Investing Myth 3 | The Ponzi Myth | If it’s not a 30% ROI, I’m OUT!
Hi Intelligent Investor,Any returns that is too true to believe should be believed to be UNTRUE... #MMMClick To Tweet
3 Mythical Creatures, M,M, & M #mmm
Have you ever invested in any scheme that promises high returns on investment within a short time?
Show of hands if you invested in #MMM. It’s okay if you dont know the meaning of #MMM.
Some of our friends refer to it as #Moku, #Mogbe and #Modaran.
Mythical three friends who steal kill and destroy money. Heard of them? Haha
These mythical 3 friends gave birth to a child called ‘greed’ And this offspring has caused the loss of more money than through any other medium on earth.
While I have no data to back that, just imagine all the loses incurred in all the Ponzi/Pyramid, High Yield Investment schemes of the world. This child of #Moke, #Mogbe and #Modaran, Mr Greed, is the root cause of all the losses in the financial market and would continue to be. The deeper meaning is covetousness. .
Greed is Good?
Have you watched the classic, Wall Street: Money Never Sleeps ? You should.
Greed is the sum total of all the losses experienced in the art of investing.
The way to qualify losses in the financial market is the 5 letter word GREED
But what scares more is the greed involved in Ponzi Schemes.
The mere fact that someone tells you that 30% on a monthly scale is plausible and you belief, is well, goofy.
But, really we even understand the import of earning 30% monthly on an investment, passively o.
I sleep and wake up and earn 1% per day on whatever money you invest.
#Sleep #Wake #Earn #1% Thats the cycle.
But if most people understand what it means to earn 30% monthly on investment, then we would venture not to try it. #Weeps
The standard excuse for most people who understand the danger of it is that, I can be part of it until it crashes.
Well that’s like taking fuel from a broken down tanker while the engine smokes. You understand it is going to blow up latter, but while the smoke smothers, you say ‘lets have some fuel (fun’);.
The leaking tanker accident always ends in tears, blood and huge losses. Same for Ponzi Schemes.
During the #MMM Tsunami, we did a calculation that should make anyone expecting 30% a month jitter. If you understand it as is presented, this should be a shock. Akin to a sort of tsunami wave in your Investment clock that makes you run for the covers. Come with us.
Simple Interest, Compounded: P*R*T – 10,000*30%*48 months.
At that time, anyone could invest any amount up to 3 million to earn 30% monthly.
Now let’s say we start with a modest 10,000 which is just half of the minimum wage in Nigeria.
And invest this amount while reinvesting all the return every month.
What would we have as a return on investment over a given period?
If you earn 30% on NGN 10,000 every month and compound that return for 48 months.
Simply put, You are made for a looooonnnng time!
Not just you however!
Your spouse. They can wine and dine like nothing else.
Your Children. Irrespective of how many you produce, let them come.
Their children. They might never need to get a job in their lifetime and live lavishly.
Do you know what that amount is…let me #epp ya .
Ready, Set, Shoot. Boom
In words that Is Two Billon, Nine Hundred and Forty Six million, Three Hundred and Twenty Six thousand, Seven Hundred and Sixty Three. In approximation, that is 3 billion Naira.
Most families would not earn 1/10 of that, which is 300 million in a lifetime.
So if you have 9 children who have families, well you would still be comfortable for two generations. Because 3 billion feeds 10 famlies lavishly at 300 million per generation. That is for a 10,000 earning 30% returns compounded monthly for forty-eight months or 4 years.
And that is what the three sisters, #Moke, #Mogbe and #Modaran promised you. And we fell for it.
The thing about High Returns is that they cash on short term greed and long term ignorance of their victims to promise returns that would not RETURN. Yea, gone with the wind.
Sadly, most people unsuspectingly subscribe to this ‘sweet now suffer latter’ syndrome.
However, we can not categorically say that the #MMs of would always return, one way or the other.
Even Mr Newton, the gravity postulator affirmed this when he quipped circa 1700s.
“I can calculate the motion of heavenly bodies, but not the madness of men’.
Rubbing Peter and Paul to pay Pat
Every investment is supposed to be on the basis of sound business fundamentals.
There is is yet to be an investment that yields 30% consistently on a sustainable basis.
Since no one business has such fundamental, what is the underpinning of the Ponzi business?
Simple, Rubbing Peter and Paul to pay Pat.
The schemes play on the ignorance of Peter and Paul to pay Pat.
One’s man’s pain is the other’s gain.
The other name for Ponzi is the Pyramid scheme. The scheme looks like a Pyramid, as more people fill the base, the higher the top of the pyramid goes. And as more people fill the base, the pyramid gets higher. This circle continues as long as there are Peters and Pauls to be robbed. Because more Pats on the Pyramid are waiting to be paid.
And as long as it continues to pay, more Peters and Pauls allow themselves to be robbed. Waiting for the time when they get to be Pat.
Until no more. And then the Pyramid crumbles under the weight of its robbery.
Is it thus safe to say an Investment in a Ponzi scheme is as Illicit morally as Investing in a Robbery Gang or Drug Cartel? #ConscienceThings
Anyone who speaks to your return without telling you the risks you are taking is shooting for your blindside.
30%-monthly-guaranteed? Say Again!
Nah,you don’t want to build wealth like that. Poco a Poco does it. One step at a time.
Mr Charles Ponzi is not a fictional character like the mickey mouse, but a swindler and con artist who started a company called ‘Securities and Exchange Company-SEC’ to promote his scheme. He was the individual who perfected the scheme of ‘unsustainable returns’ for the short term.
Mr Ponzi, who gained notoriety in the 1920s, famously said
“I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me,”
Exactly, that is the hope Ponzis sell to everyone. 2.50 to 1 million in 48 months without the #HardWorkPays part.
Although long gone, his scheme continues to evolve into a more sophisticated tool through technology. Cunning masterminds rub the Peters and Pauls to pay the Pats.
While it is inconceivable that HYIPs-High Yield Investment Programs would stop, what is conceivable is that wise investors can avoid the trappings and lure of an insanely high return. And we believe you are one.
Here, we wrote on the 7 steps to identify a Ponzi return scheme, read and apply.
So the next time someone introduces you to the 3 sisters of greed, MMM, It’s a Trap. Run. Baby run!
I hope you have read this fully convinced, not confused that an Investment in Ponzi schemes yield no RETURNS.
6 min read.