On guard against Greed
In the March edition of Consumer Magazine an article on "Get
Rich Quick Schemes" made reference to GLOW or Godly Learning Opportunities
Worldwide. This self proclaimed "Holy Bible based Conference" is being used
by two American businessmen to promote in New Zealand what Consumer Magazine has
labelled a scam or fraudulent investment scheme.
The fact that many Christian's regularly lose money at the
hands of financial charlatans highlights both a naivety and greed that is
commonplace in our society. The guile of the people behind schemes like GLOW is
limitless. In the first instance the fraudsters are not likely to be the front
people of these schemes. In a structure commonly known as the "Ponzi Scheme",
named after the American criminal of the 1920's, the fraudsters target key
people to act as promoters of their scam.
These key people will be highly respected members or leaders
of a congregation or community. In the first instance the fraudsters will ensure
that the key people will receive a significant return on their investment, gains
of 100% to 150% over a six to twelve month period are common. In most cases
these key people will not be aware of the deception in which they have become
complicit. Their integrity and sincerity is an important part of luring further
investors. New investors are added to the scheme under the encouragement of
these key people and on the promise of outrageous returns. Inevitably the
returns never materialize and the investments made by the new people are lost.
Equally damaging is the loss of integrity suffered by the unwitting promoters of
The characteristics of these schemes are the promise of
exceptional if not outrageous returns, very little documentation, a lack of
clarity on how the investment actually works, the use of overseas institutions
in tax haven jurisdictions and there will be a strong emotive pitch that plays
upon our fears and greed.
Having worked as a lawyer with a major offshore banking
group, I can attest to the fact that there is no secret financial market
accessible only to international corporations or wealthy individuals, which
guarantee fabulous returns. High returns are characterized by high risk, anyone
promising such returns with little risk is likely to be misleading or lying to
their audience. The reality is that if the investment scheme was truly wonderful
they would not be sharing it with you and there would be no need to sell it to
The most effective way avoiding being duped is by trusting ".....
in the Lord with all your heart, and do not lean on your own understanding; in
all your ways acknowledge him, and he will make your paths straight "
Stay with what you know
"By wisdom a house is built, and by understanding it is
established" (Proverbs 24:3). Seldom will anyone
be duped into a get-rich-quick scam in their area of expertise. The vast
majority of people who are successful remain in the field in which they have the
most training and experience. Those who lose financially usually do so in an
area they know little about. We only have to remember the number of
inexperienced investors who lost heavily with Ostriches, and Alpaca's.
Don't risk borrowed money
"A prudent man sees evil and hides himself, the naive
proceed and pay the penalty" (Proverbs 27:12). It's
one thing to invest with money that you can afford to lose and quite another to
lose money that literally belongs to another. The former is called speculation;
the latter is surety. There are investment schemes that rely heavily on debt
leverage or borrowed funds in order to make a return. These schemes are best
avoided, if you have to borrow funds make sure there is a clear plan for
repayment and you are able to cover your liabilities independent of your
investment for at least a six-month period. Plan on what you have not what you
expect, "Do not boast about tomorrow, for you do not know what a day may
bring forth" (Proverbs 27:1).
Don't make quick decisions
"The plans of the diligent lead surely to advantage, but
everyone who is hasty comes surely to poverty"
(Proverbs 21:5). The very essence of a get-rich-quick scam is emotionalism. The
promoter urges the potential buyer to act quickly before the opportunity is
missed. The final ploy is to develop an attitude of covetousness by hinting that
another prospect is waiting to take up the deal. Avoid the trap by being "....
still before the Lord and wait patiently for him; do not fret when men succeed
in their ways, when they carry out their wicked schemes. " (Psalm 37:7).
Seek good counsel
" The way of a fool seems right to him, but a wise
man listens to advice. " (Proverbs 12:15). Ignorance can be fatal so
don't risk making an important decision without good counsel. It is amazing
how quickly someone who is not emotionally involved with an investment scheme
can spot its flaws. Good, objective Christian counsel is a prerequisite to any
major decision. In choosing your advisor be sure to select the right person,
some one with requisite expertise, who is truly independent and who displays in
their lives the good fruit of their endeavors.
To avoid the mire of financial scams, you must establish your
standards by God's Word: seek God's plan for your life, stick with what you
know, seek good counsel, and wait on God's peace before acting. "It is
the blessing of the Lord that makes rich, and He adds no sorrow to it"
Sources: Consumer Magazine NZ March 2002
Crown Financial Ministries -– "Avoiding Get Rich Quick