How not to be a victim of financial crime

Financial crimes and how not to fall victim


I write a lot about the need to save money and invest for the future. It is just as important though to be careful what happens to our savings. How do we invest our savings in the right business? Investing for the long term can be challenging. How do we know that the company that we have put our money in will still be around when we need the money back? We also know that to get great returns in the future, we have to invest in assets or companies that are risky. Even if we elect to start our own business, we are not guaranteed success.

Invest in the right business

It is not always easy to find the right business to invest in. Think back about all the great companies that are no more. With all of the above, it is easy to be discouraged from investing for the future. Imagine if you invested in Nokia, Kodak, Blockbuster or NCR etc. These were great companies at some point in the past, but are no more. Owning a part of a business is not easy, you must monitor the trend and be ahead of the game. If your business is not ahead of its game, then it may become extinct in time.

It is important that you not only pick the right companies for investment purposes, but you keep the companies for a few years to monitor their progress.

Why some companies fail

This brings me to another reason why some organisations we invest in may fail. The first is the greed of the people in charge. Some company directors are more interested in the high life than they are in running their organisations and you may have heard of several of these company founders. Recently, Elizabeth Holmes of Theranos was found guilty of taking investors money and blowing it on non existent technology idea. She is not the only one.

You may recall several companies that have gone bankrupt due to the greed the people who are supposed to be in charge of these companies. In case of Enron and Worldcom, the top managers manipulated and lied about the performance of their companies whilst they look after themselves.

Good old Bernie Madoff took money from investors, spent the money and kept lying about his ability to generate great performances for them. There are more and we will talk about some of the greatest frauds of all times.

Mistakes and crooks

For investors, the result is the same whether the company you invested in made a mistake by not being innovative or it gets crushed by the competitors like the mobile phone companies; HTC or Blackberry or a case financial mismanagement, the result is the same. Your hard earned money can disappear due to no fault of your own.

I will write more about the mistakes that organisations make that could be fatal to their existence and your future investments. Even the most successful companies do eventual run into trouble. As investors, we need to monitor the companies and the people we give our money to. There are thousands of companies on the stock markets across the world. It is very difficult, even with all the research that we conduct to find the best ones that we can invest in. Most importantly, are their ethos and company policies in tune with our beliefs?

Fewer companies, but watch like a hawk

Hence, it is better to invest in only a small number of companies that you can monitor and look at the activities of their activities. Watch out for the tell tale signs, especially if the directors start to sell shares or award themselves big bonuses etc.

Robin Hood Market- The Princes of thieves?


Check out some of the links below


The great frauds



The Theranos case



The case of HTC crushed by competitors