too good to be true.”

#2 – Guarantee not possible in real world

No business can guarantee that they will be profitable. Unless of course it’s a monopoly. Then again, if it’s a monopoly, it will gain exceptional profits. If it is gaining exceptional profits, I really am not sure why they want us to invest into the business. They could have easily gotten a bank loan instead which may just charge them a lot interest rate as well as all the flexibilities of a business loan too. The interest rate will be way lower than the 1% per month which they are paying to any other so-called investors. If it’s guaranteed and they could not get a bank loan, should we not wonder a little more?

#3 – Return is just too high

1% return is too high? Charles you must be joking. I am not. If I am the CEO of a bank and I learnt that there’s a business which pays 1% return per month, I will push all my investments into this business versus subscribing to bonds or even investing into overseas market. Get real. 1% per month means 12% per year! As a bank, I am only paying my customers 1.8% for their Fixed Deposits. If I could get 12% returns, I can even offer my depositors 3% and I will still gain 9% without needing to do anything much! Haha. Not true?

#4 – Why YOU?

Are we the best friend to the owner of the business? Are we the best friend to the best friend of the owner of the business? Is the owner of the business a very close relative whom we know very well? If we have no relationship with the owner of the business at all, then are we the best friend to this friend who’s pitching this super deal to us? Is this friend pitching the deal to us the best friend to the owner of that business? Or he / she also does not know who the owner of the business but they are just marketing the programme?

I be honest. If I have a business which can give 12% returns per year, I will NOT offer it to any stranger on the street. Not even to casual friends. Maybe to some good friends. Maybe to more close friends. Should be to family members. This is why this is another “too good to be true” deal yeah.

Too good to be true will always be around

These days, everything seems possible, right? That’s precisely why everything can also be faked. That’s also why marketing is getting so advanced that they could convince us to buy something we do not need or leave aside after buying them. We do need to read more because if it’s too good to be true, it’s also important to be able to recognise them. Else, another scam case may be reported in the near future. Thanks for reading.

Property News Malaysia? Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER). Alternatively, Follow me on Telegram here.

Please LIKE FB page to get daily updates about the property market beyond articles. Else, follow me on Twitter here.

Next suggested article: 5 Must-Do steps for property investment.


Leave a Reply

Your email address will not be published. Required fields are marked *