How to Identify and Avoid Being a Victim of Ponzi Schemes

A popular saying goes that, ‘if it quacks like a duck, walks like a duck and squirms like a duck, then it most probably is a duck.

This can be applied to the majority of fraud schemes being run in the country today. Most of the apostles of these schemes take a lot of effort and time to explain that their schemes are not ponzis or pyramids.

However, when you listen carefully to what they say it describes a classic Ponzi scheme.  They always labor to make a distinction between what they do and the schemes that come before them.

All this is meant to build confidence in the audience and target victims.

The rate of returns usually promised by these schemes always raises suspicion. It’s always an absurd figure upwards of 50% in less than a week. Any seasoned investor will tell you that a good return on investment is in the region of 20% per annum on fixed assets such as real estate.

Early adopters are always the focus of the sales pitch. The proprietors will parade people that they claim joined early and are a testament to the benefits. Most of these early adopters are part of the scheme and the few that are not, are the thrill seekers who have made it only because they got there before the rest. They are simply lucky. No one wants to play a game of luck with their hard-earned money. Whereas it is possible to be one of the lucky few, it’s no different from winning the lottery. And yes, playing the lottery is gambling and can not be considered an investment strategy.

Ponzi schemes are rigged and the house will always win. The script follows the same steps with the companies closing shop and the founders running away with investors’ money.

What to look out for

Invest in fully licensed and registered businesses with physical offices. This helps to have the means to track their activities and have a fallback plan in case things go wrong.Investment in such unsecured ventures should follow the same rules as gambling. Do not invest more than you can afford to lose. Do not use your savings, rent, school fees, and such in quest of a quick return.

Lastly, get in touch with us whenever you have information on a scheme that appears to be a Ponzi. We shall investigate and give you feedback on the subject.

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