[ad id=’ ‘]We have all heard that the world is full of scary con-men who are out to get their grubby hands on our hard-earned savings, and that we should never part with our money without making sure that the Financial Advisor is honest and has your best interests at heart. This is unfortunately true – many people have lost money by trusting dishonest investment specialists. Before you hand over any money, ensure that you talk to a reputable Financial Advisor, who is registered with the Financial Services Board, and has the qualifications required to be able to advise clients on their investments. If you suspect that you are being cajoled into investing in a Pyramid Scheme, my advice for you would be to immediately contact the Financial Services Board and report your concerns.
A Pyramid Scheme is a fraudulent investment plan where investors have to invest money (usually disguised as a ‘sign-up incentive’) as well as recruit additional investors, who in turn have to recruit yet more investors. The returns to the first investors are paid from the ‘incentives’ brought in by the next levels of investors.
The problem is not hard to spot if you are thinking clearly and not being dazzled by promises of untold riches. This type of investment cannot possibly sustain itself – there are a finite number of investors that can be recruited, and while no product is being sold, or service rendered, logic should dictate that there can be no profit. According to studies into these types of “investments”, over 90% of people who invest their money, will lose it and be left with no nest egg to ensure they are comfortable in their retirement.
Pyramid Scheme con-artists often prey on the elderly who are already concerned that they have not saved enough to ensure a comfortable retirement – and then end up being robbed of the little they did manage to save!
How to spot a Pyramid Scheme
- You have to invest a substantial amount of money upfront
- There is no product or service on offer
- Your returns are dependent on you recruiting additional investors
Before you decide to invest your hard-earned money, make sure that you talk to a financial advisor who is registered with the Financial Service Board, and that the product you invest in, is an approved and registered investment product. Speak to our registered financial advisors for more information.