Member-only story
A Ponzi scheme is a fraudulent investment operation that pays returns to older investors using money contributed by the newer ones. The operator of this type of scam typically lures new investors through exaggerated promises, false statements, or even fake collateral — claims that the conman already has investments to fund future returns when in actuality he doesn’t.
Just because there are so many Ponzi schemes out there doesn’t mean you can’t avoid them — in fact, with these handy tips you’ll be well on your way! You might even have some fun along the way.
1. Use a Better Brokerage Account:
If you’ve already opened an account with a discount brokerage firm such as Scottrade, Fidelity or E-Trade, choosing a company like Charles Schwab for your investment firm might make more sense. These firms typically use more of their own money to make investments. Also, they don’t require you to put down as much of your own cash up front and will charge lower commissions for online trades. And remember, the sooner you begin investing, the better.
2. Beware of Psychologically Manipulative Exhibits:
If someone tries to influence your decision making by using exhibits such as pricing claims, charts…
