From Foster Lee - Chartered Accountant/Tax Practitioner, Cairns:
My research and experience over many years has taught me many, many things.
One of the most important is to be aware of scams and “get-rich-quick” schemes.
What are the tell tale signs and how to recognise them. Here are some of my own views:-
- Never ever outlay any money to an “idea” no matter how attractive it may sound.
- Always check with the Taxation Office and/or Australian Securities & Investments Commission (“ASIC”) on its legitimacy.
- Always check with ASIC if there have been bad reports/news about this “idea”.
- Always consult your accountant, financial advisor and/or solicitor about the “idea” that you have been told or read about and seek their unbiased professional advice.
- Google more about the “idea” itself.
- Have any of the promotors/spruikers/perpetrators of the “idea” faced criminal charges?
- Were they found guilty, prosecuted, fined and jailed?
- These promotors/spruikers/perpetrators, given a chance, will hack into your bank accounts, tax and medical records and a host of other sensitive personal data.
- Are they now starting up/promoting another “idea” under a different profile?
- Write to the editor of the newspapers asking if anyone has experienced anything bad and/or sinister about the “idea”.
- Speak to those who have used the “idea” especially those who have lost money on it.
- Do not get carried away with high rates of return for your capital. The higher the rate of return, the higher the risk.
- What security are you getting for your investment?
- Is that security tangible and realisable in the short-term?
- Is that security underwritten by a reputable financial entity eg commercial bank or merchant bank?
- Is there a legitimate Australian full street address and not just a PO Box.
The above are what, in my view, you need to know. The list is comprehensive but not exhaustive.
Following the above “guidelines” could potentially save you thousands of after-tax dollars and/or worse still all your retirement savings!!!