My Take On Money Making Schemes

Psst. I am going to let you in a once-in-a-lifetime deal. 

Black Friday is around the corner, and I have a super sale going on. I am selling the latest iPhone 12 Pro Max for just $299. No contracts, no catch, 100% authentic.

Why am I able to sell so cheap? Because I know someone directly from China who owns the iPhone manufacturing plant and he and I go way back. I was able to broker a once in a lifetime deal to secure 100% original iPhones for cost price to help the needy people get them.

I have already made my success as an iPhone distributor and don’t need the money. I just wanted to give back to society by helping needy students get an iPhone for their studies.

Here is a testimonial from one of them:

“Fatty’s Finance literally saved my life. Coming from a single-parent family, I was always worried about putting food on the table for my son. Now, with a great discount, I was able to afford an iPhone for my son so that he could use it for his remote learning. Thank you, Fatty!”

Q Anon Mum

I only have 400 units available. You will have to pay full upfront and preorder now to secure one unit!

While stocks last.

Hurry! Stocks are running low. 

Definitely a Scam!

The latest iPhone for $299, the first thing you would ask is “is there a catch?” or “is it real?”. 

It isn’t because it is simply too good to be true.

Whenever we see something selling way cheaper online than in retail stores, our spidey sense immediately tingles – something here is not right. 

When it comes to physical products, it is much easier to tell whether something is a scam or not. The price is often the best indicator of when something is wrong.

But what about something more intangible, like an options trading course or a property investment strategy co-investment scheme, is the price a good indicator? 

As a person who writes about finance, I read a lot of finance stuff all over the web. As a result, Google serves me a fair share of ads on investment courses, how to start your e-commerce business courses and property investment strategies. 

How do we know whether the course is as magical as purported? Or will it be a mediocre educational seminar that sells generic common-sense information? 

Or worse still, is it a scam preying on the vulnerable or greedy people?

Here are a few questions you could ask before you get worried about losing out on the next money making opportunity of your lifetime.

#1 Is It Too Good To Be True?

Earn up to 10-20% returns in 3 months with no experience in trading? The majority of professional fund managers struggle to beat the market returns of 7-10%, and yet these gurus could do that? 

Even a 0.1% daily return is equivalent to 44.02% annualized return – you will be in the Warren Buffett category if you generate these kinds of return yearly.

Here is a video of a hedge fund manager sharing his thoughts on the feasibility of the claims from trading gurus

Buy real estate properties with no or close to zero cash downpayment? If so, shouldn’t there be more people owning properties and charging others rent? If anyone and everyone can be landlords, who wants to be renters? I could start building my own trump towers and golf courses.

Start an amazon dropshipping company within days and start earning tens of thousands in revenue for the next week? If it were that easy, shouldn’t everyone be selling on Amazon now? Why bother renting a brick and mortar store and do all the hard work – Amazon fulfills the logistics and shipping for you?

Some of these websites have bold claims, numerous testimonials and rags-to-riches stories which might be exaggerated.  And if you try to read the fine print in their terms (Usually somewhere below the webpage or buried somewhere in the site), you might be surprised to hear their claims are more muted (not as bold as the marketing on the front page about big returns).

In the fine print, suddenly they cannot guarantee you will make the same levels of income

So, before you believe their claims, read their fine print where their lawyers make them say the truth.

#2 What’s In It For Them?

If someone has an effective investment strategy, why are they sharing it with you? What do they stand to benefit? 

Wouldn’t it be more profitable to sell it to a hedge fund or license it out to other investment companies and take a cut from them? 

Or why don’t they use the investment strategy themselves and start a new fund? I am sure many venture capitalists will be eager to invest in their sure-win money-making business.

There is a reason why fund managers or successful investors don’t share their strategies – it is proprietary. Once everybody is aware of their secret sauce, they will no longer have any advantage over other investors. 

If someone has a scalable way of property investing, why are they not in the business of a REIT or a property management company or a real estate developer? Why are they selling education courses?

If they need more people to help them scale their business, why are they advertising a course and allowing anyone in with their secret strategy? If someone wants to succeed in their business idea, they will select their partners more carefully rather than choose anyone that signs up (like MLMs)

Herein lies the irony of many money-making schemes out there: They promise to make you money but in fact, they are making money off you.

Their primary business model is selling educational courses and seminars.

Why take the risk to start an e-commerce company and deal with the uncertainty of the market, the hassle of managing the daily operations when they can sell you online courses for a steady source of income?

The marketing gurus usually claim they don’t need the money – they are doing it out of the kindness of their hearts (It is pure altruism of course). Sometimes, the guru is rich not because of the success of his investment strategy or business acumen, they are rich because of the success of their educational courses.

#3 Who Are They?

If Warren Buffett were to sell an investment course, it would be sold out instantly and probably be a ten-year waiting list to attend the next session.

The person who is selling the course should be credible. We should check their background and credentials to make sure the instructor knows what he is teaching.

Just do a google search on the company or guru in the ad, chances are you might find some useful information about that person. 

A reputable person will be someone who is featured in major media outlets or academic research papers and their achievements which are publicly known.

If you see a lot of negative user complaints about the company, there is a chance the company might not be as honest as they portray themselves to be.

Another red flag is when you don’t see any negative user complaints at all. Some companies forbid their clients from leaving negative criticism by getting them to sign an agreement before they could get their refund. Here is a real example of a lawsuit by the FTC (Federal Trade Commission) on a specific investment company.

Some companies engage lawyers to silence any adverse criticism of them on social media. Some social media influencers had received cease and desist letters for posting criticism of these courses. I am referring to this blog post if you want more context.

Some Tips Evaluating Money Making Schemes

1. Ask yourself, if it is so good, why are they sharing it? What’s in it for them?
2. Please read the fine print on their websites.
3. Search online forums or social media about reviews of these courses. Pay attention to government or regulatory websites on these courses. There might be warnings, police reports or lawsuits about them.
4. Are there other free or cheaper alternatives? Look for similar courses on YouTube, Skillshare, LinkedIn Learning. Go to your local library to borrow books about that topic.

Conclusion

I am not saying that all investment courses out there are scams. I have never attended any, so I have no right to call any of those scams. Some of them might be genuinely useful.

I am also not claiming that the educational courses offer no value. They can justify that the knowledge and experience they offer is invaluable. But will the knowledge or their experience be useful or applicable to all situations? Are they offering generic common sense wisdom that could be found freely all over the internet?

If you want to learn about investing, starting your e-commerce store or marketing, there are plenty of free and practical resources all over the internet. 

Even if you genuinely want to further your knowledge and upskill, you could always take a certification course offered by a reputable organization or institution like the Chartered Financial Analyst (CFA) courses etc. You could add those certifications to your resume, which I am pretty sure is better than putting the “diamond big-deal-closer art-of-the-deal platinum club inner circle member” in your resume. 

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