Ponzi schemes and you!

A local-born Ponzi scheme, giving 20% monthly returns, found to be fraudulent. As is always with these schemes, they are unsustainable – how can any business give a return of 20% per month? That is 240% per year, what is the Ponzi scheme’s source of income that they are able to give these kinds of returns to their investors? There is no investment vehicles that anyone with a sound and proper mind can think of that is giving such returns per annum, well other than gambling at the casino and Ponzi schemes that is.

Tuk Berlagak, JJPTR, SwissCash, LampeBerger, yada-yada-yada etc. you’ve heard of them all, and they all go bust after a few years operating. If any of you have joined or plan to join these schemes please let me know, allow me to give you a sound lecture about how these schemes are fraudulent and that you are bound to lose your “investments”. The “investors’ ” level of education don’t matter, they consist of SPM-leavers, degree holders, PhD holders as well as other professionals – and they we all cheated of their cash. Some of them even take up personal loans (at a rate of 8-12% a year) just to invest in these schemes. On paper it looks like a good plan, but were they able to cash-in on the Ponzi scheme returns? In general, for most of the “investors”, the short answer was a resounding “NO!”

If it is too good to be true, it probably is

The scheme designers love pointing out to the educated investors and claim that “Even people smarter than you are investing, who are you to say that this is fraudulent?” Well, what about the fact that many of these so-called “educated” people were cheated over and over again in the past-and-bust Ponzi schemes? They may be experts in their field (medicine, accounts, architecture, engineers, etc.), but they certainly aren’t experts in basic personal financial planning – for reasons no other than the fact that they were blinded by the promise of quick wealth.

What is the point in patiently investing in properties, stocks, unit trusts that give at most 20% annual returns, when you can get 20% a month from these Ponzi schemes? Hint: These Ponzi schemes are NOT sustainable, and the founders are bound to quit halfway with your cash in hand (as an investor, to receive further returns, you are not allowed to cash-out. So while you may earn your gains on paper, but the actual money is still with the Ponzi founders).

Wake up, people, wealth-accumulation isn’t easy, those who say that it is, is probably trying to sell you snake-oil or in this case, Ponzi schemes.

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