When someone invites you to a lunch or dinner financial seminar, are they trying to sell you something? Probably. Is it a scam? Not necessarily. It all depends. Often someone (for example, an insurance agent) will sell a product via a seminar or an invite-only lunch or dinner gathering. Sometimes they will hold a โmeetingโ or even come to your house.
This could be a very well-meaning person with ideas that could really help you, or it could be someone who just wants to make a quick buck. The products they try to sell you may be totally legitimate, but that doesnโt mean that buying that product is the right move for you.
What donโt you need?
Often, the โscamโ is simply pushing you to buy a genuine product thatโs simply not right for you. For example, if you have hardwood floors, do you need a carpet cleaning device? No. But that doesnโt make the device defective. It could be a perfectly good carpet cleaner, you simply donโt need it. If the person trying to sell you that device knows you donโt have carpet, then they may be trying to swindle you in order to make a quick buck. The legitimacy of the product isnโt always the concern, itโs whether or not you need that product.
It may work for you, but how well?
Sometimes the product being offered would work for you, but that doesnโt necessarily mean itโs the best fit. For example โฆ letโs say your house is too hot during the summer months, and youโd like to cool down. Someone might encourage you to buy some lemonade. While that might cool you down in the short term, wouldnโt a fan work better? And to take it a step further, someone else could offer you a central air conditioning system. While this may keep your house much cooler than the fan, youโd want to be sure you fully understood the costs of installation, maintenance and any ongoing costs before making that purchase.
Ask questions. Many, many questions.
A good rule of thumb with investing is โฆ if something sounds too good to be true, it probably is. When it comes to financial products or vehicles, there is no such thing โeasyโ money. A scam artist might tell you an investment is โrisk-freeโ, but that is often a stretch. For example, many โguaranteedโ investments are not actually guaranteed by the FDIC, only by the company that is pitching them. Try to think rationally, maintain a healthy amount of skepticism, and ask any and all questions that may come to mind. Some important questions to ask may be โฆ What are the specific risks involved? What are the actual costs? How long-term is the investment, and/or how long until you might see a return?
The fear factor.
Often, skilled salesmen will use emotion as a tactic to help them sell something to you more quickly. The emotion can vary, but often it involves instilling a fear of some kind. Fear of financial ruin, for example, or fear of leaving loved ones unprotected. The fear can be very real and often very valid, but the solution they offer might not be. If you feel youโre being steered into something based on emotion, or if you feel a great deal of pressure, it may be best to wait and decide later. The next day, the next week โฆ take your time. Someone looking out for your best interest shouldnโt be offended if youโd like to learn more or โsleep on itโ before making a decision.
Speak with someone qualified.
Itโs not always wise to make decisions based on what a friend, relative or colleague has done. While that person may be very intelligent, and/or while the investment may be doing very well for THEM, it still may not be a wise move for YOU. Your friend may be well-meaning, but that doesnโt mean they are qualified to give you financial advice. If you are unsure, talk to a qualified, experienced financial professional.