8 stupid ways to invest and lose it all

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

In some schemes novice investors do not need to climb, in others - no one.

1. Forex trading

Not all Forex companies are equally harmful; there are probably honest and decent ones among them. But if you decide to become an investor from scratch and do not understand the issue at all, then your chances of losing all your money tend to infinity. This is confirmed by statistics: in two years, Russians have lost 200 million rubles in Forex.

Plus, there are too many fraudsters operating in this area, which doubles the chances of bankruptcy.

How it works

The forex market is closer to a casino than a financial exchange. You bet money, for example, on the exchange rate and wait for your prediction to come true. If so, you win. If not, you lose.

But the forex company makes money on your failures, so it is in their best interest to leave you penniless. Some of them may even adjust courses so as not to drag out the process and make you lose faster.

Think of forex trading as a game of chance - in this case, there will be no surprises for you. And if you want to dispose of all your savings, it is better to look for something more conservative.

2. Investment companies with very high returns

High returns are always associated with high risks. In addition, this is one of the signs of a pyramid scheme.

How it works

Lifehacker has already written in detail about the pyramids. In short, the remuneration of old members in such companies is mainly paid from the money that new members of the organization contribute. As soon as their flow dries up, the pyramid will fall apart.

The top of the pyramid is likely to work, but this is inaccurate either. For example, you may be forbidden by agreement to withdraw money until a certain amount is reached. You will indeed "make" millions, but you will never see them, as the company will cease to exist.

So if you are promised that you will invest 100 rubles and the day after tomorrow you will receive 200, run faster, but in the opposite direction from the company.

3. PAMM accounts

This is the same Forex, only from the other side.

How it works

Your account is linked to the account of an experienced investor, and the money is transferred to him in trust. His bets are automatically duplicated from your account. Moreover, he plays with his own money, and from you he receives only a percentage for the winnings. And it seems that this is the main safety factor: will the investor lose his own money?

But the money is taken from the accounts in proportion. Let's say an investor bets 10% from his account, and that's $ 50. The same 10% is taken from your account, and this is already $ 500. If the investor wins, he will receive a good percentage from you. If he loses, well, it’s a small loss for him. He won't worry about your $ 500.

4. Cryptocurrency

Many regret that they did not buy Bitcoin when it was worth a penny, and did not sell it in December 2017 at a record price of $ 20,000. But even more regret are those who bought it for 18 thousand dollars, did not sell it on time and lost a lot of money.

How it works

Cryptocurrencies have made a lot of noise, and this is what drives their growth. While they are being bought, they become more expensive. As soon as interest falls, price follows. The cryptocurrency does not have any material reinforcement, so everything is tied only to the enthusiasm of the buyers. Accordingly, you cannot predict with certainty what will happen to the course.

5. ICO

Initial Coin Offering translates as “Initial Token Offering”. Added to the risks of cryptocurrency is the likelihood of fraud.

How it works

At the initial stage, you give the company money, and it gives you a token. The organization uses the funds raised to implement its project, and then transfers part of the profit to you.

At the same time, tokens can be bought and sold on the crypto exchange. Accordingly, the price for them will vary depending on the interest of buyers. If at one point many owners want to sell tokens, this will collapse the price several times. And they will definitely want it if the creators of the ICO run away with the collected money or create an indistinct project, which is not uncommon in this area.

6. Binary options

Another gambling game for the day with an almost guaranteed loss.

How it works

You place bets on the rise or fall of the price of a certain asset. There are two options: you can win or lose. It would seem that earnings depend on your luck. Unfortunately no.

The system is designed in such a way that the loss will always be greater than the gain. This means that if you win 50% of your bets, you will still be in the red. And even if you are extremely lucky, a binary options broker can simply cut profitability at any time under various pretexts - this is usually written in the terms and conditions.

7. Network marketing with signs of a pyramid scheme

Networked business is another common screen behind which fraudsters are hiding.

How it works

Network marketing can be viewed in many ways, but some companies operate legally and actually sell products. They also give bonuses for inviting new members, but they still get income from trading.

Here's what hints at the existence of a financial pyramid:

• Selling goods is not the main income of the company. It exists by collecting money from new members.
• The organization sells strange or useless items at an inflated price. Nobody needs them, selling them is not the main task of the company. And already from the first purchase of goods, you can guess what is what. With honest network marketing, you have a good product on hand at market value. As a last resort, if the company falls apart, you will use it yourself. The pyramid will leave you with a plastic snowball for 10 thousand rubles and picking strawberries for the price of a motor ship.
• The old participant receives the main motivational payments for bringing new ones, and not for sales.
• The goods may not be given to you at all. Then you will pick it up next month, or even in a year. Until then, build the network.

Accordingly, participation in the pyramid scheme will not end with anything good for your savings.

8. Muddy companies, especially with a mystical component

Let's be honest: if you are not using the word "energy" in the sense of "industry", then it is worth pumping rationality before investing.

How it works

Let's take a home mini-farm for growing worms, and not simple ones, but with Ki energy. This is supposedly the energy of life, which turns ordinary animals into extraordinary ones. Sounds exciting, right? And while they grow, they generate Ki in your apartment.

The bottom line is that for money you get (but do not buy, more on that below) an incubator for growing worms, and the organization undertakes to buy offspring from you. The price of the livestock is lower than buying the equipment, but you are tuned into several generations.

There are several nuances here, and they all lie in the license agreement. The main one is as follows: the company is registered in Belize, is ready to accept claims in accordance with the legislation of this country, to conduct proceedings on its territory and only in English.

Translated, this means that you will not achieve anything if you are deceived. And this will happen sooner or later.

Worms require a special diet, special humidity and other dances with a tambourine. Otherwise, there will be simply nothing to redeem. Under the contract, you simply rent the incubator, and it will cost you $ 75. You are ready to buy the first offspring in 31 days for $ 6, 5 or in 91 days for $ 24. The company should take the contents of the incubator from you, but it is not said how this happens: you may have to take the box to Belize.

Growing worms is indeed one of the business options. But, as a rule, these are good old individuals for fishing and feeding pets, which grow well in ordinary boxes. So leave mystical energies and manifestations for the "Battle of psychics".

What to remember for a novice investor

1. Don't invest in something you don't understand. If you don’t understand from the 115th time what the benefit is supposed to be, it’s probably not about you. It's just that there are scammers who are trying to confuse potential customers.
2. Very high profitability is a reason to be wary. Most likely, you are being deceived.
3. Don't invest more than you are willing to lose.
4. Don't confuse betting on stock prices with buying them. In the second case, you own securities, in the first, you simply gamble with an unpredictable ending.
5. If an organization looks and acts like a pyramid scheme, it probably is.
6. A muddy company registered in an offshore zone should not inspire confidence in you. If only because you will not be able to build your relations within the framework of the law of the Russian Federation and will be completely defenseless in legal terms.
7. Before you get involved in attractive schemes, read more about them. Sometimes, literally the first document right on the company's website will open your eyes to what is happening.
8. Start investing with simple and straightforward schemes.