“I’m very financially stressed now. Last year I really wanted to change both my job and my lifestyle, so I put money in three high-interest investments. I calculated that the returns would be enough to pay my bills and give me extra money to start my own business. However, these investments have stopped paying interest for awhile and I don’t know how I’m going to survive.”

There’s a wave of worry and depression that’s affecting many investors today. Everywhere you go – your salon, your church, your office, or your gym – you can share in sorrowful stories of lost riches and ruined finances.

And just when you think you’ve heard it all, someone comes by with an even more devastating tale of great wealth that has disappeared in an instant.

In recent years, Jamaica has been a haven for high-yielding ‘alternative’ investments. Persons who previously had to settle for less than five per cent annual interest on foreign currency bank accounts, were thrilled at the chance to jump on the ten-per-cent-per-month train.

Finally, it seemed that average investors would be able to make their money work hard for them, so that they could quickly achieve their financial dreams.

By late 2007, it was obvious that all was not well with the high-yielding options. One by one, with the ripple effect of a line of dominos falling down, the alternatives started having difficulties paying returns on time, while others disappeared off the radar completely. Regulatory pressures, bad trades and cash crunches created by desperate investors, were some of the reasons given for the fall in the once-lucrative schemes.

There are many condemnations and I-told-you-so’s going around right now, as the naysayers smugly point out the errors of investing the alternative way. In reality, all forms of investment come with risks.

Whether you were desperately seeking a way to make ends meet, trying to find a new source of income so that you could fire your boss, or just genuinely hoping for a miracle, the cardinal rule of investing is that you should never put up more than you can afford to lose.

My first big investment loss didn’t occur in the shadowy realm of the Unregulated Financial Organisations (UFOs as they are now called). It actually took place in the highly regulated Jamaican stock market, and with a stock that was being touted as a ‘buy’ by the experts. Four years later I still vividly remember the loss, but it wasn’t hard to recover as I didn’t over extend myself with that investment.

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If you’re facing a shortfall in your income or the decline of your net worth at this time, it really isn’t helpful to prolong the discussion of the financial folly of letting all your chips continue to ride at the roulette table. Let’s instead try to look for solutions that can help you to get through these financially challenging times:

1.   Be prepared to accept the possible loss of your investment.

While you shouldn’t give up all hope, the reality is that you might never see your money again. Most people knew that placing money in some of these schemes was very risky – the Financial Services Commission (FSC) certainly didn’t let us forget! When you take a gamble you should be willing to live with both the good and bad results.

2. If you took out a loan, find another source to pay down your debt.

If you’re facing repossession of your assets by the bank because you depended on the alternative income to make payments, you can’t wait in hope for these stalled schemes to re-start. You have to find some other source of income to pay your loan. If you have no hope of getting back your investment, and if the income can’t be found, you may just have to sell your property.

3.   Look for other methods to save towards your goals.

What if the high-yielding schemes had never existed? Would you have given up all hope of buying your own home or going back to college? Other persons, many just like you, have created wealth and achieved their dreams by using the time-proven methods of spending less and saving more, or by working hard and consistently in a business of their own.

4.   Don’t try to regain lost money by jumping into other risky investments.

Don’t throw caution to the wind in a desperate attempt to re-coup your losses. Gamblers on a losing streak think that if they keep going, they’ll eventually win back what they lost. Unfortunately, they tend to lose it all. When evaluating any new investment, ensure that you understand the risks involved and that you are financially capable of taking them. Ask a trusted financial advisor to help you to make the right decisions.