Scammers operate at all hours of the day; they don't take vacations. Because of this, you always need to be skeptical of who assists you and your investment strategy. Also, be sure to secure your personal and financial information.

There are five necessary things you can do to make sure the broker, advisor, firm, etc. that you are working with is legit. Though they are essential, these guidelines are often overlooked.

The desire for jumping in too early, in part, led to individuals losing $16 billion through scams, fraud, and identity theft in 2016.

The first item on the checklist is to "think first." 

Does the investment sound like a once-in-a-lifetime opportunity that is too good to be true? If so, it most likely is. More steps need to be taken before investing your hard-earned money.

The other four items are as follows.

  • Research: Many scammers are not accredited. Do a personal deep dive, while also checking regulatory agencies for accreditation, including:
    • State securities regulators
    • FINRA (Financial Industry Regulatory Authority)
    • SEC (Securities and Exchange Commission)
  • Ask specific questions: If you have connections in the industry, ask them about the firm or individual that has been providing the opportunities. Also, pepper the in-question firm with any and all questions about investments, risks, and concerns. Be detailed and try to fool them, and then research their answers. Scammers will often try to push a "guaranteed return." Qualified investments are historically up and down. Riding the wave is a part of the experience. Be wary of any "guarantee."
  • Talk with the firm about withdrawals: Legitimate firms have clear terms when it comes to withdrawing your initial investment or any profit you may accrue. Once again, ask detailed questions about fees, restrictions, and time-frames.

Lastly, be patient. Everyone should invest in their future. Still, good and great investment opportunities don't surface too often, especially those that expect you to hand over your funds for an "immediate" or "guaranteed" return.

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