Whether you want to admit it or not, we’d all love to make more money without a lot of work. That’s a problem, because chances are you’ll meet somebody in person or online that will promise you ways to do so with little investment of time or effort, sometimes overnight.
These “make money” scams are more common than you might think, and sometimes they can be hard to separate out from true opportunities where you might actually be able to make money from home or make a little extra in your spare time.
Here are a few tips to help you identify potential make-money scams and avoid being deceived.
Watch out for anything that claims you’ll make money overnight.
If any program tells you that you can start making thousands of dollars as soon as you sign-up for their service, and pay a small (or sometimes large!) membership fee, it’s probably too good to be true.
While some people truly are in the right place at the right time, most of the time it doesn’t work that way. Fortunes take years to accumulate, and they involve hard work and consistent saving. For example, you need to spend time building a website, attracting an audience, or hosting events if you sell products or services.
Consider the amount they’re asking for.
These make money fast-type opportunities might require a $300 or $500 deposit. This relatively large asking price is still small enough for many people to afford — often by borrowing — yet the amount is large enough to make the offer feel legitimate.
After all, can you really get all the money making secrets to be an instant millionaire for just $20? You’d know that’s not the case, so that’s why it’s common for “get rich quick” companies to have a minimum asking price above $100. Some sites might even charge $2,000 or more!
Be wary if the company has mainly poor reviews online, and check with the Better Business Bureau.
If you’re thinking of signing on with a company that promises to help you start your own business so you can work from home or that offers training that will prepare you for a future job that you can do in your spare time, be sure to check them out in detail first.
Take some time to see if the company is registered with the Better Business Bureau or a similar accreditation industry. Also, take the time to look for online reviews. If the company is legitimate, you should have no problem finding reviews from credible blogs and industry websites.
Things to be aware of when reading reviews:
If you’re reading a review on a blog or review site, keep in mind that reputable sites will be honest in their assessment, and will typically let you know that they will likely earn a commission if you sign up through their link.
Make sure to read a variety of online reviews, and try to get the opinions of actual customers and clients. Reading several different reviews allows you to look for consistency between reviewers. Look for personal testimonies and comments in forums too.
There’s always the chance that even a great company can have negative reviews or complaints, but there should be relatively few negatives compared to the number of positive reviews. Positive reviews should appear genuine, not filled with oddly-phrased English or extremely similar phrases that are repeated in multiple reviews.
If companies are rated in a star format, be cautious of companies who have a nearly-equal number of both 5-star AND 1-star reviews with very few star ratings in between, since that is a suspicious pattern. These “sniff tests” don’t guarantee you will prevent every scam, but, it will help you avoid many of them.
Steer clear of well-known scams and fake “opportunities”.
The following are very likely to be things you should avoid if you’re attempting to find a legitimate money-making opportunity:
Non-FDA Approved Supplements
One perennial “make money” scheme is the opportunity to sell non-FDA approved herbal supplements. If it hasn’t been approved by the FDA, don’t sell it. (Miracle weight-loss supplements are the most common scam for health supplements.)
Recent regulations have prohibited medical supplement companies from making guaranteed claims, because, in reality, results will vary with each individual. If the company website is claiming guaranteed results or making claims that seem too good to be true, avoid them. The business will probably close when enough prospective sellers quit trying to sell their products.
You might be invited to an investment seminar or receive an unsolicited call where a money manager claims they can get you returns way above the average market returns with unconventional investments with little or no risk to you. These “investment whizzes” claim to make this money by investing in commodities like gold and silver, artwork, or offshore investments that are hard for you track the performance.
If you are not familiar with the investment products they are talking about, don’t signup. You don’t have to say “Yes” immediately, and a credible salesperson will respect your request for more time to conduct your own research.
Remember, there is ALWAYS the risk of losing all of your money with any investment. If a salesperson is very aggressive, guarantees increasing returns, is offering unregistered trading products, or has contacted YOU out of the blue, that’s a red flag. Don’t get sucked in.
The two secrets to becoming a millionaire by investing are time and consistent contributions. It isn’t by investing in super risky products or putting your money with an investor at the end of a high-pressure investment seminar that requires you to signup before he leaves town.
There are two main types of pyramid schemes:
- Schemes where you invest money, and then are paid “returns” that are really just made up of money people who came after you have invested.
- And schemes where you pay a fee to join a company and then primarily make money either by recruiting additional new members or by selling products or services to others who are also selling those same products or services.
It’s not uncommon for pyramid schemes to claim that you can quickly replaceable your full-time income, easily bring in plenty of extra money by working just a few minutes a day, or invest with no risk and great returns. None of that is the case in a legitimate money-making opportunity, especially ones that do have the long-term potential to replace your day job.
One special note: a pyramid scheme often takes the guise of a multi-level marketing company, so how do you tell legitimate MLMs apart from pyramid schemes? A legitimate MLM company will emphasize selling goods or services to your customers. Training that’s offered will primarily focus on ways to help you understand and sell their products for the long haul, not mainly on ways to recruit others to join the company.
A few signs that a supposed-MLM company may be a scam are that the company requires you to:
- Buy way more inventory than you could possibly sell
- Pay large up-front fees
- Pay recurring membership fees to get access to additional training
- Recruit a certain number or percentage of new salesforce members
Those types of tactics help ensure a profit for the company even if you do not recruit any new members to also sell.
Work from Home Scams
Thanks to the Internet, many people can now work from home and escape the traditional employment model. (I do, for example.) While they no longer have to commute, many home-based business owners and freelancers work just as many (or more!) hours as their traditionally-employed neighbors.
Companies like to play on the desire of people who think you can collect a regular paycheck by simply working 10 to 15 hours a week from home. You might get paid, but, you won’t receive a full-time paycheck with part-time hours. After all, there is no such thing as a free lunch, and, unfortunately, too many work-from-home schemes make these claims.
There are exceptions to every rule, but, the people that do make a replaceable income and now only put in a few hours every day probably made many personal sacrifices for several years to get to that point. See the FTC’s site for more info on avoiding scams in this area.
The moral of the story? Stay alert.
“Make money” schemes have always been around, as the prospect of making a lot of money for a little work is always enticing. Unfortunately, many people do not realize that most of these claims are false until they have paid a small fortune in consulting services, membership dues, and buying inventory for a scam product. While you can improve your financial shape by working smarter and not harder, it just doesn’t happen overnight.
Finally, if multiple people are telling you something is a scam but deep down you really want it to be true and don’t believe them, that means it’s even MORE likely to be a scam.
Smart people fall for scams all of the time, often because their emotions override their logic, but you don’t have to be one of them.