SEC-S17W3: Let's talk about Ponzi scheme

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Greetings to you all and welcome to my Engagement Challenge entry for the theme of this week's from this amiable community were we get to talk about a very popular topic, Ponzi.

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Have you ever heard about Ponzi schemes?

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Who hasn't heard of the popular means of theft called Ponzi? Yes, I have. Ponzi schemes are types of scam where people are tricked into investing money because they are promised really high returns.

But then instead of actually investing the money given to them, they use the money from new investors to pay off the older ones or worse eat it. Therefore, when there are not enough new investors, the whole thing collapses and people lose their money.

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Have you been offered to invest in any of these schemes?

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I have been offered a lot of investments in such Ponzi schemes, but my most interesting encounter was when I was offered to invest in two different Ponzi schemes. The first one was called MMM which turned out to be a global Ponzi scheme, and the second one was a local scheme right here in Yenagoa called Baraza.

It all started when I received a message from my own aunty who seemed really excited about this investment opportunity, she was always telling me that I could make huge profits in a short amount of time by investing in MMM.

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She explained how it worked to me, which I was to give my money to someone else who would invest it and bring back even more money which sounded too good to be true to me, but my aunty insisted that it was a sure way to make quick cash and I told her to go on that I wasn't having the money to take such risks. To cut a long story short, my aunt went to invest, to which she received returns for the first two months, and in the third month, everything was lost. To her greatest loss, after the first two months, she had to triple her investment to get a bigger return and everything was lost.

My second encounter, was when my dad came home discussing an investment opportunity called Baraza right here in our city. It called to be a firm which uses the investor's money to trade forex and those investors were promised incredible returns for investing in their scheme. Making it sound like the perfect opportunity to improve livelihood effortlessly.

But as I listened closely, doubts started creeping in. One of my doubts was, if it is a firm that is truly based on trading, what is the maximum number of investors they are looking for my dad had a form ready to fill and submit as he was already interested in investigating, so I took a glance on the form and found out that he was supposed to be investor number 5,346 as written on his form. Then I remembered hearing about Ponzi schemes before and how they can lead to financial ruin for unsuspecting investors so asked him, if they have already received money from 5,345 investors what is the limit of investors they are looking for or the capital they seek?

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After asking him these questions, I realized my dad himself became sceptical about the whole situation, and then I used my Aunt's experience as a backup to my claim. He listened and never submitted the form or invested with them, forward 2 months later, their plaza was locked up by the Economic and Financial Crime Commission (EFCC) of Niger for alleged Ponzi scheme acts.

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Do you know how to detect Ponzi schemes?

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Detecting Ponzi schemes from real investment opportunities can be tricky, but then, from my experience, I have come to know that there are some red flags to watch out for and such red flags include;

Unrealistic Returns:

Ponzi schemes always tend to promise unrealistic profits in a short time, therefore if an investment promises such high returns in a short period, it is a major warning sign.

Lack of Transparency:

Ponzi schemes often lack clear information about how the money is being invested as they always avoid giving detailed explanations and try all means to dodge such questions.

Pressure to Recruit:

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Ponzi schemes always rely on their investors to recruit new investors under them to sustain the scheme which either puts them put pressure or makes it mandatory for users to bring downliners.

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Do you think Steemit is a Ponzi scheme?

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Steemit has been a revelation for me since the moment I joined this platform in 2021 and although some people question its legitimacy and compare it to a Ponzi scheme, I still strongly believe that Steemit is not a Ponzi scheme.

Since I joined Steemit, it has become a tool to help me solve financial issues as I earn the Steem cryptocurrency by creating and sharing content based on my ideas and understanding. Steemit has opened up opportunities for me to generate income in a way that I never thought possible.

My first excitement was that of Steemit helping me to get a new phone in 2022 when I lost my last one, which made me feel proud of myself. With the rewards I earned on this platform, I was able to save up and get myself a device that has greatly improved my ability to create and engage with the Steemit community.

Not only Steemit is helping me save for the future for me were instead of just spending all my earnings, but I have also been able to set aside a portion of my Steem tokens as a form of long-term investment by powering up, which is like having a digital piggy bank that continues to grow over time.

However, the most significant impact of Steemit to me is that it has become a means of livelihood for me because through my consistent effort and engagement with others, I have been able to build my reputation and friends who appreciate my content and this has opened up opportunities for me.

In conclusion, Steemit has proven to be a legitimate platform that has helped me overcome financial challenges. So to me, it is not a Ponzi scheme, but rather a unique opportunity to leverage my skills and passions for financial gain. For this reason, I am grateful for all the doors it has opened and the positive impact it has had on my life and hopefully the ones to come.

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I wish to invite @ruthjoe, @ngoenyi, @chants and @ninapenda.

Thank You for your Time

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NOTE: Always have a smile on your face, as you are never fully dressed without one.