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:
How can i live frugally with a roommate that spend lavishly
Except for expenses that are sometimes shared (like electricity bills and other utilities), I’d recommend that you keep your expenses as separate as possible. That way, your roommate’s lavish lifestyle does not exactly affect you – except the peer pressure part. In that case, you’d need discipline.
This article was a bit helpful though, at least I read some stories similar to my experience. I’m a 400lvl medical student of unn trying to save money for things I know my parents won’t get for me, But here is the thing, we’re comfortable to an extent financially but I don’t get monthly allowances. They just send me money when ever they feel like could be once in 2 months (usually 40k for 2 months)or once in a month or they just give me cash when I’m going back to school. The bottom line is, considering the state of this country these allowances are barely enough for me to be able to save. And I don’t even eat out anymore. I try to cook or maybe just starve (lol) but either way. I just want to know if there is anyone in this same situation and how you went about it or anyone that could help Map out a plan on how to go about saving plus any suggestions on a job I could take on as a medical student considering how stressful and demanding my course is.
T for Thanks ?