How to Avoid Scams and Become a Better Investor

I’m about to board a flight when my phone rings.

I answer as I walk towards the gate agent.

It is someone named Kyle. Nervously, he says, “Hey, I, um, have something to tell you.”

I scan my boarding pass.

“Spit it out,” I say.

“Well, the money you lent us, it’s gone.”

“Gone? It can’t be. I have a first-position lien against the properties.”

“Well, that is in dispute because we promised it to more than one person, and the other is suing us.”

I don’t want to hear it. I don’t want to have any part of it.

What happened? How did this happen? IT CAN’T BE TRUE!!!

I stop in the tunnel, short of the airplane. My palms start sweating. I am in disbelief. Hurt. Just for a second, to prevent the pain, I move to denial.

“Kyle, why isn’t Wade calling me?”

“Well, he is crumpled up on the couch. He is too upset and scared, I don’t know. So I just figured you should know.”

This was back in 2008.

What a long-ass flight that was. Staring out the window. Going from being on top of my game to doubting my ability.

I gave my money to something outside of my control. To be liked. To be part of the crew. To look good.

Have you ever done that? To be included…

I didn’t give a shit about real estate or even the return. I was producing plenty in my business at the time. This hurt and impacted that.

I invested to belong. I didn’t want to seem poor(er) or not part of the cool kids’ club.

The club where they drove fancy, fast, and foreign cars and talked about the mansions they were building and the amazing projects they were doing.

Selling a dream, but creating nightmares. The only problem with their dreams was that it was all bullshit and hype. Filled with stories that were risky but sounded safe and sound.

They weren’t investors, they were speculators. Middlemen. Salesmen. Peddling their bullshit. They were selling a dream without a basis in action or reality.

But I wanted to believe it.

So why would these young guys get better returns than Buffet? What did they know? Did I see something in them that wasn’t in even the best investors?

I guess I just didn’t look because I was around them. Because they were fun. Because they seemed to be happy and selling me a better life.

But it wasn’t my better life. It wasn’t improving my ability.

We Get Scammed When We’re Not Clear on Our Purpose

When we invest our money without growing our skillset, we take risks. When we hope for the best…well, hope isn’t a good strategy for results, but it sure is for risk.

Why didn’t I put it into my life, my skills, my vision?

It was due to a lack of vision. If you lack vision, someone will sell you theirs, but it will involve risk they don’t know how to articulate or choose not to.

I wanted to believe the story. It was due to a lack of knowledge and even insecurities I had yet to face or resolve.

I am a recovering people-pleaser. It. Is. Costly.

It is easy to say yes when we are unclear about our purpose. But it’s easy to say no when we know what we are up to and expand our impact, embrace our dream, and put all we have into it.

Oh, but wait, people will tell you how risky YOUR dream can be. Is it? Risky to whom?

I think spreading money into things we know nothing about is risky. I think skipping steps of growth is risky. I think investing in things we know little about is risky.

Betting on ourselves can be lucrative if we are congruent, if we are aligned, if we are doing the work we have the energy, resourcefulness, and resilience to see through.

But it requires us to take a leap of faith. We must be willing to do something out of the ordinary.

The Abundance of “No”

We have to say no to those that guilt us into real estate, guilt us into a retirement plan, or some gamble disguised as an investment. We must be abundant enough to say NO.

There is no something for nothing. That isn’t how value works.

Something for nothing is the plague of money, a virus destroying prosperity, and the culprit of loss.

These are the stories where people get duped. Where it is like buying a lottery ticket—a scam with a compelling enough story. Why would something (an investment) pay that much? If it were that certain, money would be more easily accessible and abundantly available.

Why would it work now and in the future? What is the exit strategy? Why does it have value?

Crypto. Business. Real estate. Stocks. AI.

People love to get in on the media buzz and get swayed by swirling swindling fueled by rhetoric.

Rhetoric has its place. Speaking something into existence by being committed to a vision.

