Con artists

Con artists are everywhere and they have been around for many years. Recently the Internet has brought many new players with many new schemes, reaping millions of dollars from every day Australians.

Some of you probably may not believe how gullible some people can be and you will probable swear that this will never happen to you. But BE CAREFUL - sooner or later your desire to make quick money can make you vulnerable to these schemes.

Here is an example of what happened in America few years back:

Mr Conman approached investors and offered them an opportunity to invest in one of his "money making" investment plans, guaranteeing returns of 50% within 60 days. The only small problem, as he explained to the potential investors, was that because his investment ventures were so successful he could only accept maximum of $5,000 from each person.

At the expiration of the 60 days, Mr Conman sent to all investor a cheque for $7,500. So basically he delivered what he promised. And in the minds of the investors how good was this? 50% return in 60 days! Wow!. You wouldn’t dream about it, would you?

About a month later, Mr Conman contacted the same investors with a phone call to thank them personally for supporting him in the previous campaign. After the pleasantries were over he made them another offer to make 50% return – but this time he told them that as a special thank you he has removed the maximum limit of $5,000 and the investors could invest as much as they liked.

So what do you think the investors did? Did they refuse him? Did they decline him? No, of course. And why would they suspect anything when they had just earned 50% in 60 days.

The story goes on to say that Mr Conman the second time around, after he earned their trust collected just over $46m and disappeared. Eventually, he did get caught and he ended up in jail

The moral of this story is that unfortunately the process of “investing” is all about “emotions”. We like to hear about things that sound good rather than analyse them for they are worth. ASIC continues to advise that “if it sounds too good - the chances are it is too good to be true”.

A famous investor once said: “There are no successful short term investments but there are plenty of people who will take your money if you believe that there are.