He was my coworker. I know him at work for years. It is unlikely he take money and run away.
He ask me a loan to scale up his business, promised to pay 15% annually.
His work is in manufactures industry, maybe B2B. He said he his business don’t depend on number of customer available. I don’t know. I am a salary man. I know nothing about business and investment.
I haven’t ask him into the detail yet. I know nothing about this type of business. He seem confident, but I feel the 15% is so unlikely that will come with (hidden) risk. Maybe my friend is also a victim of another scam, or he just overconfident.
People of Lemmy, I ask you, those who are investor and business owner: is >= 15% annually ROI possible ?
his business don’t depend on number of customer available
Clarify this with them. If the business does not depend on customers and selling a product/service to them, then it’s most likely a pyramid scheme/MLM. If he continues to be vague about what exactly the business is, that’s another red flag. A legit business shouldn’t be hard to explain, especially to people they want to ask for investment from.
It’s a scam, or he really believes it and it’s even worse.
I think I should pull him out of this for his own good.
It is probably a scam, but maybe not. Ask him to explain the business plan to you and show you the numbers. If he is unwilling it is definitely a scam.
The risk is that the business fails. There are no “sure thing” investments, especially at higher returns.
Ask him how his business can fail. If he doesn’t give you a variety of possibilities and ways he’s hoping to prevent them, I’d be very worried that he’s overconfident and not prepared for difficulties.
I don’t need further details to assert “stay away from that ‘opportunity’”
- Ex coworker
- Seemingly Great roi.
That smells like a pyramid scheme from miles away.
You’re not a bank, the details don’t matter. Don’t even bother with getting anything in writing from someone who is over leveraged, because you’re already never getting that money back in any court regardless since the other creditors come first.
85% chance it’s an MLM, 14.9% it’s another dumb business idea and you won’t see that money again regardless.
When it’s 50% more than the historical yearly average return of the S&P 500, you’re right to be concerned.
I don’t know. I am a salary man. I know nothing about business and investment.
I’ll join the “don’t” crowd then but will also suggest that you should urgently get some financial literacy to avoid “scams” like these. If you really want to invest money into something, your best bet would be an index fund or an ETF tracking an index like the S&P 500 which historically returned on average (very important to highlight the “on average”, because not only does it mean that it can be less but it also means it should be a long-term investment for the law of large numbers to be in your favor, not mentioning that holding for long periods has tax advantages depending on where you live) 10.15% per year since 1957: https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
Avoid stock picking, options, cryptos etc… (unless you really, really know what you’re doing) and instead trust when people like Warren Buffett tell you to look at index funds or index ETFs instead and to let compounding do its magic over the years: https://www.cnbc.com/2022/10/03/billionaire-warren-buffett-swears-by-this-inexpensive-investing-strategy-that-anyone-can-try.html
I’d suggest you buy a book like “The Psychology of Money” by Morgan Housel (very good one) and to read it before you make any investment decisions.
thank bro,
If they had convincing evidence that they could produce 15% return with low risk, investors would be beating down their door.
Don’t be a fool OP. He’s either involved in a scam by his own foolishness and doesn’t know it or he’s the scam.
Stay away. There is a 0% chance this will end up working out positively. If he brings it up again after you refuse, set hard boundaries that you don’t want to talk about it and you won’t entertain any further financial offers or advice. If that risks damaging your friendship then it’s a “friendship” that needs damaging.
Sorry to hear your friend’s gotten sucked into some investment cult.
This sounds incredibly risky. Proceed with caution!
Get all the details, then come ask us.
15% is a scam.
