Shine Your Eyes- How to Identify fraud investment schemes.

Here’s a universal truth, everyone wants to make more money.  An important question is, how you are making money, and how much. Is it by investing in MMM schemes or entrusting your money to those whose experience you can’t guarantee? Whatever it is, I have a message for you here.

At the heart of the MMM “pandemic” across Nigeria, so many assumed they were investing in a legit opportunity. Unbeknownst to them, it was a pyramid scheme.

If you ask questions about what MMM does or how they operate, you are most likely going to get, “They are paying, them they pay, and it is very sure”.  

James Jean-Pierre said that “the promise of easy money is but a wolf’s trap laid out for sheep seeking taller grass.” Last year Nigerians fell for Forex and Ponzi schemes such as Tradera and MBA Forex; it was brutal. These investment companies operate with the same Modus operandi. You can grow your money without using much of your time. But the real question remains, is there an assurance that you won’t get scammed?

Defining Ponzi Schemes?

Ponzi schemes occur when fraudsters entice individuals with the promise of unreasonably high returns. Once the first few investments are made, later investors are drawn to invest for two reasons; reported gains and high payouts to earlier investors. 

In the long run, the conman either disappears with the remaining money, or the scheme collapses on itself.  

How do you identify Scam Investments? 

We all want our money to grow, but as we do that it is important to be careful in choosing reliable investment options. For newbie investors, it’s important to know how to identify investment scams: 

Avoid returns that are too good to be true  

Let’s think of an example; we’ll call him Jide. He was promised 20% returns on his investment monthly. The investment company told him that the investment return is definite and fixed and he has nothing to worry about. At the end of the day, Jide found out that this was untrue. When it was time to pay out, Jide was told the company had made losses and they won’t be able to pay him.

It is impossible to gain a return on investments within a short period. And if it promises you a ridiculous amount as investment return, it is definitely a scam. Run.

They promise a consistent flow of returns, regardless of market conditions. 

The Investment company told Jide he does not have to worry about risks. And the happenings of the market do not determine the outcome of his investments. This is not true, and you need to gather information on how the investment opportunity factors into the industry it caters to. If you cannot get clarity from the investment provider that is a clear sign that it is time to walk away.  

When the conversation is about the returns you stand to gain from the investment. You need to start asking about where those returns are coming from. Money can not manifest from a charismatic speech. Do some research on the topic of investment and find out whether it is a workable market. 

Investment involves risks. if they promise you returns that are risk-free, you call it what it is – a scam.  

Do Your Due Diligence – They are paying is not due diligence!

Before investing your money, make research on the company you’re investing in. if the investment company that you’re dealing with can’t be found online, there’s a great chance that it’s a scam. 

You need to do your homework and understand the company’s fundamentals. In other words, insist on performing routine due diligence even if it seems boring because there are no shortcuts.  

When I asked Jide about the due diligence he conducted, he replied with: They sent me screenshots of payments.

Can’t explain it?  Don’t put your money in it. 

Don’t invest in investment companies that are complex to explain. if you can’t explain what they are investing in, or how they are investing, don’t put your money in it. 

Jide told me that the company he invested in deals with Forex and Real estates, but he said he does not understand how they go about it. All he sees are screenshots of graphs; I asked him if he understands Forex trading, he said he doesn’t.  

Keep this in mind? 

We all want to make more money, and an opportunity to invest in something lucrative sounds great. Yet, we need to investigate any investment opportunities very carefully.

Most importantly, learn from the words of Jennifer, if it smells, talks, and walks like a scam, it is a scam.

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