Watch your wallet

Has someone made you an investment offer that sounds too good—and lucrative—to be true? Then it probably is. Financial advisor rating firm Paladin Research & Registry has compiled a list of the 10 most common and potentially destructive investment scams out there. From the always suspect pyramid scheme to potentially shady annuity sales, here’s a look at where you should avoid putting your money—at all costs.

Ponzi/pyramid schemes

“Ponzi schemes have stolen more money than any other type of scam. That’s because of early investors, who are paid with the assets of later investors, believe they have a great investment, so they tell friends, family, and associates. This phenomenon creates a lot of new investors who provide the assets scam operators need to meet the withdrawal requests of early investors. Ponzi schemes can perpetuate themselves for decades as long as there are no excessive demands for distributions.”

Investment seminars

“Investment Seminars may also be scams because the only people making money are those who are presenting the seminars. Most seminars promote ‘get rich quick’ schemes, which rarely work for the masses. To get rich you need a great idea, a great strategy, adequate working capital and disciplined execution of the strategy. Common sense says [that] if the idea was that great, they would not be sharing it with you.”


“Annuities can be an investment scam when financial advisors replace your current annuities with inferior products so they can generate a new round of commissions from your assets.”