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Warning Signs of a Bad Investment

By on April 8, 2015
bad investment

bad investment

Warning Signs of a Bad Investment

Investing can be scary with the huge risks, self-interested parties and the initial investment. How do you know if you are making a bad investment? Here are the top warning signs that your investment may go sour.

 

Too Good to Be True

If an investment comes across your table and it looks like a screaming winner, you probably need more information. Every investment is going to come with strings attached and potentially fatal risks. You’re better off figuring out what those strings are before you start handing over cash.

 

Check the Sellers Credentials

Most established and long term investors have a history that speaks for itself. If your seller is new to the game and doesn’t have the experience to back the investment, consider looking for a new seller. Or at the very least, figuring out what collateral the seller is willing to offer.

 

There is no such thing as “No-Risk.” Period.

Anyone that says otherwise is nothing more than a conman in a suit. While a “no-risk” investment sounds ideal, its quite the opposite. Figure out the risks, know them like the back of your hand and be prepared to deal with them before investing.

 

Check Your Advisor’s Share

If your advisor or seller isn’t investing, you shouldn’t either. Feel free to ask “How much of your money is going into this project?” Any advisor or seller willing to invest their own money has more clout. Plus, you don’t want to be the only one capitalizing on this great deal, do you?