The 5 Wealth Killers No One Talks About - Part 4: Too Good to Be True

 In Part 4 of The 5 Wealth Killers No One Talks About, George Jameson, CFP® and founder of Capital Wealth Group, unpacks a tempting trap that promises big returns—but often leaves people worse off. Don’t get caught chasing the wrong thing. 

 Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

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This is for education only.It is not tax, legal, or investment advice. Before  acting on any information consult your tax, legal, or investment advisor.

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Transcript

George Jameson: 0:20

Hey, and welcome back to the show. I'm George Jameson, certified financial planner and founder of Capital Wealth Group, located in Columbia, South Carolina. We've already unpacked some of the big financial pitfalls that can quietly derail your financial goals, like overspending on housing, new vehicle costs, and high interest debt. Today we're going to dive into wealth killer number four, the desire to get rich quick. Now listen, I get it. The idea of hitting it big, scoring a massive return overnight or finding a secret strategy to escape the nine to five forever is very tempting, especially with social media showing overnight successes left and right. A great example is Roaring Kitty, AKA Keith Gill. They even have a Netflix movie based on his success. it is really a great story. I love the movie, but here's the bottom line. Keith Gill's story is part research. I'll give him that. ton of risk and a whole lot of right place, right time. It was during COVID. Our government gave out a bunch of money to everyone, and everyone was glued to their phones and computers and online. It really is an incredible story, but definitely not a reliable strategy for building wealth for most of us, trying to do what he did or following him is a huge gamble. If you're serious about growing wealth, the slow and boring route. Diversified investing, staying in the market, avoiding high interest debt is still really the best bet. So let's talk about the psychology behind Get Rich quick. The desire to get rich quick usually comes from a place of impatience or financial frustration. Maybe you feel behind on retirement savings. Maybe you just want out of the rat race like most of us. Or maybe you're simply tired of feeling like you're doing everything right, but not getting ahead. But here's what happens. That mindset makes us vulnerable. It pushes people into risky, confusing, or downright fraudulent opportunities that promise the world and often deliver very little if anything, and the worst case scenario, you could lose everything. And unfortunately, these get rich quick schemes are everywhere today. Let's look at some of the really bad, even fraudulent examples to help you avoid some of these. Number one, the secret investment that promises huge returns. These are usually private, non-registered investments. They aren't regulated. They're often pitched as exclusive, or friend and family only deals, and they promise crazy returns sometimes 100% or more with little to no risk.. This is a major red flag. If someone says, this isn't something you can find on the stock market, or so and so doesn't want you to know about this, you probably should run the other way. And I'm not saying that there isn't a place for private equity. For some folks, but for most of us, sticking to publicly traded investments is the best way to go. These people are counting on your fomo, fear of missing out, and that fear can lead you straight into a super risky investment or even an outright scam. Number two is cryptocurrency trading scams. And I'm not talking about owning Bitcoin. I'm not saying you should own it or not, but this is cryptocurrency trading scams. We've all seen these fake crypto giveaways on Facebook. Celebrity impersonators claiming so and so is giving away Bitcoin or slick looking websites that promised guaranteed returns for trading Or even these fake testimonials. That promise guaranteed returns from trading, cryptocurrency and penny stocks. These are rampant online. There's even a growing scam trend called pig butchering, apparently, where someone builds a fake online relationship with you. Often over weeks or months, and then pitches a crypto investment or some other crazy investment. Once you send your money, it's gone. No recovery, no recourse. So number three, fake work from home jobs. These are exploding right now. You'll see them on social media or even spam text. Earn 3000 a week from home. Remote assistant job, no experience needed. Here's how they work. First. They want your information. Your address, your phone number. They may even ask for a small training fee or equipment deposit, but not always. They really want your bank information or social security number, and they'll say they'll want this information to process, your application. They're really just trying to steal your identity and then in others, you actually may start working and then never get paid. Don't fall for these scams. Real employers won't ask you to pay to work for them. And then number four, this is similar text message and social media job offers. I've seen these pop up like weeds lately. I get them myself texts claiming there's a high paying job open. And that I would be the perfect candidate, or others. Say, work from home. Work part-time, make this amount of money You'll also see Facebook messages outta nowhere offering. Some type of partnership or a job offering. These are almost always scams. They prey on people who need a job or who need more income, offering high income with zero effort. And then number five, online trading and courses. There's a difference between starting a real business and getting lured into a scheme, some of these influencers make it look like you can start a successful online store overnight with no experience, and you'll rake in tons of profits. What they don't tell you is that many of these industries are already oversaturated and it's not that easy. Or they would just be doing their own and not bothering, trying to scam people into paying for their courses. You'll often need to invest money before you make a dime, like paying for their courses. They're usually selling you the dream more than the method, and the list goes on and on. These are actually pretty much all scams. And there's plenty of others. Then you have the get rich quick schemes, like day trading, stocks, and buying so-called penny stocks. These small penny stocks are often manipulated and best to avoid. For most of us. It's best to avoid individual stocks in general, but definitely penny stocks. If you've ever seen the Wolf of Wall Street, it may not be that extreme, but there's still a lot of manipulation going on. So what's a smarter way to build wealth instead of chasing the next big thing. For most of us build wealth, the boring, reliable way with diversified long-term investments. Now, I'm not saying don't go out and be an entrepreneur or start a business, but you gotta be smart about it and don't get conned in to all these things you see on social media and text. But what I'm saying is with the money you have saved is best to build wealth, the boring, reliable way with diversified long-term investments using low cost exchange traded funds, IRAs, 4 0 1 Ks, Roth IRAs, et cetera. Yes, it's not flashy. Yes, it takes time. But the compounding effects of smart investing are still powerful and in play today, let's say you take$10,000 and invest it with a 7% average return over 30 years, that grows to about$76,000. Now, you can't retire on that, but that's real money. Compare that to putting 10,000 in some of these crazy crypto coins other than Bitcoin or penny stocks because someone on Reddit said it was going to the moon and it may go to the moon, but it also may crash and go to zero. Oftentimes it may go way up and before you know it, it's way down. And a lot of people lose and just a few win. But even if you got lucky one or two times, the chances are you're not going to win over the long term day trading and trying to gamble. So let's say you lose the 10,000, so now you're not just back to zero. You've lost time, money, and maybe even trust in the whole process. And now for the real estate crowd, real estate can be a solid investment. No doubt. I love real estate rental income tax advantages, appreciation. It all sounds great, but I've seen people jump into real estate with no reserves, no plan. And in today's high interest rate environment, it's a lot harder to make the math work. So don't jump into real estate just because you saw someone on TikTok brag about their Airbnb income, make sure you understand the risks, the math and the responsibilities. Now, here's some final thoughts. The desire to get rich quick doesn't make you greedy. It makes you human. But it can also make you reckless and broke. So here's the rule of thumb. If it sounds too good to be true, it usually is. There really are no true shortcuts. There are only smart habits, time and consistency. Most of the wealthiest people I know didn't get there overnight. They got there by living on less than they made investing the difference and avoiding major mistakes, and doing that over and over and over again. Now, I'm not saying you can't have dreams,. I am saying, don't let those dreams blind you to reality. Because the biggest wealth killer really isn't a bad investment. It is chasing the illusion of easy money. And that wraps up today's episode. Next week we will wrap up this series with Wealth Killer number five and it's one of the most common mistakes I see investors make. So stay tuned to find out. Thanks for tuning in. If this episode resonated with you, share it with a friend. Let's help more people. Stay grounded, stay smart, and build real wealth over time. Take care, and I'll see you next time.