Remember when you were a kid and your parents got out the credit card to pay for something? It was like magic — instant wealth that could be yours as soon as you got a piece of plastic of your own. Throughout history, scammers have taken advantage of this childlike wonder to convince people of strategies which seem to make quick and easy money. Immunize your children against get-rich-quick and too-good-to-be-true deals by teaching them what to look out for.
Up-Front Investment
Most get-rich-quick strategies require an up-front investment of your time or money. You are promised a huge reward in the near future. A talented scammer will do everything to hide the ugly truth; if you buy into the scheme, the scammer will have made his money while you wait for yours.
In these scenarios, financial turmoil is your only safe bet. Many scammers will burden you with an unreasonable time constraint for deciding whether to join the scheme. This is to prevent you from rethinking your position. A scammer’s only concern is taking your up-front investment. Afterward, your own financial success is inconsequential.
Limited Understanding of the Strategy
If you take the time to think about it, get-rich-quick strategies never make financial sense. For example, one of the most popular of these strategies is the pyramid scheme. This scheme encourages you to sell a product while enlisting a group of people to join the sales effort with you. The creators of the scheme are funded and even marketed by the recruitment of thousands of salesmen for their product. Meanwhile, you lower the demand of your own market will never sell enough to make a profit.
In addition to pyramid schemes, other get-rich-quick strategies are equally illogical. The owners of these scams profit on those with limited understanding of business strategy. To avoid getting scammed, you should never get involved in a company that attempts to distort their financial records in any way.
More at Stake than Money
Losing money in a get-rich-quick scheme is a terrible feeling, but it’s not the worst possible outcome. Some scammers may present you with schemes that require personal records like your social security or credit card numbers. If you’re not careful, you could end up with a stolen identity.
Worst of all, however, is that some of these scams put your family at risk. Someone may convince you to sell your life insurance while your family still depends on you financially. Should the worst happen, prematurely selling your life insurance policy might result in a lot of stress for your family. If you feel you are in a good position for a life settlement, make sure you’re talking to someone with your best interests in mind.
Ultimately, almost all get-rich-quick strategies are scams. Anyone promising an easy paycheck is likely looking for their own. At the end of the day, hard work and perseverance over time hold the keys to acquiring wealth, and these are the skills that will help your children succeed in life.