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Will you reject a business proposal that makes you 30 per cent return?


Here I have, the deal-of-a-lifetime with me that could make anyone richer without taking much of a risk. And I am generously offering that opportunity to invest to you.

Park with me a sum of your money and let’s get rich together after I roll the money into the property market and bring you a “guaranteed” return. Blending my smooth talking skills with your strong desire to attain financial success and crazy guaranteed return of 30 per cent and I’m pretty sure you are tempted to part with your money and invest with me.

If that is not sufficient, let me wow you with professional advices from successful bankers and other professionals in the industry. If that is not enough still, maybe my new ride, a BMW 7 series sedan, will be enough to gain all your trust to take up the deal.

The recently exposed “ ponzi scam” have seen investors parting with millions of dollars. Cases like this are not the first, and neither will they be the last. So how can you or the people you know, avoid putting your money into such “businesses”?

If something is too good to be true, it probably is

They promise you really high returns, beating most available investment instruments available in the market. High returns usually come from the undertaking of high-risk activities. Most of us know that, but the inner greed leads us to irrational decisions.

If something is too good to be true, it probably is. Anyone who promises you a high return without risk is definitely lying. You should never trust such a person, ever.

Professional presentations

These business plans are usually presented at expensive or classy venues, be it in a ballroom at a 5-star hotel or a well-furnished office. Every aspect of the presentation is supposed to be convincing and legitimate. If discussion is over at a restaurant, they will pay for your meal.

Being overwhelmed by the effort and sincerity put in for their presentation might contribute to your decision. The possibility that you might lose out on potentially making a lot of money if you do not invest in the deal will also be used as a tactic to scare you into investing.

People are getting back their promised returns

Skeptical investors might hold on to their cash until they are convinced that the investment is safe and that they will be able to withdraw their money if they want to. In these cases, the salesman may introduce to them other people who have bought in to their investment, and who are happy making money out from it.

Exploiting familiar grounds in their business ideas

Singaporeans are no strangers to lucrative property deals, where stories of people becoming overnight success are known and shared. Frequently, business ideas being pitched forward are aligned with what is hot in the market. For example, if gold prices are soaring, you will see gold related business proposal, if Myanmar is hot, you will hear about business proposal on investing in the market, if the purchase of properties overseas are the in thing, you will hear about business ideas being proposed that promises high returns.

However, we must always remember that owning a land in another country may not be the same as buying one in Singapore. The differences in demographics and government policies affects the prices of properties in these areas and these have to be accounted for. Investors should also be cautious about putting their money into projects where the developer has very little history of past projects.

Now back to the question, “Will you reject a business proposal that makes you 30 per cent return?” We think that you should reconsider that carefully.

 

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