This week, one of my coworkers came into my office all excited and gave me an investment tip. I’ve gotten used to receiving tips, because everyone knows I invest and I love to talk about investing. Today’s tip was something unusual and unfamiliar to me, investing in the Iraqi Dinar. According to my friend, I can buy Iraqi Dinar for pennies each and they will be worth a couple dollars each, as soon as the UN recognizes the Iraqi currency.
If it Sounds too Good to be True, it Probably Is
I admit I was intrigued by this opportunity to make some money and I jumped right into research mode. The first thing that came up was a ton of Google hits for Iraqi Dinar Scam. Luckily for me, there were a dozen red flags that warned me to avoid this scam. My friend wasn’t so lucky, since he already invested in the Dinar and it could turn into a total loss.
Many of the people on the forums complaining about this scam had paid many times what the Dinar were worth and they weren’t aware that Dinar are only redeemable in Iraq. If the Iraqi Dinar is ever accepted back into the global monetary system, they will likely be re-issued, making the existing notes worthless.
The Smell Test
There have always been fraud and scams, as long as there have been people to swindle. Since the age of the Internet and email, it has become possible to scam thousands of people all around the world, from anywhere on the planet. It’s more important than ever to check the fundamentals of any opportunity, before you invest your money.
Taking investment advice from a friend or associate can be a costly mistake, since they may be just one step above you in a scam or a Ponzi scheme. Or, they may not understand the fundamental risk and value of an investment, causing them to overestimate what its worth. Before you act on someone’s advice, always verify the investment’s fundamentals for yourself.
Den of Thieves
Wall Street has become a rigged casino, with investment banks and hedge funds looking out for themselves, instead of their customers. Often, they are betting against their own customers and profiting from the bad positions they have recommend to them. Insider trading is rampant and the SEC only catches a fraction of the people and companies engaging in fraud.
Even your friendly neighborhood investment advisor has to earn a living by recommending fee-laden products. And, sometimes they have been known to skip town with their client’s assets. Investment advisors can be a valuable resource, but you must verify they have your best interests in mind.
The Bottom Line
The bottom line is investing has become a minefield of shaky investments and conflicts of interest. Don’t wander in without first looking where you are about to step. After all, the first rule of investing is to not lose money.
“Beware of false knowledge; it is more dangerous than ignorance.”
George Bernard Shaw – Irish Playwright
Mint Blog – New Investment Scam: Buying the Iraqi Dinar
Bucksome Boomer – Secrets to Avoiding Work at Home Job Scams
Stumble Forward – Seniors are being Taken Advantage to buy Life Insurance
This post was featured on the Carnival of Personal Finance over at Make Money Online. If you aren’t familiar with the Carnival of Personal Finance, you need to check it out. It’s the greatest carnival on the net.
This post was also featured on:
Thank you for the links to my blog.