Side Hustle

Avoid Bad Business Deals

What would you do if a friend told you he had a business idea that would make you rich beyond your wildest dreams in just two days?

This is what Abel Ndoro heard, and 48 hours after investing in his friend’s idea Abel had lost R30 000 that he’d borrowed from the bank. The ‘friend’ disappeared without a trace, and Abel had to take sole responsibility for the monthly loan repayments, now without the expected extra income.

Being scammed into a bad business deal could happen to anyone. When it comes to friends and family, our common sense and cynicism fly out the window, and we sometimes make bad decisions. How we face up to those bad decisions is important, and taking responsibility for these choices can help you out of a difficult situation.

Abel consolidated his debt and recovered from the experience in due time. His financial crisis ultimately left him with a stronger credit rating, and he learned valuable lessons about dealing with a financial crisis.

Here’s Abel’s advice on how to spot a bad investment:

  1. First of all, if it seems too good to be true, it probably is.
  2. Don’t get distracted by big promises. Make sure you do all the necessary background checks.
  3. Always leave a paper trail. You need to get everything in writing, no matter who it’s from.
  4. Have an accredited financial advisor, investment broker or lawyer look over all the details before you commit.
  5. Make sure you have a fallback plan. Even some of the best investments can go wrong, and you need to know what you’re going to do if that happens.

Make sure you use your money wisely, and if you’re ever in financial trouble, seek professional help. You are your own best hope for turning your life around, and when you choose to not run away from your problems, you may come out of it stronger.

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