But some use it to persuade and to lie. When I was in my 20s, I met a very persuasive, prolific speaker—who ended up in jail.

He let me know he was a liar, but I wasn’t listening. He told me if he had a bag of sand, but I wanted diamonds, and he knew he could get them, he would tell me he had a bag of diamonds.

He lost over $100 million of investor money. Not my money, but people I knew.

No one spoke up against him because he would viciously attack anyone who did. He was ruthless about competition. My wife saw through his BS right away. Not me. Why? I wanted to believe. I was naïve. I liked the attention he gave me.

And, well, I didn’t speak up because I was afraid.

He showed me an online attack he orchestrated against someone who said something negative about him. Damn.

When people show you who they are, when they tell you who they are—LISTEN.

I didn’t invest with him, but I was around him enough that I wasted time, plus it damaged my reputation.

Not All that Glitters is Gold

If you are afraid or if you are listening to the same line of bullshit these articulate delusional fundraisers bring, say hell no.

I’m tired of these stories. They are disheartening.

Tired of the fantasy returns people ask for, beg for. They are lured in with return. They are lured in with lifestyle. The people peddling them should know better, but the money (promises and artificial lifestyle promises) blocks their vision.

I know. I know.

As you are reading, I’ve been there. I had money in and referred family and friends to a 12 percent fund called Independent Financial and Investment (IFI).

IFI. $70 million lost.

Me, my parents, and my sister were all impacted.

I wanted to believe. Even though I didn’t get paid for raising these funds, it felt good as those I referred thought I was smart and gave me credit. People used the interest to buy the insurance I sold back then, so I did benefit.

Plus the IFI founder was nice to me.

It was an expensive tuition. Losing $450,000. Going to court (found not guilty, $100,000 in legal fees later).

I’m glad I learned early. It stung enough to stick.

People lost. I lost sleep. But I saw how easy these conversations slip in. How they seem to make sense.

The 12 percent seemed to be reasonable during a real estate bull market. It seemed conservative compared to the 60 percent I passed on thinking that wasn’t sustainable. Comparison created ignorance. A false sense of reality. Stupidity.

I should have known better. But I wanted it to be real. Denial.

That denial cost me two years of my life. Cleaning up messes. Watching $8 million in net worth disappear. And a trip to court.

Investment Losses Cost Us a Lot More than Money

What people think is the worst-case scenario may not even be close. Lost memories with my kids at a young age. Stress to my kidneys, gaining weight, worried and not sleeping, and loss of confidence.

The first investment I was supposed to have a first-position trust deed to secure my money, but they promised it to someone else as well. I had to hire an attorney to get a fraction of my money back. Taking my time. Causing stress. Opportunity cost.

I had a financial advisor sue me for money he lost in a building I was supposed to be an owner and was a tenant in. I was duped as well. I won in court, but still lost time and money. Not really a win.

The lesson? Stick to what you know. Develop the ability to say no. Know your vision. Develop your plan. Invest in yourself. Develop your skills. Enjoy your life along the way. Recapture time lost cleaning up messes that are inevitable with scams and scammers.

Ask yourself why the return, the compensation, or whatever, is sustainable? How do you know? Is it an opportunity or a distraction? Easy money rarely lasts and is often spent much faster than earned money.

If you lose money, what else do you lose? Time? Confidence? Your marriage? Your health? Your creativity? Your innocence?

Learning to invest begins at the first loss. That is when we are ready to listen and learn.

I had a twenty-two-year-old on IG DM with me about whether I considered him wealthy or not. He started asking some good questions, then asked about my net worth.

I didn’t tell him.

He thought he knew it all because he was making $110,000 a year. Impressive. But he said he couldn’t learn from me if he was more successful than me. I might have been that arrogant and misinformed at his age too.

He will be ready to learn when he has his first real loss. That level of arrogance is ignorance that leads to risk and blind spots. That first lesson will be an ass kicker. It was for me.

