PONZI SCHEME; A COOL SWEETENER WITH CHRONIC DIABETES

At a time, I realized how bad it was was for us not to be well informed. Most times we are informed but out of Ignorance we refused to utilize our information. For the past two years a lot of African countries have lost fortune to the well arranged programs of Ponzi Schemes. (Robbing peter to pay Paul). At the end of the day both peter and Paul would be robbed.

The Advent of Ponzi Scheme in Nigeria has made some people rich and successful, it has made so people make exploits, it has made some experience the other side of wealth and riches and it has sent some people to the early graves. they lost everything they had and the only the only thing they could do was to commit suicide to end there miserable life.

The journey of recovery from pyramids and ponzi schemes in countries like Nigeria, South Africa, Zimbabue, Ghana etc has not really been easy, some are yet to balance, some have moved on while some still wish they never started and some just brought an end to it. The question remains that despite all the news we heard, despite the warnings, even after clearly been stated that you could lose your funds, yet why do we still go for it? why do we still invest heavily? what is always the end result? The owner of the Scheme at the beginning would be labeled an hero but at the climax we would realize the person is worst than a beast.

The introduction of some scheme in Nigeria if I begin to mention would ring a bell and open up some healed injury or some yet to recover. I am not trying to do this, I just want us to learn from our mistakes, i still hear some people saying if this programs that ruined us comes back, they would still do it. I will start listing the names of the Ponzi schemes in Nigeria that we all could never forget.

The first was the Introduction of MMM Nigeria. it was brought into our Country November 2016 by a set of four people know as Andrew, chuddy, Joshua and Patrick. The rest include, Get help worldwide, MMM UNITED, MMM FSTP, Loopers club, NNN Nigeria, Twinkas, I charity, Bitconnect and so many other ones.
I am a victim of most of all this listed schemes. At the beginning everything was going on fine, the money was there, I started my journey, I paid out and i received. I defended most of this programs with all my life. I remembered how I resigned because i thought MMM had come to stay despite all the news that I heard. A minuet silence to my friend who committed suicide because he invested his boss money going up to 5 million Naira.

I was never a guilder but a participant with over 100 down lines, I hated myself for bringing most people in. I would like to share my story with you about how i lost close to 15 million naira in ponzi schemes and how I wished I had just kept my money as bitcoin. Today I bet I would be living a good life.
I first came accross bitcoin in year 2014. I thought it was the normal Nigerian yahoo boys scheme, if I had know then, i would have bought more than enough. Not until late 2015 after so much conviction I bought up to 20 bitcoin as at fifty thousand naira then. With the exception of making more profit. I made a mistake of not understanding the potential of what I was going into after a while, i forgot i invested into bitcoin until November 2015 when I was introduced to MMM Nigeria which I lost a total of 8 million Naira to the scheme as at December 2016 (this is my real capital after subtracting my bonus). After this loss, I remembered I had some bitcoin which had given me some profits but as at then the price of bitcoin was coming down because of the Chinese news that i heard but because i was not well informed and I was afraid I would lose the money again. I was mislead by a friend and asked me to invest my $20000 into MPCA (my paying crypto ads) not knowing it was a ponzi scheme in disguise. I lost everything in it as at march 2017.

As if that was not enough, I sold some of my properties and I was again mislead and introduced to bitconnect, I invested $3500 which just went down and collapsed despite people called it the future of bitcoin. They said it could hit bitcoin price and I never new it was a manipulated coin with the aim of scamming people. I thought it was the end of life. I felt like committing suicide, I thought I have lost everything and I can't get to recover again. This was my journey so far, I thank God i am still alive today, thought it was never easy, i had friends who has taken there lives over this issue. A still remember my facebook friend who invested his wedding money as at December 1 2016.

if you were able to make it from Ponzi, consider yourself lucky....... you were not smart, a lot of us lost because we lacked proper understanding of what we were doing, this people comes and promise us exorbitant interest rate and we never asked ourselves where did this money comes from? what are we buying? what are we selling? who paid who? and who received the first set of payments? Most blames their sponsors, guilders, but the fact remains that this people are mere victims just like you that was used ignorantly to scam you. I remember the most treasured bit connect that reached the height of $470/coin today is less than $2. even though who did not participate in the lending also lost by buying the coin. the only lucky fellows were those who bought the ICO. Dont blame the scammers because they never forced you but blame yourself for trusting the bad guys.

What is a ponzi?

A ponzi is a fraudulent investment operation where the operator provides fabricated reports and generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading. Operators of Ponzi schemes can be either individuals or corporations, and grab the attention of new investors by offering short-term returns that are either abnormally high or unusually consistent. Companies that engage in Ponzi schemes focus all of their energy into attracting new clients to make investments. Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors. When this flow runs out, the scheme falls apart.
The basic premise of a Ponzi scheme is "To rob Peter to pay Paul". Typically, Ponzi schemes require an initial investment and promise well-above-average returns. They use vague verbal guises such as "hedge futures trading", "high-yield investment programs", or "offshore investment" to describe their income strategy. It is common for the operator to take advantage of a lack of investor knowledge or competence, or sometimes claim to use a proprietary, secret investment strategy in order to avoid giving information about the scheme.

