Many people will fudge a little bit on the facts. Was he really the tight end who caught the winning pass in high school, or did he sit on the bench? Did she make Dean’s List all four years in college or just get a few A’s in English?
This is a big problem. Though by and large, particularly when it comes to money and investing, most people are honest, unprepared investors tend to assume everyone is as honest as they are. But you can’t spot a fraud unless you think like a liar.
Before we go further, following is a brief primer on a few basics of how to think like a liar—a perspective on the swindler state of mind.
You begin with an idea that might provide a high return on an investment. The idea doesn’t have ...