How to Spot a Ponzi Scheme Easily

How to Spot a Ponzi Scheme Easily

Last week I received two calls from a lady and a guy introducing me to platforms that I can invest and double my money online.

The guy briefed me about mmmcorporation, a platform that gives you 40% plus your initial investment in a period of a month. He went ahead to tell me that the platform is just 3 months old😋, and a lot of people had become millions just by investing in the platform. Quite interesting right, I will tell you more about it later in the post when we analyse ways to Spot scams.

The lady on the other hand introduced me to Loom, a WhatsApp investment platform that distribute money in a circle of new and existing investors. According to her, Loom pays 8 times your initial investment, she even showed me the screenshot of a participant bank account.

Fascinating right, let’s now dive deeper into Ponzi scheme and scam and how you can protect yourself.

What’s a Ponzi Scheme?

A Ponzi scheme is a type of scam in which old investors are paid with new investors money. The circle will continue like that untill there are few or no new investor to pay the old investors.

What’s a Scam?

A scam is a fraudulent scheme. It can come in various ways and approach. And it always look so good to be true until victims loose their hard earn money. So how do you know whether a deal is a scam or not? That’s what I’m about to share with you in this post.

How to Spot Ponzi Scheme and Scam

1. No business model

Most ponzi schemes or scams have no real or viable business model. A business model is simply the way a company or business makes it’s money 💰 eg commission, profit, provision of service, tax, subscription service, ads sales etc. Chances are that if a business doesn’t have any of the above model, then it’s a Ponzi scheme.

READ  How to Spot a PONZI Scheme

2. You’re just a participant

Most Ponzi schemes have members and not investors. If you suddenly realise that you don’t partake in the decision making of a business other than to refer new members and go to the bank to transfer money, chances are that you’re pertaking in a Ponzi scheme.

3. You’re only told the positive side of it.

All investment have its good and bad side. So if you’re only been told about the Pros of an investment, chances are that it’s a Ponzi scheme. Investors look at the history, track record, and statistic in other to validate a good investment. Never be cajoled by screenshot of bank statement or sweet mouth.

4. You don’t have any control

This an expansion of the second point. When investors buy stocks they can either decide to sell at a profit or loss. When they buy real estate, they can either sell at a profit or loss. But when you buy an invest that you don’t have any control off, other than be at the mercy of the platforms website, chances are that you’re pertaking in a Ponzi scheme.

5. You must recruit new members

Good investment produce yield whether you recruite new members it not. If it doesn’t, it is most likely to be a Pyramid scheme, which is another type of scam, and also similar to Ponzi scheme.

6. It’s a new company

Ponzi schemes have a very short lifespan. Most of the founders usually find a way to create another platform or website within few months that the previous one collapsed. So if someone is pitching an investment in a platform that’s barely 1 years old, do not invest in such platform.

READ  How to Spot a PONZI Scheme

That’s my short list of ways to Identify a Ponzi scheme, and I hope you’ve learnt something new.

Don’t hesitate to share with me your experience and thought about Ponzi scheme using the comment box below👇.

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