We have now entered an era of hyperwealth and what you think used to qualify a person as “rich” aren’t the same anymore (read more). In this age where currency is slowly turning digital and the value of a cent continues to dwindle down at a rapid rate, we have to look for more opportunities to gain financial advantage. One such opportunity may be found in investments.

When we talk investments, there are many kinds. But generally-speaking, they all agree on one purpose – to secure your future financially. All too often, you will hear people saying these things:

“Hey! I really think you should buy that. It’s a good investment!”

“If you don’t have any use for your money, try investing it! It’ll pay off in the future.”

Or, in the case of financial advisers, you would often hear them say:

“Invest in your future today by availing our one-of-a-kind offer!”

You may hear the word investment all the time. However, are you sure that you really know what it means?

First things first, let’s make things clear: An investment is different from a scam and a scheme. Let’s understand the fundamental differences of the three.

Investment

An investment is when you allot money for something that pays you back with interest over time. This means that you get a little profit for giving your money away – whether immediately or in the long term. There are many things and properties you can spend money on that will eventually turn out to be good investments. Jewelry, for example, is an investment. The perceived value of precious stones and minerals increases as time passes, after all. A house may not be considered the best investment but land is. A house deteriorates in value as it ages and withers away but land never loses its value. In fact, it accumulates value as time passes. With the population growing steadily each and every day, it is forecasted that land will skyrocket in price in the following decades. A car, on the contrary, is not considered an investment. Anything that can be outdated and outmoded is not considered to be an investment. It is best to contact professionals like UK property specialists before making any final investment decisions.

Scam

As the name suggests, a scam is basically a fraudulent transaction. It has no value whatsoever. You are ultimately tricked into believing that you bought something of value when in fact, you have nothing to your name. Sure, every investment is a gamble but when you are scammed, the gamble doesn’t take place at all – you lost right from the start.

Many bad people will try to take advantage of your gullibility and vulnerability so you have to grow out of your shell and learn what life is really like. Don’t easily fall prey to sweet talk or pep talk. It’s easy for someone to say that they’re going to make you a millionaire in two years’ time but that kind of thing is hard to do. Don’t always take people by their word. For all you know, they see your trusting nature as a weakness and plan to use it against you right from the very start. Be on full alert at all times and always be on the lookout for these nasty scammers!

Scheme

Some companies may be real but that doesn’t make them automatically good. A scheme is a little different than a scam but that doesn’t mean it’s any better. A scheme is something that exists – only that, it exists to benefit the wrong people. Maybe you’ve experienced this before but some companies will approach you with the intention of asking you to join their “pyramiding” or networking scheme. As you may already know, a “scheme” is sort of like a plan. It has clear goals to accomplish and a process to follow. More often than not, however, schemes root from malicious or selfish objectives held by the instigator. It is likely that the success of the scheme will hold much merit to him or her. Learn more about pyramid schemes here: https://www.investopedia.com/insights/what-is-a-pyramid-scheme/.

Going back to the networking scheme example, some companies may offer to help you grow your fortune in the future if you help them in the present. They’ll make you invest a certain amount of money, reassuring you that everything will be paid back in several folds, and allow you to join the network and gather more recruits. At first, these kinds of schemes work as they keep the money rolling in. However, the glory doesn’t last for too long. Soon, people will find it harder and harder to search for new recruits. Those who are last to join leave with nothing and those who joined late (will have then) worked too hard for minimal returns. The only people who come out victorious are those who were present from the very beginning. Only those at the very top of the pyramid scheme will have their lives changed.

So when you invest in the UK, make sure that you’re investing in the right things. If you’re unsure about an investment, don’t dive into it headfirst. Instead, carefully analyse the situation first.