Canadians who are a bit leery of the Toronto Stock Exchange right now may be tempted to search for business opportunities online or in their favourite newspaper.

"I could never go to bed without searching the business opportunities page," says one investor, who we'll call James Thompson. "I was managing, but I haven't got big time money. I had the bread, but I didn't have the butter and I was always a bit of an entrepreneur. Where someone else says "I'll buy a new car,' I say "I can put the money out at 10 or 12 percent'."

Mr. Thompson, 69, who felt self-reliant financially and could never see the need for an RRSP, says Canada Pension Plan payments do not go very far. He relies on small business investments to supplement a mediocre working wage, increase capital and create income.

After decades of mortgage investing, Mr. Thompson's only losses occurred when the borrower of a $10,000 second mortgage went bankrupt and a person he loaned $4,000 died unexpectedly. In both cases, recouping his investment would have risked more than the principal so he took the capital loss.

Then, after years of investing, a big deal went sour. >[? "It was a lot to me and it took me a long time to get it together," said Mr. Thompson, explaining how he earned the money that he invests. "I dabbled in the real estate market in the eighties and nineties. I did very well in the beginning and I kept going...I put the money into residential second mortgages and IOUs or promissory notes, mostly on properties, for amounts from $5,000 to $20,000."

That is until he was hooked by a business-opportunities advertisement in a major Canadian newspaper: "Invest just $30,000 in a retail business and receive regular returns of about $2,000 per month. The original investment can be withdrawn anytime."

Mr. Thompson turned over the money and received a promissory note outlining the terms. When the first payment was due, no cheque arrived.

Collecting the first payment took months. Enlisting the aid of financial advisers delayed recovery as they too were won over by the individual's reassurances. Now, more than fifteen months later, there has been nothing but promises and a recent token payment.

Everyone loves to think about yields and returns when they invest, but few face the possibility of significant loss when they commit their money. Mr. Thompson is an experienced hand at investing and admits he forgot some of his own rules on this deal.

"I was the go-getter," said Mr. Thompson, who was widowed over fifteen years ago. "I was always the risk taker. I don't want to let this go down the drain. I'm just a little working joe with a little house. But I didn't ask enough questions. My bank did not want me to release that cheque -- I wouldn't listen."

To avoid a similar problem, an Ontario Regional Police spokesperson suggested people contact their local fraud office when they are presented with an investment opportunity and before they sign up or hand over any money. Although the police cannot give financial advice, they can tell you if there have been complaints against the individuals or companies involved and whether the investment has elements of a fraudulent nature. Here are a few more tips:

• Be cautious going in. Even if the police lay fraud charges to resolve the situation that may not get your money back.

• Document everything in case a law suit is necessary to recover your money.

• Act quickly if something goes wrong. Respond immediately by phone and in writing to collect outstanding payments. If you don't get your money within a few weeks, contact the police.

• Keep all aspects of an investment transaction in one jurisdiction to simplify legal proceedings if the deal goes sour.

Mr. Thompson's final advice: "This was nothing to do with 'business opportunities,' I am saying I was stupid. Now, if someone asks me to invest, I'll ask for everything -- he'd have to tell me what he had for breakfast."

For more articles by P.J. Wade, please press here.

Published: October 9, 2001

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Futurist and Strategist PJ Wade is "The Catalyst" -- intent on "Challenging The Best Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 7 books and more than 1600 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy... Your Choice! (CatapultPublishing.com), which is filled with suggestions and insight on protecting and using home equity. Her new business book, "What's Your Point?," which identifies 7 common mistakes professionals unknowingly repeat to their detriment, will be published in 2009. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more on blogs, books and topics, visit TheCatalyst.com.