Keep Your Money Safe

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Swindle, scam, steal. Deceive, defraud, dupe. No matter the term used to describe a con, the results are the same: a thief has tricked someone and taken their money. You only have to read the newspapers to know how often it happens.

So how can you protect your hard-earned cash? Asking questions is a good start. Here are three to think about before you turn your money over to anyone.

Is it too good to be true? When banks, mutual funds and the US Treasury offer interest rates of less than two percent, be wary of investments that promise returns of 15% or more. Scams that fall into this category include payphone leasing, Ponzi schemes and prime bank schemes, where victims are promised access to the investing secrets of the rich.

Is the person selling the investment licensed? Legitimate stockbrokers and investment advisors are regulated by state authorities. Watch out for information gleaned from Internet chat rooms, so-called investment seminars and “affinity group fraud”, which can happen when you trust someone merely because they belong to a group you’re affiliated with.

Do I understand the risks? How much money you can make is only one part of the equation. Equally important is knowing how much you can lose. For example, callable Certificates of Deposit can be redeemed by the bank—not you—prior to maturity. Early redemption may mean you lose part of your original investment.

Question, question, question. Ask, ask, ask. And keep your money safe, safe, safe.

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