Avoiding Investment Scams: How to Spot Red Flags?

Speaker A00:00:02

Here's something that was really surprising to me. Did you know this in the US in 2024, $5.7 billion, that's B with billion with a B was lost to investment fraud.79% of that people lost more than $9,000. And here's the really sad statistic of this whole thing. Those who were age 60 and more lost the most.Now, most of that was in crypto scams, which was $5 billion in losses. Not a pretty picture, right? And that's when I got this question. I said, you know what? I've got to talk about this as part of our investment series.And this listener wrote this. She said, ralph, I keep hearing about people losing everything to scams. How do I know what's safe and what's a trap? That's a great question.Because it's a scary thought. Think about the amount of money and the people that have been taken advantage of.When talk about my grandfather again, he was one of my big mentors in my life and he said this to me and this is a truism of all truisms. He said, son, he said, if it sounds too good to be true, it usually is. And I think we all can learn from that.I could probably stop the episode right now. You say rap, I've heard enough. It's the truth though. If it sounds too good to be true, it usually is.But I want to go a little deeper than that because the truth is scammers prey on fear and they prey on greed. But with discernment and with a few red flag checks, you can protect yourself. So let's figure out how to do that on today's show.This is Financially Confident Christian, your daily dose of gospel, grounded insight and faith driven tips to help you break the cycle of financial shame with confidence. Hello there. Welcome. Thank you for joining me. I'm Ralph.I appreciate you joining me on this journey as we continue on this series of investments and as we talk about investments, one of the things that come to mind was we really have to worry about investment scams. Because those statistics I started with today are really scary, aren't they? They're real people. Those are real losses.Those real people that have experienced that.And I think back to my 30 years of doing accounting work and I've seen these scams firsthand as part of when I was first starting off in work, I was the president of the Delaware association for Bank Security and actually worked as a fraud investigator. And when I did that, I had no idea of the person that's involved in this, these are real victims. There are people who have lost everything.I'm talking about years of their savings, years of their blood, sweat, tears, investments, all the things they've done. And it makes me so angry because people just prey on people like that. We've got to stop this.So one of the ways we can stop this is start with educating folks. And that's exactly what I'm going to accomplish today on the show.I never forget, I had a client one time, he called me and he says, ralph, I got this telephone call the other day. This guy was online. He said, ralph, he guaranteed me a 20% return on this investment. He said I had to make a decision right away.I want to stop there for a second because one of the big giveaways to an investment scam is if you feel any pressure, it's the first thing these scammers do. They prey on that pressure. They tell you you have to act quickly. And a lot of people, we live in a culture right now.I don't care where you live in the world. It's this fear of losing out. You see stuff on social media like, I gotta be a part of that. I gotta jump on the bandwagon.And when somebody calls you and says, I got this great idea, Ralph, I can double your money. Maybe you're struggling financially. You're like, ralph, I've got this mountain of debt. I need to pay it off. I want to start saving.Somebody calls me and says, ralph, I got this great idea. Of course, in our flesh, we think we could do this. But thankfully, this client, he paused and he said, Ralph, I want to ask you about this.He came in and we had a conversation, and it was clearly a Ponzi scheme. Now, Ponzi schemes, a fancy way to say that one person at the end was not going to get paid, but the others were going to all feed into that.And if he hadn't thought about, he hadn't reached out to me, honestly. And I'm not taking, you know, the. I'm not taking it saying it was because of me. But he wouldn't have reached out. He would have lost it all.And I'm going to talk a little bit later about this ver a verse from the Proverbs, but it warns us this the simple believe anything but prudent give thoughts to their steps. So let me take a pause right now. Have you ever been a victim of this? Have you know somebody that has been a victim of this? It decimates their lives.It destroys the lives. It destroys dreams. So let's today talk about how to prevent that. Here's the first thing I'm going to tell you. Legitimate investments involve risk.The first thing, if somebody says to you, ralph, this is a guarantee, there's no way you can lose money, I'm going to tell you right now that's a scam. Because anybody who is a legitimate investor is going to tell you there is always risk. There's risk in every single thing you do.You could put money in a US bank account, yes, it's insured up to a certain amount, but there's risk there. We gotta understand that first. All legitimate investments involve risk. There's no sure thing.The other thing that I've seen in my years of doing this, scammers rush you. The reason they rush you is they don't want you to take time to think about this. They don't want you to go back and say, let me call my friend Ralph.Let me call somebody that understand these things. They don't want you to investigate that. That's their main method is to rush you. They use fear, they use intimidation. And here's the goal.Their big goal is to catch you off guard. They want to use your greed. Because, listen, as human beings, as flesh, we all experience greed from time to time. Yes, we're struggling financially.We want to get that killing. We want to make that money. We want to get that huge investment that looks so fantastic from the outside.It looks great looking at it from the outside. And they catch us off guard. They want us to move quickly. Oh, you got to take this right now.If you get off this call right now, we're going to lose out. If you get off this email link or whatever that is, they want you to do it right then and there. So that's another thing.Look for unregistered individuals or anything that looks shady. A lot of people say to me, ralph, I looked at this paperwork, I should have known it.Yeah, listen, if your gut is telling you this looks shady, guess what? It probably is. And that should stop you immediately. Just hold on. It's fine to say to them, listen, that sounds great.I've had phone calls like this myself. They called him and said, raph, I've got this great idea. And I'm on the phone, I'm listening. That's a really great idea.I get to the end of the call and I say to him, I love this idea. Here's