My Thoughts About Ponzi Schemes

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A Ponzi scheme, according to Wikipedia, is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.

Wikipedia further adds that Ponzi schemes occasionally begin as legitimate businesses, until the business fails to achieve the returns expected. The business becomes a Ponzi scheme if it then continues under fraudulent terms. Whatever the initial situation, the perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme. 

Very few people who subscribe to Ponzi schemes are aware of this vital information. The consequence has been, and will continue to be loss of hard-earned cash, frustration and in extreme cases, death resulting from health issues arising from the loss of huge sums of hard-earned money.

The rising number of these schemes and other get-rich-quick-quick schemes, locally and internationally, has been a thing of concern. Once obvious reason for this is the very high rate of acceptance. Some of them are probably registered, while some are simply out to defraud unsuspecting and vulnerable members of the public.

One cool feature common to all of these schemes is the huge, and sometimes, mind-blowing returns often promised. As expected, a number of people have found it very hard to resist these offers.

This post was prompted by what I witnessed over the weekend in a gathering. The common discussion there was all sorts of Ponzi schemes.  I seemed to have been one of the odd one out as I had nothing to offer to the discussion. As one of those who lost a lot of money in the “wonder bank” days in Nigeria, I had to ask one of them what he knew about the schemes he had subscribed to. Shockingly, he said he was only interested in the expected returns 🙂 Quite frankly, he is not alone in this position.

Having been convinced that a lot of people often allow financial gains to reduce wisdom and sound reasoning to insignificance, I would like to ask those who have subscribed to any of the Ponzi schemes, or planning to, a few questions:

1.   Do you know that you cannot recover your lost funds from illegal transactions? Can you even report it?
2.   Does the operators have any physical office you can reach out to?
3.   How long have they been in operation?
4.   How reasonable or feasible is the promised returns?
5.   How reasonable is the recoup period?
6.   How well do you know the operators? Do you know them at all?
7.   Any idea about the financial status of the operators in case things go wrong?
8.   How many testimonies do you know of about the scheme and/or their operators?
9.   How long do you think their “sweet” promises will last?
10. Is there no secured alternative for you?

So, ask questions and get answers. Be wise and cautious. Exercise restraint in your rush to make fast money. All that glitters is not gold. Remember that people you know can defraud you, how much more those you don’t know. The number of scammers and fraudsters has increased tremendously. They are always heartless people and always appear like nice and caring guys who want to help you make money. So, be cautious  to be able to separate the good guys/schemes from the bad ones.

Also read this (click topics):  Things I would Not Advice Facebook Users To Do On Facebook
nd this
Why You Should Be Cautious With The Social Media

Thanks for sharing in my thoughts 🙂

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Michael M.

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2 thoughts on “My Thoughts About Ponzi Schemes

  • March 5, 2017 at 1:36 pm

    No rationale thinking person should be associated with any Ponzi scheme. But to my greatest surprise and disappointment a lot of the so called pastors and ‘senior’ Christians not only participate they also tend to recruit their members into the schemes. It’s all about greed andthe love of money the Bible condemned.

    • March 7, 2017 at 7:14 am

      Hmnnn. Some people will push every thing aside just to get money at all cost. When people who know better are now championing these practices, they will certainly give you “good” reasons for their actions. Even though everyone is free to make money as they so desire, contributing to the already-saturated “fraud market” is not good for anyone.

      Thanks for visiting and sharing your thoughts sir.


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