We don’t want our children to be cheated, therefore we must always be on the lookout fo scams. Teach them how to identify a potential scam and how to avoid losing money though those scams.
Recently in the US there have been some high profile cases of people running what they claimed to be investment funds or hedge funds, which actually turned out to be scams. Biilions of dollar were lost through the scams of these fraudsters. I wont mention names here as some of them are still under investigation, but you can google it for yourself.
Human greed works on both sides of the divide. Comment are greedy and want to make money fast, even if it means compromising principles.
In most the people who invest in a con also give in to greed and take risks they should not. Sometimes they are genuine victims who just lack education. While people who are cheated should not blamed for their loses, they could certainly have avoided it with proper education. You must always know and understand what you are investing in and how the investment works.
Be suspicious of so-called investment that have the following
Promise of disproportional returns
Be very carefu of investment that promise astronomical or disproportional returns in unrealistic timeframes. People say if an investment promises more than 3.5 % per month, it could be a scam. You need to clearly understand how the investment is generating a return.
Investment that keep recruiting
Investment that aggressively keep trying to recruit more people, could also be a Ponzi scheme. A Ponzi scheme is a con that keeps taking in new money from new investors to pay out to old investor claiming high returns. it actually builds up until the total investment from the recruitment of people reaches a climax, the conment disaspear with all the money.