Every day, I see a poster or an ad for some great opportunity: “Make $1000s in your spare time!” is only one example of these ads that promise impossible results for very little effort. Most people avoid these get rich quick schemes like the plague. But there are plenty of schemes out there that are harder to recognize.

In a way, the housing boom that led to our current situation was a get rich quick scheme: banks thought that they could make money quickly by extending credit to a whole list of people who couldn’t buy homes previously. They forgot that there was a reason those borrowers didn’t qualify for normal mortgages. And borrowers also saw an opportunity to make money on the quick: home prices had an upward trend and many home buyers figured that they could buy a house, live in it for a few years and turn around and sell it at a profit. Sure, quick meant three or four (or even more) years in this example, but it was a way to get a whole lot of money than a person could otherwise.

Recognizing Get Rich Quick Schemes

The problem seems to be that everyone wants the opportunity to get money for less effort than they’re used to putting out. And, in many cases, there are ways to do so. But there is rarely just money for free — and it’s necessary to remember that fact when you’re looking at an opportunity. Returning to the housing market for a moment, think about the sense of free money that accompanied many home sales even a few years ago. Some people managed to successfully cash in on rising home values, but there was practically no consideration of the risks that went along with the purchase of a house — risks that went far beyond dropping home prices.

I’m not suggesting that a house is a bad investment. However, I am suggesting that treating the purchase of a home as a get rich quick opportunity — as anything less than a long-term investment — is just looking for a way to make money without much work. And that sort of situation is risky at best.

Scams Versus Schemes

Those ads I mention often fall into the category of outright scams. Unfortunately, when someone offers you an opportunity with returns on either your time or your money that are just too good to be true, it usually is. There are plenty of get rich quick schemes out there which are legitimate, however. Although they are legal, they’re still not a great idea. In general, they carry a level of risk that could wipe you out if you don’t make the big win. It’s a matter of gambling something you can’t afford to lose. If you can’t afford to take on the level of risk associated with a plan, it’s probably worth skipping — even if it seems like a really good idea. If you can afford it — well, it’s up to you.

Popularity: 15% [?]