Remember 2008? Most of us do. It was a painful time when our home values decreased, our 401k balances were decimated and our job security was low to non-existent. It was enough to shake anyone’s confidence in the banking system and you could be forgiven for having stashed any cash you had left under your mattress.
Things were starting to feel better, but now, news out of Greece with images of closed banks and ATMs running out of money might be causing you some anxiety again. It certainly doesn’t help that some corners of the media and self-interested financial “experts” with a book to sell are fanning the flames with new prophecies of financial Armageddon.
While we have no idea if the economy will improve or decline, we do know there are a lot of bad actors out there ready to capitalize on your financial anxiety. Before you cash out your 401k, withdraw your life savings and seek alternative places to put your money, review these common pitfalls and remember to keep some perspective when it comes to your finances.
Financial Areas Where Cons Proliferate:
Unqualified Financial “Gurus” – Many untrained and unqualified financial “gurus” have written books or appear on infomercials, typically capitalizing on the uneducated and their fear. Additionally, the SEC recently reported even many qualified advisors lie about their experience.
Gold Resale Operations – You seem them advertise everywhere. While buying gold in and of itself is not necessarily a bad idea, the field is full of scam artists. Common gold resale scams include fly-by-night mail order operations that insist on payment by mailed check, exorbitant add-on fees and counterfeit gold coins, according to Investopedia.
Bitcoin Transactions – Like gold, bitcoin has good potential use cases, but also like the yellow metal attracts its share of thieves. Before “investing” in this digital currency keep in mind some of its biggest exchanges, such as Mt. Gox and MyCoin both mysteriously shut down, with hundreds of millions of dollars of investors’ money unaccounted for. Additionally, as bitcoin thrives on anonymity, verifying whom you are transacting with can often be next to impossible.
While financial news headlines can be scary, the alternatives can be worse. Use your judgment when making important financial decisions, seek the advice of a qualified financial planner if you feel you need one, and above all, always verify whom you’re conducting transactions with before you part with your money.