As an investor, you would certainly like to invest and increase your money.
But is the decision to invest your money so easy and simple.
Is investing your money as simple as depositing your money in the bank?
Definitely there is more to investing money.
In fact investing your money is a challenging task and should be done cautiously.
I will let you know why I say this to you.
Well there are various investment options but the key point for you is to determine and follow the criteria(s) for selecting a right kind of investing opportunity for yourself. Every investment option or scheme cannot be the right choice for you. In this context, high return investment schemes are potentially risky source of investment, and there is no assurance or guarantee that the actual yield would match with their expected yield.
So if, you are not willing to shoulder high risk of investment than the only viable solution for you is to play safe and Beware of High Return Investment Schemes rather than participating in these sorts of investing options.
In the ongoing post, we have come up with and highlight the disadvantages associated with high return promising schemes. Also, I have illustrated the ways of minimizing the risks associated with High Return Investment Schemes. Moreover, you come to know how you can ascertain that a particular high return investment scheme is safe for you or not from an investment point of view.
Before moving further, it is beneficial to clarify what constitutes high return investment schemes.
Primarily when we talk about high return investment schemes, we refer to fixed deposits or bonds issued by private companies, unsubstantiated guarantees, offshore investment opportunities which offer investment opportunities with the promise for huge profits.
These schemes entice the investors to invest a huge amount of money, promising them with high profits in return. Such companies or schemes support their investment opportunities with a guarantee of high returns. For example, they may promise returns as high as 15%.
In such scenarios, most of the time such investment schemes never delivered their promised returns. On the contrary, people end up losing all of their invested money.
You must understand that when you are being offered more than the going rate then the chances are high that you can lose your money. Such investments demand a thorough analysis and research before actually investing in such a company or investment opportunity.
The point made is that you must evaluate such investment opportunities before actually investing your money.
Let me put before you the underlying principle of investment so that it becomes clear to you. It is short and simple. The higher the promised return on an investment scheme, the greater is the underlying risk of investment.
In this context, you may feel that a guarantee may lower the risk of investment, but the truth is that a guarantee does not reduce the risk of investment in any way. What purpose a guarantee can fulfill if the company or the person making the guarantee is not in existence. So lot depends on the company or the person making the guarantee. You should understand that nobody would like to pay 15% of interest if one is able to borrow money at 8% from a bank (taken as an example). That means that their credit rating is not good, and when a company makes a guarantee it in no way reduces the risk of investment.
So what you can do to protect your invested money.
Well as a first resort you need to check out the high return investment schemes in which you want to invest. You can check the credit rating of the company and even find out if the company is registered with the Government or not. You can undergo a thorough analysis and research and can come out to a conclusion whether it would be a safe proposition to invest or not.
And, if you do not have the time or are not well versed at research and analysis, what you can do is to hire the services of a well qualified and trusted professional such as accountant, lawyer or financial advisor and let them evaluate the investment opportunity. You can then take the final decision to invest or leave the high return investment scheme.
So you see that you need to Beware of High Return Investment Schemes and should make a point not to make your investment decision in haste just believing that a particular investment opportunity is good. You need to make a thorough analysis and invest your time in research prior to investing in such high return investment schemes. After all, it is your money and so you have to take adequate measures to protect and grow your money for a stable financial future.