“Three great forces rule the world: stupidity, fear and greed.”– Albert Einstein
I’m not sure which factor is worse in this triangle of misery. I do know with certainty that once greed sets in, all rationality departs. Intelligent, honest, hardworking, principled people, once blinded by greed, start babbling facts and figures with their eyeballs rolled up in their heads.
This has been common to every scam or bogus investment I’ve come across. Promoters know full well that you will almost never challenge the offering at risk of losing your special invitation to participate in the most secret deal of all time that will make you rich!
In a pure scam, it is intended from the outset that you will get nothing for your money. I consider an “investment” a rip-off if, despite seemingly honest intentions, there never was enough knowledge, responsibility, intelligence, or capital to make the business a success.
Look at this definition:
Greed: An overwhelming desire to have more of something, such as money, that is actually needed.
“Overwhelming” is the key word here. It truly does become overwhelming in the sense that people shut down analytically, and willingly hand over huge sums of money to people they hardly know to achieve a “virtually guaranteed” colossal return. The allure of turning $10,000 into $500,000 or $500,000 into $15,000,000 in weeks does impair some people’s faculty to sort data. Some investor's greed kicks in so hard that nothing can be said to sway them. I have had people fight with me because I wouldn’t go along and could prove the deal was complete nonsense.
Watch for signs of greed “overwhelm.”
First comes the offer of something too good to be true. That is followed by the exhilaration about how much richer you’ll be because of this special offer.
Then comes the jubilant agreement with all the so-called “facts” presented to you. The exhilaration continues peaking – YOU’RE GOING TO BE RICH! Justified thinking starts answering all your questions. Other people you know are getting in on this! They’d never fall for a bogus deal. You can almost smell the money! Someone says, “Maybe we should check this guy out...” “BAH!! This is solid!” Finally, a bank wire is signed.
As an investor, you are responsible for doing the thorough analysis that separates true investment from mere speculation. It is up to you to turn over every stone to ensure your capital is safe. Sadly, many investors have representatives that are supposed to do this for them but they simply don’t do it. Driven by some desire to get that mystical 20-1 return, they take risks with others’ funds they wouldn’t take themselves. They often have no skin in the game but are playing with your money. They have canned excuses when it fails and expect a pat on the head if it ever succeeds.
Next week we’ll continue our series on due diligence and give you some insight on what promoters are, what to watch for and what promoters will tell you to get you to invest!
Subscribe to our blog, you’ll be the first to hear about our updates. Go to www.wiseman-burke.com to get new blog issues!
The Due Diligence Series: Key Factors To Be Aware of When Investing
Subscribe & Follow