Wednesday, March 12, 2014

Beware of potential scams when investing. Trouble is a friend or foe?

There has been a small discussion on potential scams recently. I've written first on Gold scams in the past here. There was even a family that lost close to a Million in the Gold scam.

So you may ask how do we know if it's a potential scam?

One thing to take note is these companies may not look like scams at first. They actually promise the payout to investors and many got their promised interest. It's only after awhile that the whole thing collapse. Maybe that's their way of attracting more potential victims before disappearing into thin air.
Most of these potential scams offer high return rates on investment. They can be in the range of 12% to 24% return in the period of 1-2 years. I can only say if something is too good to be true, then most likely it is. When faced with this, always question where they invest the money and how are they able to generate the returns? Is the business sustainable?

Take the example of past scams like the popular sunshine empire. It promised high rates of return and you could get back all your investment capital within 10 months. That is a 100% return in 10 month. Sound too good to be true?

One thing you can do is to check if the company is under the MAS alert list here:

According to MAS:
"The Investor Alert List provides a listing of unregulated persons who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS."

What i can say is do not be greedy in investing. If there are doubts, question them and if you do not get satisfactory answers, its safer to stay out. There has been many overseas property investments recently which promised returns of 12% a year or even 24%. Some of these companies are on the MAS alert list too. I will not state them out but if you do encounter them, take extra caution.

A nice song to end this post. Coincidently i was listening to this song and it sort of relates to this post. Enjoy!

Trouble is a friend or foe? Don't let trouble be your friend.


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  1. Hi SGYI

    If it is too good to be true it probably is.

    Just need a good due diligence to do it ;)

    1. Hi B,

      Yup, to add on, when unsure, stay out. :)

  2. There are too many con artists in Singapore finance industry.

    Singaporeans need to be educated on how to be safeguard themselves against these scams.

    Hopefully our blogs can help to contribute to the awareness.

    SG Wealth Builder (

    1. Hi Gerald,

      Yes hope so. We can just do our part no matter how big or small the impact is.

  3. Humans are from animals, and animals have greed, and as long as there is greed (physically and mentally), there will always be scammers/victims around. Just like stock markets, there will always be small fish and big fish, and they are all greedy.

    1. Hi,

      Humans can control greed but sadly many don't control.

  4. Recently, Bottled Wine Group (previously known as The Wine Index) wind up and some investors lost their investments in wines. I was approached previously on wine investments by a fluent speaking angmoh from TWI. After 1 hour phone and sounded my concerns especially on the sale of the wine and proceeds, he gave up. More and more scams around in different forms.

    1. Hi Kenneth,

      Certainly there are lots of scams out there. There is today and there will still be in the future. Its human greed that let's all the scams thrive. Always wanting the shortcut to make more money.

    2. Hi Kenneth,

      Certainly there are lots of scams out there. There is today and there will still be in the future. Its human greed that let's all the scams thrive. Always wanting the shortcut to make more money.

  5. Some points to note:
    Have you done your due-diligence?
    Does the figures add up? Is it a rising trend? What is the demand? Is the business recurring?
    Is the company the direct stakeholder of the investment?
    Is there any capital safe-guard?
    Is the company expanding?
    What is the company doing to ensure the high ROI?
    Historically, does that particular investment able to garner returns?
    What happens if the company cease to exist?

    There is no such thing as too good to be true, but rather how does these factors able to get you the returns.