Before you invest your earnings, it is important to check for scams and verify credibility of the investment firm. The Better Business Bureau said it's essential to take precaution with all investment opportunities. Studies show that investment scams are on the rise over the past decade. Baby boomers in particular are more vulnerable to such schemes, as many are now managing their own retirement account.
There are three key strategies you can use if you aren't certain about a specific investment opportunity:
1. End the conversation - Practice saying "No"
Simply tell the person, "I am sorry, I am not interested. Thank you." Or tell anyone who pressures you, "I never make investing decisions without first consulting someone else.
2. Turn the tables and ask questions
A legitimate investment professional must be properly licensed, and his or her firm must be registered with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or a state securities regulator, depending on the type of business the firm conducts.
3. Talk to someone first
Be extremely skeptical if the person promoting the deal says, "Don't tell anyone else about this special deal!" A legitimate investment professional won't ask you to keep secrets.
When making an investment there's no urgency to race against the clock – take your time and make an informed decision.