Initially, the operator will pay high returns to attract investors and entice current investors to invest more money. When other investors begin to participate, a cascade effect begins. The "return" to the initial investors is paid by the investments of new participants, rather than from profits of the product. Often, high returns encourage investors to leave their money within the scheme, so the operator does not actually have to pay very much to investors. The operator will simply send statements showing how much they have earned, which maintains the deception that the scheme is an investment with high returns. Investors within a Ponzi scheme may even face difficulties when trying to get their money out of the investment. Operators also try to minimize withdrawals by offering new plans to investors where money cannot be withdrawn for a certain period of time in exchange for higher returns. The operator sees new cash flows as investors cannot transfer money. If a few investors do wish to withdraw their money in accordance with the terms allowed, their requests are usually promptly processed, which gives the illusion to all other investors that the fund is solvent, or financially sound. Ponzi schemes sometimes commence operations as legitimate investment vehicles, such as hedge funds. Hedge funds can easily degenerate into a Ponzi-type scheme if they unexpectedly lose money or fail to legitimately earn the returns expected. If the operators fabricate false returns or produce fraudulent audit reports instead of admitting their failure to meet expectations, the operation is then considered a Ponzi scheme.

1. If a Ponzi scheme is not stopped by authorities, it usually falls apart quickly for one of the following reasons:

2. The operator vanishes, taking all the remaining investment money.

3. Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the operator starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.

4. External market forces, such as a sharp decline in the economy may cause many investors to withdraw part or all of their funds.

why do we invest into ponzi scheme

1. We Want Easy Money
   I don’t care what you say, everyone wants easy money. Hell, I would love it. Unfortunately, that is just not the reality. Yes, I want easy money, but I know that that doesn’t really exist. It is the same thing as that money tree I have been trying to plant in my backyard. Something grows, but it surely doesn’t have money on it. Easy money is a concept that has a lot of followers, but very few executors. Only a small handful of people actually know how to make easy money and most of the time it is illegal in nature. The Ponzi scheme really is built off of the easy money principle. Ones that are running a Ponzi scheme tend to look for those that want to make fast money. Ones that don’t want to work hard for their money. These are the people that are fuel for the Ponzi scheme fire. With the huge funds that Ponzi schemes bring in, we can see that there are still many people that just want to make easy money.

2. it is Too Good To Be True
   I am almost certain you have heard the saying, “If It is too good to be true, it probably is.”, so why do we keep pushing for the false hopes. I tell everyone to go for their dreams, but there is a difference between a dream and a false sense of reality. I have spoken with many people in the past that know the old saying, yet they either choose not to follow it or think it is bogus. It is a simple, yet power saying that we tend to use when we hear something that peaks our interest. I have used this saying numerous times in my life and it has never failed me. If someone was going to offer your stock market returns in the 20% range, would you jump on the opportunity? I know I wouldn’t. These type of returns in the stock market are unrealistic. People should not expect to see 20%+ returns if they are investing in the market. The average is around 8%. People get sucked into Ponzi schemes because they love to hear the pitch. Most people that fall for Ponzi schemes just hear the number and then start to salivate. I love making money and I love when it comes easier than others, but I am also someone that understands reality.

3. We Love Returns we dont work for
   As a beginner investor, I can say that I enjoy when I get returns. The higher the better for me and I am sure that everyone is like that. We stick to the general investment advice and keep on keeping on. I am not one that wants to go out and find some great penny stocks or get stuck in a terrible stock that doesn’t gain. When we see that return percentage that is on the high side, we get excited. We all want to make money quickly and investing can be a way to do it . If someone tells us that we can have the chance to make a great return with almost no effort, we jump at the chance. Returns get our investment mojo going!

The six ways to avoid a ponzi scheme

1. Be Skeptical
   If someone tries to sell you on an investment that has huge and/or immediate returns for little or no risk, it could well involve some sort of fraud. For example, Bernie Madoff provided investors with consistent return of 1-1.5% per month for 10 years before everything fell apart. Be extra-cautious if the returns are being generated by something you never heard of or in a way that's impossible to follow.

2. Be Suspicious of Unsolicited Offers
   Someone contacting you unexpectedly, perhaps inviting you to an investment seminar, is often a red flag. Investment scams often target elderly people, or those close to or in retirement. They target countries with Financial difficulties etc.

3. Check Out the Seller
   Research a broker, financial advisor, brokerage company and investment advisor firm using the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck. Verify that the professional is licensed and look for any negative information. BrokerCheck’s files on Bernie Madoff and Herbert Ivan Kay both offer examples of what negative reports look like.

4. Verify the Investment Is Registered
   Ponzi schemes often involve unregistered investments, says the Securities and Exchange Commission (SEC). Start by asking the person offering the investment: If the investment isn’t registered, ask why (not all investments must be registered). If you’re told it is, verify by following the advice FINRA provides for checking the Securities and Exchange Commission's EDGAR database, your state securities regulator and FINRA’s market data.

5. Understand That Investment
   Never put money into an investment you don’t fully understand. There are many online resources to help you learn how to invest and how to evaluate opportunities for risk and potential gain, including here at Investopedia. Don't write a check to – or open an account with – anyone who won’t fully answer your questions or who tries to discourage questions by saying the investment is using secret, proprietary or too-complex-for-laymen strategies.

6. Report Wrongdoing
   If you think an investment is a Ponzi scheme or any other type of scam, or you’ve been victimized, file a complaint with the Securities and Exchange Commission, FINRA and your state securities regulator (here's a North American Securities Administrators Association list). One sign that you’ve put your money into a Ponzi scheme is that you’re unable to obtain promised payments or cash out. Some scammers offer investors even higher returns to discourage them from departing, says the SEC.

The Bottom Line
It’s vital that you know whom you are dealing with and that you understand any investment before handing over your money. Be doubly careful if someone contacts you unsolicited about an investment. If anything seems off to you, report it to the authorities and let them figure it whether it’s legitimate or not.

thanks for reading...