Family Matters

I've been approached by a number of people with business and investment opportunities that promise both quick and sizable returns. How can I determine if these are good offers or investment scams?

My initial two-word response is: Use caution! It's easy for people to find themselves taken in by business or investment opportunities that seem too good to pass up. This shouldn't take us by surprise. The Catechism reminds us that “our thirst for another's goods is immense, infinite, never quenched” (No. 2536). This thirst for wealth makes us vulnerable to the many frauds that are promoted today.

One of the sad aspects of investment scams is that frequently those who can least afford to lose the money are the very ones who find themselves victims of a fraud. I just received a letter from one family who fell into this trap. Their financial situation had been tight for some time, with mounting credit card bills, when the wife heard about an opportunity for a home-based business that would allow her to stay home with their children while generating sufficient income to pay down their debts. In order to get started in the business, a $12,000 fee was required, plus equipment and training to the tune of another $4,000. Since the couple had no savings, these charges also went on credit cards.

You can guess what happened.

After taking the money from who knows how many people, the operators are nowhere to be found. Now this family, which already had credit-card problems, is in the position of having added thousands of dollars more to their debt.

How can you avoid making the costly mistake this family did? Follow some simple principles from sacred Scripture:

Don't fall into the trap of seeking quick riches. In Proverbs 13:11, we read, “Wealth hastily gotten will dwindle, but he who gathers little by little will increase it.”

Take time to adequately research any investment before you hand over funds. Proverbs 21:5 says, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want.” In other words, if it sounds to good to be true, it probably is. Of equal importance to solid research is seeking good counsel, especially from your spouse.

Don't borrow money to invest unless there is a guaranteed method of repayment. If you'll be relying on the value of the investment to pay back the debt, remember Proverbs 27:1, which says, “Do not boast about tomorrow, for you do not know what a day may bring forth.”

By placing our trust in God's word and the teachings of the Church rather than our emotions and desires, we'll be equipped to make financial decisions that honor both God and our family. God love you!

Phil Lenahan is director of media and finance at Catholic Answers in El Cajon, California.