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5 Risky Schemes You Should Avoid When Managing Your Money

I’m not going to lie. I love games. I do a crossword puzzle nearly every day. If I find myself at, I have to pry myself away. I think games are great for everyone.

Unfortunately, this mindset doesn’t apply to all games, specifically “money games.” Despite my love of games, there are plenty of games people play with their money that I would not dare. Some would call them “investments.” Others would call them “savings strategies.”

Though some of these are up for debate, and you may not agree with all of them, these are five games I would never play with my money:

1) Zero Balance Transfer Game
Some will wholeheartedly disagree and argue that moving balances from card to card to avoid extra interest is a good move. I disagree. It can be pulled off occasionally, but it is a very risky game. What could possibly go wrong by transferring balances to save on interest and take advantage of introductory rates, you ask?

  • Transfer Fees – It is NOT free to transfer balances, usually, the larger the balance, the steeper the fee.
  • Too Many Cards – A bunch of cards equals havoc for your credit score, especially when you open and close cards “willy-nilly” after taking advantage of their special offers.
  • High Interest Rates – Everything might seem all fine and dandy as you keep moving your balances around to keep taking advantage of introductory 0% APR rates, but as soon as you miss a payment, or forget to transfer a balance before the introductory period ends, you will lose all the progress you have made due to astronomically high interest rates. I would not want to live under this pressure! Unless you’re really disciplined and organized, and have some experience with some money-making strategies like balance transfer arbitrage opportunities, don’t take the risk here.
  • Direct Credit Score Impact – Established credit and new credit are two big pieces of your credit score. You may think you’re saving money by avoiding some interest charges, but consider the long-term cost to your credit score before you decide to try it.

2) Multi-level Marketing (MLM) Schemes
Just when you think that pyramid and MLM ploys were dying off, more creeps arrive who know how to swindle people on the Internet and in person. I don’t care if the initial investment is “only $5,” avoid it like the plague. These schemes are far worse than taking your money to the track, which is saying something. Here, you have about .001% chance of making any money.

  • Don’t be Naive – If anyone at all is trying to get into your wallet, do your research on them first. and are two very helpful sites when looking into companies. Also, check out the Better Business Bureau to see if there is a profile for the business in question.
  • It is Difficult to Tell the Difference – Nowadays, sniffing out legitimate “opportunities” can be tough, especially to novice Internet users. A few clicks of the mouse and some credit card info can be submitted in no time. Be very cautious!

3) Gambling Game
Gambling is a huge piece of our economy, and only seems to be growing. There are very few feelings like the rush that casino games can bring. I know the feeling personally. If you sit me down at a poker table or black jack table, I could stay forever. Unfortunately, some people think they can beat the game. Then the game ends up beating them. Just like drugs and alcohol, gambling can become an addiction, one that can be very hard to recognize. If you are going to gamble with your money, try to remember a couple of things:

  • Set a limit, and once your reach it, dig no deeper – Control all of the variables that you can. You may lose your stash, but if you have a limit of what you are willing to lose, go no further.
  • You Can Not Beat the Game – Have you ever heard the phrase, “The house always wins”? Well, it is true. That is why their lobbies, hotels, and clubs are so plush. They have the money (your money) to go overboard with their hotels. I don’t care if it is at the casino, online, or at the track. The odds are highly stacked against you.

4) Holding On to Debt Repayment Funds
You may not even consider this “playing a game.” I do. My theory is, if you have some cash saved up, use it to pay any debt. I hate debt just as much as anyone else, and believe that it should be paid off with every extra penny. If you are lucky, you are getting 2% right now on a very good savings account or a decent CD. Conversely, you are paying monthly interest fees far higher if you carry a balance on your credit card. Because of this, getting rid of your debt is actually the number one way to get the best rate of return on your money. And the quicker you pay it off the better. Service like DebtGoal can help you on your debt-free journey.

5) Loan Game
I’m not a fan of “social lending” websites. My thought is, if you can not get a loan from an institution, there is a reason. Taking your chances that the guy with a D-graded credit score just to get a bit higher return is probably not going to work out. Sure, I know a few people who have had amazing success with social lending; I also know some who have had nightmare experiences. If I’m looking for a decent return on my money, I can think of many ways to invest that are more stable and much less of a gamble. Of all of these, this is the safest “game” you could play, especially with an accredited service like Lending Club, but it is just not for me. Why?

Final Word
Feel free to disagree with me on any of these “games” as they are just my personal take on dangerous areas to place your money. Yes, all of the above can work well for a select few, but statistics show that these are losing propositions for the vast majority. Some see opportunities, some see potential, others see a challenge. No matter what you believe these games are, danger lurks. I can’t say it enough just like you can’t hear it enough: “If it sounds too good to be true, it probably is.” Go with the tried and true methods for earning and saving. There is a reason that they are “tried and true.”

You are looking at Matthew Breed. He is a 30 year old sports nerd who lives in North Florida with his fiancee, Sarah. Originally in school for a Business degree that did not work out due to capricious youth and irresponsibility, he is currently "getting past" his Peter Pan syndrome and attends classes for a degree in Information Technology while working full time. His care for personal finance stems from a modest upbringing with fiscally responsible parents who highly value education and frown upon frivolity.