When it comes to money, be skeptical. Always be skeptical! And watch out for Ponzi schemes in Yahoo ads.

I am always amazed when I read stories about people who got scammed on the Internet. It usually starts with an email like this one I received today:

From: Mr. Alvin Garry.Ernest OppenheimerRoad Lake,5743.JohannesburgSouth Africa. (CONFIDENTCIAL)I know that This letter might surprise you because, we have not met neitherin person nor bycorrespondence. But I believe it is one day that you get know somebodyeither in physical orthrough correspondence.How ever My name is Mr. Alvin Garry, I want to transfer ($125,000.000.00USD) One Hundred &Twenty five million United States Dollars from a Prime Bank here in SouthAfrica to an overseaaccount.First,I must solicit your strictest confidence in this transaction.This is by virtue of it's nature as being utterly confidential.... etc.

It goes on to say if you send some money, or your social security number, or something else to me I can get my money and I'll give you $1 million. This is clearly too good to be true and is an obvious scam. Don't ever get fooled by one of these.

However, these things can get trickier. Yahoo has been running ads for what as far as I can tell is a Ponzi scheme. The ads point you to http://www.gbxfunds.com/. A quick visit to the site reveals a somewhat official looking "financial" site. However, they make the following claims:

Our benefits:
- high profitable returns
- 2.66% per trading day for 15 days (2.66 x 15 trading days = 40% including principal)
- 90% in 3 weeks (including principal, profit payout will be made after 3 weeks) NEW!
- no administration fee
- customers privacy protection
- 10% referral program
- 24/7 tech support
- no statistic manipulation
- never missed a payment to our members
- daily payouts directly to your e-gold account
- all deposits secured and payouts guaranteed!

The 90% return in 3 weeks should clue you in that this is too good to be true. This is some kind of scam. I can't believe Yahoo could serve up ads supporting this, but a Google search for "gbxfunds" will bring up many instances of this particular scam. In my opinion, Yahoo should be responsible for screening out fraud ads like this or held liable when their "customers" are tricked by them.

A couple of general guidelines to NOT getting scammed are:

1) There is no such thing as get rich quick. There is get extremely lucky (win the Powerball, be a dot.comer, etc.) which you have very little chance of doing and then there is the alternative for the rest of us, working hard at it over a long period of time. If someone promises you will get rich quickly, the SCAMDAR should be going off.

2) If there is a guaranteed return much higher than treasury bonds (they are considered to be risk free), be very skeptical. The key here is guaranteed. Risk and return tend to go hand in hand. The higher the risk, the higher the return needs to be to justify an investment. If something is guaranteed it implies no risk so the return by definition ought to be low.

3) If there are outrageous returns promised, stay away. According to his most recent letter to shareholders, Warren Buffett has returned 21.6% annually for his investors from 1965-2006 as measured by the book value of his company Berkshire Hathaway. If the promised returns are significantly higher than this your SCAMDAR should start going off even if the return isn't guaranteed. Either someone is confident they are one of the best investors on the planet or they are taking an inordinate amount of risk to generate their returns. You probably don't want to get involved either way unless you really, really know a lot about what is going on with this particular investment.

So stay skeptical and keep your money!