How to Avoid Bad Financial Advice and Costly Scams

Updated: Aug 29, 2019

“The children of Lucifer are often beautiful—And as we know, they flourish like the green bay tree.”[i] Spoken by Miss Jane Marple in Agatha Christie’s 1965 novel At Bertram’s Hotel

Financial advice can be very, very good. But when it’s bad, it’s horrid. When you get bad advice, you lose your dollars…and your pride. The very people you trust with your life savings steal your money with a smile.

In the town where I practice, a financial advisor moved in, made friends, held swanky events, visited the sick, gave to the poor, established an investment fund, and founded a school…until he was arrested for swindling those “friends.” At his trial, the advisor said he was sorry: “I did love them dearly. My clients were my life. ... I just hope they don’t lose trust in people.” Although my heart goes out to those who lost money because of that advisor, as Paul writes to the Corinthians, “I am not surprised! Even Satan disguises himself as an angel of light.”[ii]

How can you protect yourself from being swindled?

Here are some tips that can help.

Too Good to Be True

If something seems too good to be true, it probably is, especially when it comes to financial return on investment. Although a few people may have the luck to score a windfall, most investors make about the same amount from their money based on the risk level of the investment vehicle they choose. Basically, the safer the investment, the less money you will make. U.S. government bonds are almost risk free, and that’s why you only make about 1% when you invest in them. A corporate bond or biotech stock might give you a 50% return – or the company might go out of business and you would earn no return AND lose the entire amount of principal you invested.

Forbes financi