Avoiding 'shiny thing' strategies for making money

Whether it’s about investing for the future or earning more money, there's only so long a human being can tolerate being told, "Hey, I know it's tough, but you've got to hang in there. Stay the course. Remember, you're in it for the long term."

Facing a tight budget, rising prices and a roller-coaster stock market, you might think at some point, "There's gotta be a better way."

Is there? Really?

'Shiny thing' strategies

When the stock market gives you more of a thrill ride than you're willing to take, it's tempting to cash out and look for other investment options.

That's when somebody tells you about a new shiny thing.

It could be an alternative investment: Commodities, hybrid bonds, leveraged single-stock exchange-traded funds, hedge funds, private equity, preferred and convertible securities, real estate investment trusts and structured notes are a few.

The people who design these investments are creative, to say the least. One new hybrid index fund invests in a portfolio of large-company stocks for overnight trading only. Get this: The fund buys when the stock market closes and sells when the market reopens the next day.

Other "big-money ideas" can take an ugly turn fast:

• Lottery tickets and sports betting apps (if you don't budget for a long stretch without winning or for compounding losses).
• Crypto (especially if you buy into more risk than you were prepared for).

Whatever the new idea is and whoever is pitching it to you, make sure they can explain the mechanics of the investment — the benefit and the downside — in a simple and easy-to-understand manner.

If they can't, what are the odds things will end well?

Schemes that seem too good to be true

You may be looking to pad your budget with some extra income.

Every few weeks, I receive an invitation to wrap my car in the logo of a national brand to make "easy income by simply driving around as usual." Some legitimate companies do this, but many of these "wrap your car" offers are scams.

According to the Federal Trade Commission, car wrap fraud begins when the scammer issues you a large payment — more than the agreed-to income. You are to deposit all the money, keep a portion but immediately issue a separate payment to a detailer that will install the vehicle graphics. That payment, which is being paid to the scammer, is cashed, but the check issued to you is worthless.

Such fake check scams can come in many forms. Be particularly wary of text pitches that originate from email addresses rather than phone numbers.

Other quick-money schemes to be wary of:

• Gaming apps that promise to pay out in cash. Though not usually a flat-out fraud, these "money-making" apps usually offer meager payouts, at best.
• Peer-to-peer payment scams. Zelle and other P2P payment apps offer a quick way to move money — sometimes into the wrong hands.
• Cryptocurrency fraud can promise big payoffs with initial offerings, phishing scams and the lure of celebrity endorsements.

Questions to ask on a 'shiny thing' strategy

When considering an alternative investment or new income opportunity, ask questions such as:

• Does the new idea have a successful track record? Most of the "you've got to get in on the ground floor" strategies don't. It's such a new, groundbreaking approach that nobody's made money on it yet. Nobody's lost money on it yet, either. Or if they have, are they willing to admit that to you?
• Is the recommendation from someone who is significantly invested in the idea and can show you proof of that — or is this just a sales pitch?
• Are "guarantees" in writing?
• Even so: Do the guarantees sound too good to be true?
• Are you putting up money you're truly willing to lose?

Whether it's boosting your income or saving and investing, there are no quick-and-easy answers. A prudent, well-planned course of action and a great deal of patience are required.

Stay the course. Remember, you're in it for the long term.