Be on the lookout for investment scams in the wake of natural disasters.
When natural disasters strike, stories of ordinary people doing extraordinary things to help their neighbors in need come forward. When things are at their worst, the best in some people rises up to meet the challenges a community faces during the long recovery. Sadly, as if death and loss were not enough of a tragedy, con artists and scammers come out of the woodwork, adding to the devastation in the lives of disaster victims.
A self-directed IRA gives you the freedom to invest in private equity and private lending, provided you follow the IRS rules. This ability allows you to use IRA funds to invest in things that benefit your financial future as well as help people in need. However, as with any investment opportunity, you need to make sure you do
your due diligence
before parting with even a small portion of your IRA funds.
Investment scams can take different forms. Swindlers can set up fake companies under the pretense of providing services to help a community rebuild. Your investment in this ‘company’ only makes it to the pocket of the con artist and not the area in need. Con artists have no problem exploiting the real pain and suffering in the wake of a disaster to gain an extra advantage in their fraud scheme.
Keep a skeptical eye out for business investment opportunities related to Hurricane Sandy or other future natural disasters. While it’s natural for some investments to not perform as expected, make sure it was a legitimate investment in the first place.
Here are some online resources from the Securities and Exchange Commission that can help you get started in performing due diligence for a potential investment: