How to spot them in 6 steps

6 min read

In the past few days, the National Banking and Securities Commission (CNBV) approved the first platform for inter-person loans to act as a Collective Funding Institution (IFC) under the Law Regulating Financial Technology Institutions (Fintech law).

How to spot them in 6 steps
How to spot them in 6 steps

This means that 93 fintech companies are already in the approval process of the CNBV, the Bank of Mexico and the Ministry of Finance and Public Loans, including 34 collective financing platforms or crowdfunding.

“In Latin America we are very used to saving, but not investing. Until recently, it was considered something reserved for people who had a lot of money. The main reason the mentality has changed is that there has been more information on financial literacy in the last five years, ”commented Héctor Sosa, investor and author of the podcast Goodbye to your boss and Spokesman for Investment Forum 2020, in an interview with in Spanish.

The specialist pointed out that one of the fastest growing investment vehicles in the region is the Crowdfunding because it allows you to participate with very small amounts and how quickly and easily you can open your account.

“I like crowdfunding because it democratizes access to investment, but there is a risk. As more and more people enter the investment ecosystem, they often do so without adequate information and even with a little innocence, ”says Sosa.

How do I know if an investment is a scam?


Sosa, who is also the author of the books Investing: Everything You Need to Know About Investing Y. Multiple Sources of Income: How To Make Money Online, advises before entering any investment platform that you should investigate whether it is in the regulatory process and adjust the expectations you will have upon entry.

“You need to be aware of the tax obligations that you will acquire. They will likely expand your income and that will generate taxes. You have to watch out whether what you generate in the returns justifies this “extra job”, so to speak, “says the expert.” It is important to compare before you choose an investment vehicle. In addition to collective financing, there are platforms that The best option is to use your profile, the risk you want to take and the plan you have with your money to determine the most appropriate options. “

Sosa offered us six keys to identify a fraudulent investment.

1. Offers unrealistic returns: They usually offer you impossible solid interests. “They tell you ‘I’ll pay you 10% a month’ but how is that possible when the reference rate is 4% a year and that doesn’t make sense. A profit of more than 50% a year is out of order , a return of 20% per year in a consistent manner for the Mexican Stock Exchange (BMV) – a market that is volatile but generates good returns – is exceptional and very specific conditions must be met. “

2. They can’t tell you how they create value: “Those responsible for the investment or the business are involved in explaining the origin of profits in semi-exotic instruments like cryptocurrencies, cannabis, trading, etc. It sounds very complex from the point of view of people unfamiliar with these tools, but the reality is that they only make the extra money that comes in. ”

3. If something sounds too good to be true, it may not be: “It is not because an investment model is advertised on radio, television or in the press that it means that it is legitimate and reliable. You always have to investigate. If something sounds too good, find information about it. ”

4. They ask you to recruit new people: “If the company pays you for the number of people you bring with you, it is a pyramid scheme that is only supported by the new money that the recruits bring in. Only those who are at the top of the model win. There are multilevels that are legal, but ponzi or scams with flowers of abundance often use this scheme too. ”

5. They are not regulated: “If something isn’t from the CNBV, the Bank of Mexico and the Ministry of Finance and Public Credit or the Association of Collective Finance Platforms (Afico) If it’s crowdfunding, you risk losing all your money. ”

6. It is unsustainable in the long run: “When the business can’t be replicated. You are actually putting your ‘wool’ into something that you don’t know if you’ll see again. ”

Whenever you want to make an investment, be it crowdfunding or multilevel, analyze how they work, what risks and benefits they have, and what tax obligations they have. Search for reviews on blogs, YouTube channels, trade media, social networks, and podcasts to learn about other users’ experiences.

“We must be proud that fintech companies and crowdfunding have grown so fast in Mexico. Like everything else, it has its pros and cons and good and bad players, but this sector is here to stay, it will move on grow and it is. ” It is worth understanding how it works, “concluded the financial expert.

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