Before You Say I Do
When investing our hard-earned money, this is just like getting married to the person we love.
WHEN a man and a woman tie the knot, they are entering into a lifetime contract that only death can cancel.
This means that when they get married, there is no point in turning back. Assuming everything is fine (there is no deception), then the contract is not voidable. After exchanging “I do” to each other, married people cannot just say undo and become single again. That is why a person in a relationship has to think deeply before he decides to sign the contract. Otherwise, he will be having the last “ring” (after engagement and wedding ring) which is lifetime suffering. I have heard of this story from a friend who said that at his wedding day, he got cold feet. But since he cannot back out anymore, he went on and married his longtime girlfriend. The problem is that since day one he wanted out and up to now remains trapped by the decision he made 18 years ago.
Before the computer age, the best we had was having our thoughts printed with a typewriter. Whenever we type the wrong letter, we have to erase or apply correction fluid and retype the correct letter. With the advent of the microcomputers in the 1980s, we can do the same but if there was an error, we can just press undo or backspace. Such is the power of technology.
When investing our hard-earned money, this is just like getting married to the person we love. We have to think several times and evaluate if we are, indeed, making the correct decision and taking the lowest risk. Just like in marrying a person, you won’t know the real person until you live under one roof. Reality then begins to set in. Whatever you discover later in life, you will be stuck forever with your choice whether it is a reward or regret. When we invest, we need to study the offer, the risk involved, how long you want your money to be married to the investment company. Legitimate investment companies allow you to undo your decision but the value of the money you will get is not guaranteed. But the good thing is that it is guaranteed that you can redeem anytime you wish to.
When it comes to illegitimate investments, a lot of people commit the mistake of not thinking beforehand. Just like getting married, they base their decisions on their emotion. A lot of unsuspecting people fall prey to scams because of greed and ignorance. They do not know the principle governing the growth of money and always want a short cut. Greed begets more greed. The more their money earns, the more they put more money into the system. So blind have they become they want to be married to their so-called investment. Their behaviour is very similar to a person who is head-over-heels in love. They become blind and deaf to what the more discerning people are saying. They do not want to undo their decision because they are still in cloud nine over the guaranteed high return. They do not know that when the scammer talks about any guarantee, it is the guarantee that he will get all the money of the gullible public. When the scammer reaches his desired amount, then he will just leave the system and run away with all their money. Scammed investors will then cry over spilled milk and regret having put their life savings in a fraudulent scheme. It is too late for them to undo because they have no one to get their money back from. This is just like regretting having married the wrong person.
Below are some helpful tips.
Investigate before parting away with your money. Even if you trust the person who made the offer, chances are high he might not know that he is also scammed. You can check the background of the company and its track record from various government agencies.
Ask the person on how the offer works. If he cannot explain how your money grows, then it is highly probable that the offer is not legitimate.
If you are being rushed to make a quick decision, it pays to get calm. Never let excitement get the better of you. A lot of people invest due to excitement when, in fact, investment has a lot to do with logic. Always put your mind over your emotion.
Be in the company of reputable people. Use the power of social media to get information. You can even ask questions from advocates who will be glad to help you. But make sure to check his background and expertise before you communicate with him.
Keep in mind that legitimate investments do not offer a very high return. Businesses usually have a margin of 30 percent to 40 percent, so it is impossible for an investment to give you 500 percent within a year.
Saying undo is a lot before saying “I do” especially if you are having second thoughts. It is better to be safe than sorry. Whether getting married or investing your hard money, it pays to think ten times before making a life-changing decision.
Edmund Lao is a Registered Financial Planner of RFP Philippines. A sales engineer by profession, he is an advocate of financial planning.
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