Question

Respond to the following:

You have been offered the opportunity to get in on a once-in-a-lifetime investment. The returns will be very high, and your money is safe. Why is this not possible and most likely a scam? (Include References, if possible)

Answer 1

The opportunity to get in on a once-in-a-lifetime investment and receiving very high returns is not possible and most likely a scam because the most trusted and secured investments never provides higher returns. There is a common myth which we all know that higher returns are only offered where higher risks are involved.

While making any investments it is always been suggested to read and verify the papers or related documents very carefully. It is a common practice to see that whether the said investment schemes are approved by the central bank of that country and/or approved by the SEC(U.S. Securities and Exchange Commission) in case of US.

If anyone wants to be in a safe side of his/her investments, it is always been suggested to make investments in Government securities like Treasury Bills backed by the guarantee of the Federal Government of a nation or Risk-free Government bonds that offers less returns compared to other investments schemes but it is indeed risk-free.

Also, the higher rated investment that has been rated by the rating agencies offers comparatively lower interests than the low rated investments schemes. Considering a recent short example, one has to read the recent story of Franklin Templeton winding up its 6 Debt Mutual Fund Schemes amid the COVID-19 crisis (source: https://www.etmoney.com/blog/franklin-templeton-mutual-fund-winds-up-6-debt-schemes-here-is-everything-about-it/).

So, it can be well understood by now that higher risk takers will always be in risk of losing their precious money due to the risk of defaults by the investments schemes. So, its always been suggested to go for secured investments.