|
If it sounds too good to be true, then it probably is
Monday, 7 May 2007
We all want to believe in easy answers. The idea that there's some secret door nearby though which we can walk through and solve all our problems is a seductive one. Nowhere is this more dangerous than in the game of money.
Let's face it, dealing with our financial situation is a drag. You have to work forty hours or more a week just to keep a roof over your head and food on the table. The bills never stop coming in - tax, phone, credit card, utilities. And then, of course, there's all those wonderful new consumer goods pulling on your mind and your wallet.
If you said to people: "What can I do to make you more happy?", many would answer: "Give me more money".
So the promise of easy money is always a seductive one. If you think that all you have to do is something clever, without a lot of work being involved, and the cash will come flowing in - well what could be cooler than that?
Unfortunately, there's a large number of people out there who know this basic human weakness for easy money, and aim to take advantage of it. They promise big rewards with little risk. They put advertisements in the newspaper, infomercials on TV, or even recruit people at the local bar.
"We know the secret of making lots of money fast with no risk," they claim. "All you have to do is trust us".
Some are sleazy and obvious con-men. Others dress themselves up as stable and conservative financial institutions. But whatever image they try to project, the message is always the same - fast money, low risk.
If you hear someone making such claims, no matter how reputable or smart they appear, alarm bells should immediately go off in your head. Despite the hopes of many people, risk and reward are strongly connected in any type of investment. The higher the reward, the higher the risk. This law holds true whether you're talking about bonds, shares, property, or one of the more exotic financial products.
High reward with low risk is simply too good to be true. And if that's how it sounds, then that's probably how it is.
Even if you find yourself being convinced by the easy, riskless money one of these hucksters is promising, ask yourself one simple question. If this person was really smart enough to find a way of making tons of money with little risk, what does he need me for? Why sell me his financial product when he could simply use his system to enrich himself and not tell anyone about it?
If it sounds to good to be true, then it probably is. If you're going to invest, do it conservatively. Don't believe the stories of easy riches, or you'll find yourself soon separated from your hard-won money.
 | For proof of your own potential genius, just look around you | | What is the difference between you and a person struggling to scratch out a living from nature 50,000 years ago? Biologically, nothing. You are essentially identical. You just got lucky in the draw of history and were born into the modern world. But how this modern world was built must be the greatest story ever told. There we were a few thousand generations back, dropped naked in the dust. And he we are now, flying into space, building the internet and destroying deadly microbes. |  | Too much self-belief can be expensive | | We are often told about how important self-belief is. We're told to be optimistic, think positive and view ourselves as born special and unique. This is all well and good, but at times it can also be damaging. Too much self-belief can actually limit your potential. | | Take lots of small losses for some big wins | | Poker strategy contains many good lessons about dealing with the world. The best of all is that you have to be willing to take lots of small losses in order to hunt out a few big gains. |  | Taking charge of your eating habits | | Many people have trouble controlling their eating habits. You can see it in the rapidly expanding waistlines of the world's population. But what we decide to take into our bodies is something we can take charge of. |  | The world is an amazing place | | "Man is born free, yet everywhere he lies in chains," Voltaire said. He could just as easily have been talking about internal chains as external ones. | | Shaping the behavior of others | | We all have people in our lives who we wish would behave differently. It may be the person who cuts us off when we're driving, or the work-mate who's abusive, or the child who's too rebellious. What can we do to make these people act in the way we want them to? |  | 101 suggestions for squeezing more fun out of life | | Life can sometimes seem like a real drag. The work, worry, stress, chores and general boredom can really get you down. Going to the gym, watching TV and surfing the web are all okay, but often when it comes to having real fun they just don't cut it. | | Become expert at identifying your own weaknesses | | We live in a society that promotes the cult of self-esteem. Anything goes as long as we feel great about ourselves, or so we're led to think. Believing we may have flaws is a big no-no and certain to have a negative impact on our success. |  | The best way to influence the behavior of others | | We are all dependent on one another. We need other people and they need us in order to live the best lives we can. But other people are generally outside of our control. So one of the biggest problem anyone faces is how to get others to behave in the way we want them to. | | Is it better to read fiction or non-fiction? | | One of the most popular articles I’ve written on this site so far has been Five excellent mind habits to develop. It’s been generally well received, but I have come in for some criticism for my belief that it’s a better mind habit to read non-fiction than fiction. |
New articles are being added all the time, so make sure you bookmark Paul's Tips and come back.
|
|