I will come straight to the points on the strategies you can follow to safeguard your hard earned money from another investment scam.

1. Avoid hedge funds

These funds have way more leeway in the way they use your hard earned money without any transparency of what's being done with your money. General mutual funds have stricter rules from SEC that they need to follow and disclose everything to the investors but Hedge funds play with different rules.

2. Never fall for guaranteed return

Now a days employers are offering Roth 401K in addition to the tradition 401K and more and more growing number of people are faced with the dilemma of which one to choose.

Well, first let me tell you the difference -

• Funding - Traditional 401K is funded by pre-tax dollars. Roth 401K is funded by after tax dollars.
• Tax - Traditional 401K grows tax free but the tax is levied on the amount taken out during retirement based on the current tax bracket.
  Roth 401K also grows tax free but there is NO tax at the time of taking money out during retirement.
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I am sure many people have heard personal finance experts talking on TV and radio about spending money in your daily morning latte and how by avoiding that expense you can save and become rich. Haven't you heart about that yet?

To all those who haven't heard of "Latte Effect" it is the principle of skip coffee and save money.

Here is how it works - you spend around $3 on latte and around $2 if you need something sweet like toffee almond bar or oatmeal raisin cookie to sweeten your morning and enjoy your latte. Overall you spend $5 every morning 5 days a week in a coffee shop.