Are you a blind investor?

How much financial knowledge d you have? According to a financial crimes analyst with Bank Negara Malaysia, not very much. The average Malaysian public owns very little financial knowledge. And because of this, many people lose all their money in dubious investment schemes that promise high returns.

According to a report in theSun newspaper, more than 95 percent of such people have no knowledge about how financial systems work, or even know the basic financial terms.

It came as a surprise to me when the analyst said that Bank Negara discovered that victims often did not know what is meant by interest rate or even what a fixed deposit was.

“It is shocking. How can they believe they are going to make money in an investment scheme when they don’t even have the basic financial knowledge? This ‘investing’ public have no clue whatsoever that in most cases, promises of high returns are just that – promises.

“It is a big cause of concern to see pensioners, housewives, students, fresh graduates and even professionals such as doctors and lawyers getting involved in some money-making scheme and ending up losing all the money,” the analyst said.

The most susceptible and vulnerable group of people are those that are over-ambitious and those who want to get rich. In short, the greediest ones. They fail to realise that there is no short cut. “No investment scheme in the world has earned its investors consistently high returns year in and year out,” said the analyst, who pointed out that even schemes that appeared to do so, such as the ones run by investment gurus such as Bernard Maddoff and Alan Stanford, turned out to be scams.

“Moreover, such schemes come to light only after many have lost their money. We are constantly taking action against unlicensed schemes but ultimately, it is up to the individuals. They must realise that money can’t be made easily through some fancy concept explained by a sweet-talking, rich-looking person in a sophisticated office.”

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