Currency Investing Is Too Risky
Lou has a good friend who invested a lot of money in the Iraqi dinar. He's heard the dinar will go up in value dramatically. Is he at risk in investing in this?
QUESTION: Lou in West Palm Beach has a good friend who invested a lot of money in the Iraqi dinar. He's heard the dinar will go up in value dramatically. Is he at risk in investing in this? Dave says it's an extreme risk.
ANSWER: There's a chance he'll strike it rich, but he is at extreme risk. A buddy of mine went to Las Vegas last weekend and made $100,000, too, but that doesn't make it smart. That doesn't mean it's a good plan for your money. He risked everything he risked in order to make that. In his case, he could afford to do that—the guy I'm talking about—and the guy you're talking about may be able to lose that money, too, but I'm telling you that you have a better shot at rolling dice—literally. You're betting on the currency of an extremely unstable situation. "The news says…" Well, by the time the news knows what's going on, it's already too late one way or the other. I don't have any money invested in stuff like that because I don't like to lose money. I don't gamble in Vegas, either.
I will tell you there's a possibility the guy hits it big, but there's also a possibility he gets zero out of this and loses everything he's put in. I just don't like those odds. I work too hard for my money. I'm not going to just let it slip away. Any time something sounds too good to be true, a good rule of thumb to remember is that it is.