what I want you to do. Send me all the documentation. They're like, well, wait a minute. You don't want to miss out on this.I'm like, that's fine. No, cool. I don't want to miss out on you. Absolutely. I am sold. Let's do it. But send me the documentation first. And they're like, oh, they started.So next thing you know, you don't hear from them again. That's because they're shady. Ask for documentation. It's your money. It's okay to ask that. Another thing I want to tell you is trust but verify.We live in a world right now where it's hard to trust people. Ronald Reagan, former president, United States, said this when he was dealing with the Soviets during the Cold War. Is a great thing.He said, trust but verify. It's okay to trust people. As Christian believers, we need to trust people. We can't live in a darkness and think everybody around us is out to get us.But verify that. Check their background. Do a simple Google search. Listen, I'm working on a case right now. A lady got scammed out of several hundred thousand dollars.This is a big deal. And when she approached me about it, I said, did you ever think. And I wasn't being judgmental, I wasn't criticizing her.I said, did you do a Google search? And she goes, no, Raf, I never thought about that. And I said, give me the person's name that scammed you.I put it into Google and within two seconds, a list of scams. It was right there in black and white. All she would have had to done is Google search this.Now, I'm not saying Google is the answer because there are some sophisticated scams that are going to be on Google. Let's start there. But when you have those doubts, when. And listen, this is the Lord speaking to you.When you have those doubts, you start thinking something doesn't. My grandfather used to say, it doesn't pass the sniff test. If it doesn't pass the sniff test, stop what you're doing. Here's another thing you can do.Be a prayer warrior. We can all do this. This is simple. When you see something that seems too good to be true, just say right then, God. This sounds really good.God, what should I do with this? Is this really as good as it seems? Lord, ask for guidance. Reach out to experts. Let's get right into the word of God today.Let's look right at the book of Proverbs 14:15. I mentioned this earlier. It's kind of harsh, but it's true. The simple believe anything but to prudent give thought to their steps.What is scripture telling us if You're a simpleton.I know that sounds mean, it sounds judgmental, but you believe anything like a little kid, you tell a little kid anything, they're going, oh, yeah, that's true. I believe it. My mom, I'll tell you a funny story. My mom once time said to me, I had these sneakers. I really want to get these tennis shoes.I thought these were cool. And I was hounding. And she goes, okay, son, you know what? You can have those the second Tuesday and next week.And as a little kid, I thought, oh, cool, there's two Tuesdays next week. Obviously there's not two Tuesdays next week, but that's being simple, right? But prudent people, they give thought to their steps.So the key today is be prudent, be measured, study, ask for documentation. And here's a little bonus verse for today. Ephesians, chapter 5, verse 15. And this is for believers.I really believe this is like leaning into our position as a believer. Be very careful then how you live. Not as unwise, but as wise. And this is fundamental. We have to live as wise. It's easy to live unwise.It's easy to live with. Believe in everything you hear. It's so fundamental to be wise. Let's pray for some wisdom together right now.Lord, we just thank you for the ability to have discernment. It's a gift, Lord, that so many of us take for granted.And, Lord, we're surrounded by wise advisors, and we just ask that you would help us to recognize the deception when we see it, Lord. Give us the courage to say no.Give us the courage to stand strong when we feel pressured, Lord, and help us to not be living in that intimidation, in that fear, Lord, and we just thank you for wisdom, Lord. We thank you for protection in our financial decisions, Lord, and we ask this in the mighty power of Jesus. Amen.So here's my one action step for today. Before you buy any investment, if you hear the words, this is too good to be true. Guess what? My grandfather was right. It's too good to be true.Let it go. Let it go, Louis, as they say. But ask some questions. Is this a registered investment? Ask yourself in your heart, is this too good to be true?And if you've got any questions, if you're unsure at all, pause, put the big pause up. Get some advice, because we're all called to help each other out. Save yourself before it's too late.Because unfortunately, I've dealt with so many fraud cases where it was too late. That person was intimidated. They were Rushed, they were feared and they lost it all.And the truth is, scams feed on our, on our natural inclination to be greedy. And we're going to be honest with ourselves as fleshly people. We're greedy people and we're fearful people. We don't have to live like that.Look for those red flags. If you hear the word guaranteed or you hear some kind of urgency or unregistered sellers, run the other direction. Know the flags. Practice prudence.Practice prayer. You got to protect your financial future. Remember, God gives us wisdom to walk in safety. You don't have to live in fear, but you do need to be wise.So that's my takeaway for day. Be wise. And tomorrow we're going to talk about the importance of investing regularly.We're going to talk about something a little bit in the weeds tomorrow. Specifically dollar cost averaging. Don't lose sight of that. It's very important and it'll make sense tomorrow. So I encourage you to join me tomorrow.Now, one of the things I want to tell you right now is if you've got a question for the show, we've done some great questions the last couple of weeks. If you've got a question for the show, listen, I love answering questions. This is what I do. I'm, I feed on this.As you can tell, I'm excited about this. This question today made me excited. Well, if you've got a question, I set up a website just for that.You can go to justaskralph.com, put your name, your email address and put your question there. Because helping others, that's my mission field. A lot of people say, ralph, what's your mission?My wishing is to help people and answer your question. So if you've got a question, go to justaskRalph.com and your question could be put on the show.Listen, if you don't want to use your name, I'm cool with that. Just say, ralph, I just got an anonymous question. Send it in to me. Don't live in fear. Be prudent, Be patient. Be wise. Remember, God is there for you.God is there to guide you in all things. You just have to reach out and ask him. So I want to encourage you today, stay financially savvy.Be that financially confident Christian that I know you can be. God bless you and you have a great day today.