For many of us, the pull and pool of wealth is one that keeps beckoning to us. With the number of expenses to attend to, a majority of people are looking for the next opportunity to make it big financially. One major scheme that has lured people in with the promise of getting rich quickly is the infamous Ponzi scheme.
Are Ponzi Schemes the Same as Bubbles?
It is quite common for people to conflate bubbles and Ponzi schemes, but they are significantly different. Though some might argue that there are traces of fraudulent activities in some bubbles, it doesn’t change the fact that they were all driven by legitimate investments with the ability to earn returns.
On the other hand, Ponzi schemes, named after Charles Ponzi, the first person to set up a Ponzi scheme (1920), are fraudulent investments. Money put into Ponzi schemes is not actually invested to earn returns, and investors are promised absurd returns that are paid from the money of other investors. You should check out this article on tips for validating investment options.
Why Do People Fall for Ponzi Schemes?
Despite the illegitimacy of these schemes, it is not surprising that people still fall for these schemes. For one, the thought of gaining higher returns on any amount of money is one that very often excites everyone. For most people, the general rule of investment is the higher the interest, the better the investment.
Another prominent reason why we fall for Ponzi schemes is the promise of easy money. Who doesn’t like easy money? We guessed as much. Most victims of these schemes are lured in with the promise of making easy and quick money even from the comfort of your home. The idea of money growing right there in your bedroom is the major principle on which Ponzi schemes build on.
Perhaps, the major reason why people continue to fall for Ponzi schemes in their different forms is because of the wrong philosophy that money attracts success. As long as people keep holding on to this faulty mindset, we will continue to chase money by any means as opposed to investing in self-development in order to offer a value that attracts money.
What do we Suggest?
Given the evident human flaws that make everyone susceptible to investing in such schemes, how can you avoid falling prey? We have two workable tips for you:
1. Create/Join an Accountability Circle
It is easy to make a promise to yourself today and find yourself breaking it tomorrow. You are human and it’s just natural for such things to happen, that is why we all need to set up check mechanisms. One way to check your investment choices is to set up a Circle with goal-driven friends that are opposed to Ponzi schemes or other forms of illegitimate investments. Work closely with them on tracking your goals and investing together in proven investment choices. To help, you can set up an investment circle with Cowrywise.
2. Automate Your Investments
“Out of sight out of mind”, this common saying holds true a lot of times and still does with keeping your cash away from fraudulent investments. If you cultivate the habit of investing a part of your funds on a regular basis, combined with the help of your Circle, you’ll hardly ever have any spare cash to risk in unverifiable schemes similar to MMM, Loom to mention a few. Automate your investments today with the Cowrywise app.
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Great initiative to address this important issue.
Thanks for addressing this issue. I have always wondered how you it works.
It makes sense also request for death proof from d next of kin before any transaction
I have a case just like this but my brother is the next of kin and he was told to visit the ministry of Justice for a letter of approval which he did,, they told him the letter will be ready within 2month after spending some amount of money to my surprise it was more than 6month and just this Monday letter was taken to bank.
Bank also are saying we should come back later for a review that we should keep checking
I like this ideas
This is a good piece of information.
Thanks for the information, can I state both my adult children as next of kin because I have been told that using one could cause a rift
Sure you can.
Very detailed and explanatory. Thanks.
Yes my name is chiamaka i have a case like this my dad use as next of kin to process his dividend to the one of the nigerian bank but now he died on august last year and we buried him three months ago as a next of kin i dont no the required document i will use to go and present to the bank to claim his money he did not write any will only next of kin he uses thanks
My mum is my dad’s next of kin, he died few months ago as a polygamist he has no will what do we do.
Quite good, love that and will update mind, nice ? being part of Cowrywise.
Great!
I have a case just like this but my brother is the next of kin and he was told to visit the ministry of Justice for a letter of approval which he did,, they told him the letter will be ready within 2month after spending some amount of money to my surprise it was more than 6month and just this Monday letter was taken to bank.
Bank also are saying we should come back later for a review that we should keep checking
I would have loved to used my mom as the next of kin but she doesn’t like using Android phone thus she didn’t have any email address,, I don’t really trust my immediate younger sister that much so I used my second younger sister I just hope it wouldn’t cause any hatred towards each other
Thanks for taking the time to explain this . Great ?