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Financial Scam and The Simple Con


Mr Tan Kin Lian shared on his blog about victims who have approached him for help with regards to being cheated by con artist.

The victims are afraid of telling their loved ones as money is involved and suffer in silence as their spouse may not be forgiving that they have lost hard earned money.

He asked that the authorities take action on these scammers who will change their guise and companies/products but use the same method to prey on the those who are gullible.

While we think that we live in the information age and that these types of scams and con artists should not be able to survive, the fact is that some of these scammers are highly intelligent and they find different ways to appeal to your greed.

Naming the companies or them may stop the scams for a while, but the better solution is heavier punitive action on those whose product is out to cheat and those schemes that are outright scams. Education of people in financial literacy and basic common sense for financial products can help too.

Bernie Madoff operated his scam lasting decades and lost more money that most people can earn in their life time x 100. the estimated size of fraud is $64.8 billion. He was put to jail for 150 years when his scheme was exposed as the financial markets tottered on the brink of an abyss.

What are the signs that it is a fraud?

1. Promise of a high return with low risk. Anyone promising sky high returns and low risk to you and asking for your investment is likely to be a fraud. The best investor in the world may get 15-18% per annum over more than 30 years, but anyone who promise more than 10% returns is likely to be a scam artist.

2. The method is a trade secret. You can make 10% guaranteed, but if I tell you how it is made, it is either too complex for you to understand or it’s a trade secret, if I tell you, I’d have to shoot you.

3. It’s too good to be true. If it sounds wonderful, it is probably too good to be true. True investment is a roller coaster ride, there are ups and downs. So if it is guaranteed, secret and everyone is investing in it, steer clear.

4. There is no external audit or custodian of your assets. If the product is not audited, and the assets/product that you get does not have an external, independent and preferably large financial institution as a custodian, run far far away.


The best way to invest is directly in the stock market.

Buy the whole market if you can which you could actually by buying the index like the ETFs for Straits Times or S&P500 and the only thing to look for is low cost.

The logic behind the market is out there everyday when the companies are making products, doing a service and earning profits or if they don’t do well, losses.

They are audited (which sometimes, doesn’t prove anything if you look at Enron and Lehman Brothers), your assets are in custody (shares parked at CDP even though you buy with a securities firm) and you know how the company is doing through its annual reports.

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The information contained in this blog is prepared from data believed to be correct and reliable at the time of publication of this report. The authors do not make any guarantee or representation as to the adequacy, accuracy, completeness, reliability of the information contained herein. Neither the authors or any affiliates or related persons shall be liable for any consequences (direct or indirect losses, loss of profits and damages) of any
reliance placed on information provided in the blog.

Shares and financial instruments illustrated in this blog can go down sharply or in certain instruments suffer total loss on the initial investments. Investors are advised to make their own judgment on the information provided and consult their own financial advisors or consultants as to the suitability of the products illustrated to their particular financial needs and objectives before acting on any information contained herein in this blog.