Seniors can invest their money wisely to earn residual income. However, it is always recommended to look out for investment fraud, which can take many forms. Some of the investment scams that an elderly can be lured into include pump and dump, ponzi schemes, prime bank, off-shore investing, pyramid schemes, seasonal trading, low risk investments and affinity fraud among others.

New and old tricks are being used to lure a stream of seniors into scams. You can spot an investment scam if you pay attention to a number of things:

Avoid making a deal on the spot

Take time deciding on whether to invest in a new venture or not. Avoid making an instant decision without fully understanding the investment. If the person proposing the investment opportunity is genuine about the venture, he or she will give you time to mull over the deal.

Research and do a background check

Get as much information as possible about the investment. You can check the background of the company offering the opportunity including its reputation and financial position. Check if the company has been involved in any scams or any other unscrupulous dealings.

Avoid commission advisers

A fee-based adviser is more likely to give you accurate information compared to a commission only advisor. The former is paid for their expertise and time. The latter is more likely to undertake irresponsible selling and buying since he or she is paid based on the commissions you make.

Educate yourself

Education is critical to avoid investment scams. Carry out research on other numerous ways to avoid scams. Also learn how fraudsters can mix the truth and lies to lure you into scams. Seniors can arm themselves with adequate information that can throw potential fraudsters off balance. In addition, learn about the necessary procedures you may need to take in case you are defrauded and need to take proper action.

Check for warning signs

Investment scams can be characterized by use of high-pressurized sales tactics and guarantees. Proposal for an immediate action, limited availability and perception that the investment tip is a secret are other traits of an investment scam.

Check other investment products

Do not concentrate all your energy on a particular venture. You can research on other available products and ensure they are registered by relevant regulatory bodies.

Exercise skepticism

No matter how good the deal is or have good instincts about it, seniors should always exercise skepticism.