How can you tell if it is safe to invest?

Question

What do I need to know about a company to invest in them?
What if an Individual has a business idea how do I asses the risks involved?
Can I check someones credit to see how they handle money?
How can I tell if someone is not going to rip me off?

Answer 1

Rules: Don't invest in fly by night companies.
No more than 5% of your yearly investment total in your friends business.
Do check their credit. Buy a report from a company.
You can only trust your instinct. And remember not to buy exorbitant claims.

Answer 2

Im not understanding your question is it you want to invest in stocks or in a small company of someone you know, but from the questions you asked it sounds like a small buissiness

if you want to invest in a small bussiness that someone is trying to get you involved with you should talk to a lawyer as you would become a bussiness partner unless you where going to give this person a loan and if a bank refused to give them a loan I would be skeptical. But if someone you know is looking for capital to get started then i would look into becoming a limited partner not a general partner. as a limited partner your money would be at risk and not your personal assets. as a general partner everything you own could be at risk to creditors.

If you want to get involved in the stock market start by reading books about it as it is a complicated process or go talk to a financial advisor at any brokerage firm

Answer 3

Always check www.sec.gov