If there were only a pot of gold at the end of the rainbow. We know it's not true, not even possible, but even as adults we wish for it. We dream of some easy way to make a lot of money without working for it. There has to be some shortcut to wealth without working for decades and seeing the retirement account balance slowly go up or down, and sometimes more down than up. There just has to be some easier, quicker way to leapfrog the normal slow process. The lottery is the epitome of this "quick easy money" illusion.
But it's safe to say that we all are drawn to this idea, even though we know logically it's probably not true. So in spite of the emotional pull, how do we stop being drawn to these "too good to be true" investments?
One, watch out for promises of quick profits. Advertisers and anyone selling investment products know which buttons to push, so you have to be prepared in advance. Be on the alert for returns consistently higher than the market, aggressive marketing, opaque business models.
Two, beware of exclusivity. One of the best investments you can buy is an all-market index fund, and it's open to anyone. It's no secret. But anyone pushing an investment product such as these may use wording like "limited time" or "select few" investors will be allowed in this deal.
Three, avoid any business you can't understand. Do you really think you can outthink a computer buying and selling stock options or futures contracts? Maybe some of you reading this can do it, but most can't and shouldn't try.
So like a lot of things in life, it comes down to the basic concept of this: if it were that easy, someone would already have done it. Are there buying opportunities? Yes. Are there some investments that return better than others? Yes. But apply the same skepticism you would in other areas of life. If it were that easy, why would the person selling the idea be sharing the "secret" for $19.99?
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