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.
Ever wondered if we are legit? Read this article:
Good evening, can I get an explicit illustration of how much to invest, how much is the interest rate and for how many days or duration to earn such interest.
Thank you in anticipation of your response.
Ibrahim Muhammad T.
Hi Ibrahim,
You can invest any amount.
Mutual Funds work differently depending on the type you invest in, we have them categorized by risk level.
Please find out more here – http://cowrywise.com/mutual-funds
With conservative mutual funds, you earn based on annual interest. While with the other fund categories – moderate and aggressive – you earn based on capital gains.
There are no fixed interest rates as they change daily, depending on the performance of the market.
We advise you to invest for the long-term so that your investments can yield above-average returns over time.
I don’t recommend any one to invest in any mutual funds on Cowrywise because the interest rate is not even up to 1% it is extremely low. I invested 10000 naira and am getting 1naira everyday as ROI, So after 30days my total ROI would 30naira
is still better than keeping your money in the bank or how much do you think bank will give you?, this is not a quick rich scheme.
Hi Wilfred,
Thank you for your comment. However, this is inaccurate information.
Some funds were performing lower than usual due to market performance, however, not all funds were performing at 1%.
Some were much higher and please remember that we always advise thinking in the long-term.
Mutual Funds work differently depending on the type you invest in, we have them categorized by risk level.
If it’s a conservative fund, you earn based on interest. Interest rates for conservative funds are not fixed, it changes daily.
The other fund categories: moderate and aggressive earn based on capital gains which also changes daily.
This means that performance can be low today and high tomorrow.
If you’re investing for the long-term, more often than not, your investments will yield above-average returns despite the highs and lows of the market.
Good evening, please I need details of how I can invest and what is the interest rate. Also the duration of the investment.