You don’t have to be a professional athlete to lose your money to fraud. Current and former college athletes, most of whom have less resources than the pros, can lose their money to scams at any time.
When I graduated, I saw things that looked really interesting, like “earn money while you sleep!”, “become your own boss in 6 months or less!” or “build a real estate empire with no money down!”. But the more I thought about it, the more I realized that my successes were the result of a lot of hard work over time. I didn’t score 1,000 points my first year in high school, and I didn’t earn a DI scholarship when I first picked up a basketball. Those wins took years of hard work, so I was prepared to do the same when it came to my earning potential.
Below are a few scams that I’ve read about or seen friends invest in without much success. As athletes, I would stay clear of these strategies, AKA schemes to make money quick:
5 Financial Scams to Avoid as an Athlete
1. Playing the Lottery
This is probably the ultimate get-rich-quick scheme. My husband and I love to play when games like the Mega Millions make national news, but that only happens a few times a year. We buy a ticket, dream about the lavish vacation we’ll go on, or the mansion we’ll buy, then we lose and laugh it off.
2. Cash App Scam
My suggestion: even purchasing scratch-off lottery tickets often can become a slippery slope. Instead, take those dollars, put them aside like in a vacation fund, and use them to enjoy time away with yourself, your friends, or your family.
I learned about this scam recently. This trick involves you sending money to an ‘investor’ through Cash App, where they then ‘invest’ your money in the stock market so that it can multiply in a few days.
If this already sounds suss to you… well it gets better. When you try to get your money back, the scammer claims there is a Cash App fee to return it. Victims have reported spending hundreds of thousands of dollars to get their money back, but all the cash is really going into the scammers’ pocket.
My suggestion. NEVER send money to a person who claims to be an investor or broker over Cash App, Venmo, PayPal, etc. There are approved online brokerage firms that you can find to invest your money and watch it grow over time.
3. Investing in Cryptocurrency
Investing isn’t a bad thing, but investing with a guarantee that your money will multiply isn’t true. If you meet or find someone that promises to multiply your funds, then this is probably a scam.
Crypto is so new compared to other established securities, and a lot of the values are driven by investor demand and speculation. Unlike other well-known securities that have been around for decades, we still have to learn a lot about crypto.
My suggestion: investing is a great way to grow your wealth over time, so do your research first. Don’t invest in any currency or with someone who ‘guarantees’ your funds will double or triple by x date. Nobody can guarantee the performance of an investment.
4. Multi-level Marketing
Multi-Level Marketing schemes (MLM) usually target everyone, but young people are also susceptible to the promises these companies make.
You’ve probably seen their ads that say “join (Company X) and you’ll get free training, become your own boss and earn six figures while you sleep”. A recent example of this can be seen in the deceptions behind the company LuLaRoe. The company has been hit with many lawsuits, some of which claimed the company sold faulty products and lied about high profits.
My suggestion. Do your research and see if ‘Company X’ is already known as an MLM. Vet their products and see if there are reviews online. You might find that the probable start-up fee isn’t worth pursuing, and instead you can use your hard-earned money to invest in yourself.
5. Buying Online Courses
Bad online courses might be hard to spot, even with research. They start with a phrase like ‘how to get rich in X industry’, they promise you success, and then a blueprint to help you achieve your dreams. These courses are sold at a significant ‘discount’ and guarantee a certain result.
Some bad courses are hard to figure out, because after you sign up instructors could be sharing incorrect or outdated advice. If you’re new to an industry, you may not realize you’re being sold an old bag of goods.
My suggestion: If the price looks too good to be true, and there are no reviews or ratings, it might be a bad course. Save your money and invest it in a course through your college, a professional development course through your job, or my favorite: “YouTube University” 😉
At the end of the day, my best successes happened with good ‘ol hard work. Over time, your small wins (your first job, your first promotion, your first bonus, etc.) will add up and provide you with more financial security than any get-rich-quick scheme can.