Easy money might sound appealing, but there’s typically a catch. For most people, there’s no shortcut — building wealth is a process that takes time and effort.
Unfortunately, some people learn that lesson the hard way. Here are two common “get rich quick” schemes that didn’t pay off.
Nurp Trading Software
“A couple [of] years ago, a family member asked me to look at Nurp trading software, which a friend of theirs was considering purchasing,” said Matthew Gagnon, CFA and founder of Financial Empowerment. “The cost was $18,000 upfront, plus $300 per month.”
Paying that price gave investors access to algorithmic trading strategies that supposedly generated 130% returns in one year by trading forex, crypto and commodities, he said.
“You basically connect your brokerage account to their software, and it recommends trades that the investor executes,” Gagnon said. “They made a point to say the product could work even for people with little or no trading experience.”
After conducting due diligence, Gagnon found that neither the company nor its founder was registered with the SEC or FINRA. He also reviewed the company’s online content and participated in a sales call with a representative.
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“There were several red flags — the biggest one being they were secretive about how they were able to achieve such high returns,” he said. “They couldn’t explain their edge or what market efficiency they looked to exploit.”
The final strike was the evasive and impatient behavior of the representative during the sales call.
“After the third question I asked, the representative became rude and cut me off,” he said. “If companies are asking for $20,000 of your money, they ought to be able to field questions and talk to you for more than 15 minutes.”
Ultimately, he advised his family member against investing in the firm. This person followed his guidance, but a friend of theirs did not.
“Over three months, he had lost his entire $30,000 investment,” he said. “An expensive lesson.”
Anything but easy money, he said, investors need to understand that short-term trading strategies put them up against the best in the world, including hedge funds and other large financial institutions.
Instead of encouraging clients to trade, he said it’s best to build wealth by investing.
Coaching Certifications
Becoming a certified coach might sound lucrative, but Don Markland, co-CEO of Noomii.com, a coaching marketplace, warned against it.
“One of the great grifts alive today is the get-rich scheme of ‘coaching certifications,'” he said.
Markland said several companies sell “desperate people a ‘certification’ for $5,000 to $20,000 that promises they will be their own CEO and live the dream life of an entrepreneur, only to discover the certification does very little for them.”
If you’re considering becoming a certified coach, he said, it may be worth thinking twice. Reaching out to successful coaches in your field of interest can provide a clearer picture of how they actually built their careers.
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This article originally appeared on GOBankingRates.com: 2 ‘Get Rich Quick’ Attempts That Went Very Wrong
