How do you know if you’re ready to start investing? Here’s a thought experiment to see if you have the right mindset.

Imagine you’re at a conference and you happen to sit next to the former chairman of the Nasdaq.

He proposes an investment opportunity to you with guaranteed returns of somewhere between 13% to 20%. Would you get in?

If you do, then you’re doing something “natural.” Many people base their decisions on credentials. Well, that guy was Bernie Madoff, and he made that offer to many smart investors. He had all the credentials: