What returns are realistic? When a profit promise is a scam
The quickest way to spot an investment scam needs no finance knowledge: look at how much it promises. Fraudulent platforms talk about 1% a day, 20% a month or “doubling your money in weeks”. A calculator shows why that is impossible.
What is realistic
- Stock markets over the long term: developed-market equities have historically returned, on average, roughly 5% to 10% a year over the long run, with years of heavy losses along the way.
- Savings accounts and deposits: usually a few percent a year, depending on current interest rates.
- Bonds: moderate returns that depend on interest rates and the issuer’s risk.
Most importantly: no legitimate investment guarantees profits. The higher the possible return, the higher the risk of loss.
What scams promise, in numbers
Compound interest turns scam promises into absurd figures:
| Promise | What it would mean over one year |
|---|---|
| 1% a day | Multiplying your money by more than 37 |
| 20% a month | Multiplying it by almost 9 |
| 10% a month | Multiplying it by more than 3 |
| “Double it in a month” | Multiplying it by more than 4,000 |
If a system really did that, its creators would be among the richest people in the world within a few years. They would not need Facebook ads with celebrities or your 250.
Phrases that give a scam away
- “Guaranteed profits” or “no risk”.
- “The robot / AI trades for you, you don’t have to do anything”.
- “The banks don’t want you to know about this system”.
- “Limited places, sign up today”.
- “Start with just 250”.
- “Withdraw any time” (and then you have to pay to withdraw).
What if my balance really is growing?
On fraudulent platforms, the balance you see is a number on a screen, not money. The scammers control what the app displays. That is why they let you withdraw small amounts at first: so you trust them and deposit more. The real test comes when you try to withdraw a significant amount, and that is when “taxes” and “fees” appear.
How to invest without falling for scams
- Only invest through authorised firms: how to check if a broker is regulated.
- Distrust any opportunity that reaches you through ads, social media, WhatsApp or someone you have just met.
- If you do not understand how the profit is made, do not invest.
- Before deciding, talk to someone you trust or an authorised adviser.
Been offered a platform with returns like these? Search it on InvestRedFlags.