I thought because the founder of the IFI fund was a seemingly nice guy, that everything would be fine. But good people in bad situations may not make wise choices. Scarcity is a destroyer of wealth and often honesty.

People think that the ends justify the means. This leads to lying. To justifying. Seemingly small lies that lead to big problems.

It is hard to know someone and how they will behave until their back is against the wall. Or they are in scarcity and seeing how they handle it.

When there is money at stake. Reputations at stake. Relevance and lifestyle at stake. They may operate very differently. Put themselves ahead of you.

Gain Clarity to Become a Better Investor

So, when you give your money, why are you doing it? What energy will it take? What do you know about the investment? Could you create those returns? Is there an exit strategy?

Instead: Where could you invest in yourself? How could you protect your energy and funds?

Do you want that call that shifts your attitude like I got on my flight home? Do you want to waste your life wondering what could have been? Working hard and blowing your money on investments you know nothing about?

Bad investing leads to bad thinking. I’ve been carving out two hours a day to connect with people. No gatekeeper, no scale, no funnel, just connecting with people and hearing:

“I should be further along.”
“How did I end up here?”
“I just cry myself to sleep some nights.”
“I don’t know what to do now.”
“My confidence is shot.”
“I’m tired.”
“What do I do? What did I do?”

These are the scenarios that follow financial mistakes and losses.

I am also hearing: “Wait, you have had issues too? You have lost money or made mistakes?”

YES.

You are not alone. You don’t have to go it alone.

Working harder isn’t the only way. Silently suffering isn’t required. You don’t have to be perfect.

Chasing returns to make up for lost time won’t work. Speculation is not the way to wealth.

See Through the Hype and Escape the “Something for Nothing” Trap

Forget the stories that sell us away from our life, from our vision, and separate us from our money.

We want to believe the compelling stories. Someone figured it out and can make you money easily. They built the software, have the trading bots, know some specific strategy that no one else could see. And maybe to some small degree, it could be true…temporarily.

Is the story real? Is the return sustainable?

Why you?

Now that you have heard my story or look at yours, do people understand the worst-case scenario or what might go wrong with their investing? Does investing with them grow your knowledge, your skillset, or simply promise to give you something for nothing, well not nothing, your money?

I’m sharing to let you know I’ve been there.

Not just what I shared above, but over my 25 years of investing, I’ve made a lot, but also lost putting money in bridge financing, hard money loans, and speculative real estate. IPOs. Oil and Gas. All things I didn’t want to study. All areas I had to “trust” other people’s expertise and that wasn’t aligned with my Investor DNA.

Shit, everyone is an expert when the market is going up and up. Anyone can make money when the hype creates the bubble, but can they get out in time? Or do they know when it makes sense to exit? Probably not.

Mistakes lower confidence. Allocating funds requires allocating energy too.

Again, money made without effort spends too easy.

How can you protect yourself without preventing opportunity or being in scarcity? Ask:

• Why would you get the return?
• How do you protect the downside?
• How sustainable are the returns?
• Can you explain it in a sentence or two in a way that makes sense?
• Does it make economic sense?
• Is it aligned with your Investor DNA?

Due diligence is something often neglected, mostly misunderstood, and sometimes drowned by emotion.

Investing in ourselves is a longer route. Investing in our skillsets takes time. Building a team requires effort.

Do you feel worth the support? Are you willing to ask for help? What would it take to speak up? Is it worth it? Are you worth investing in instead?

What about taking time for skill development instead of speculation?

If your vision is big enough, you never have to invest in shit you know nothing about. So much of the world is fueled by stories with no basis in reality; it is a transfer of funds, a transfer of energy. Stop the leaks.

You are worth growing. You can increase your abilities. You can become a better investor.

If it doesn’t make sense, don’t do it. Take back control of your money and life. Let’s share our scars so we learn from mistakes and let go of guilt and shame.

Let’s grow and learn together.