When you have a lot of money lying around, there are a few options at your disposal which can help you multiply its worth. For example, you can deposit it in a savings account and reap constant profits year after year depending upon the type and duration of the deposit you make. Or, the other, usually more profitable, way of increasing the value of your money is to make a good investment with it.

Now there are certain traits that accompany a good investment. First, of course, it should give you a satisfactory return on the amount of money you are investing. Second, it should not exceed your risk appetite, meaning that the level of risk associated with your investment should not be more than what you can comfortably afford to take. And finally, it should be the best investment after considering all investment options in front of you.

When you have a lot of money lying around, there are a few options at your disposal which can help you multiply its worth

While it is always good to research before making an investment, sometimes finding out whether an investment is good for you or not is much more complicated than you might think. Investment fraud happens all the time, whereby investors put their money in opportunities that promise to payback unusually high returns, only to find that their investment has gone down the drain either because it gets stolen or because the person they trusted with their money simply fails to deliver any profits. However, there are always some warning signs in such investments, and you should be wary of them whenever you are evaluating investment options.

Evaluate Your Broker

Going to a professional broker is the way forward when it comes to making investments, as they are experts in the field of investment and best positioned to offer you expert advice when it comes to making an investment. However, you must understand that not all brokers will maintain your best interest at heart, as for them their personal gain is of much greater importance.

If your broker is asking to work on a commission, then that should be the first red flag for you. You see, when brokers work on a commission, they will naturally prioritize those investments over yours which offer them a greater profit margin, which means that your money won’t get invested in the best possible investment opportunities. Of course, not all brokers who work on commission indulge in such a practice, but when the payback system is based on commissions only, then you need to be extra wary of the decisions your broker makes regarding your money.

If your broker is asking to work on a commission, then that should be the first red flag for you

Also, many brokers throw many far-fetched ideas your way to advertise certain investments, labelling them as instant sell-outs and encouraging you to make an immediate investment decision before it’s too late. You must bear in mind that good investments don’t have an expiration date, at least according to Todd Tresidder, who is the genius behind the blog Financial Mentor.

If your broker claims to have insider information that he/she will use to benefit you, back away as fast as you can because trading on insider information is illegal. If they claim that an investment will become extremely profitable in the future, without providing you a very sound explanation of why that may happen, then you may be better off finding another broker to deal with you.

Beware of Borrowing Money

You may be an investor with a very high risk appetite, in which case your broker will be right in recommending an investment portfolio that includes borrowing. However, an assessment of your risk appetite based upon your investment goals and preferences needs to be conducted by your broker before the recommendation to borrow is made. If your broker skips over all such evaluation, and jumps straight to the recommendation that you need to borrow money to maximize your investment potential, then it is probable your broker is trying to con you.

You may be an investor with a very high risk appetite, in which case your broker will be right in recommending an investment portfolio that includes borrowing

You Should Get Your Cash Whenever You Want

Almost every fraudulent scheme has one feature in common: you never get your money back. Similarly, if your broker is not returning you the money you’ve invested even after multiple requests from you, either claiming to have invested it in something that is difficult to liquidate or suggesting that you keep it invested for a longer period of time for a much higher return, then that should be enough warning sign for you to probe the situation and push for the return of your money.