Close Menu
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation

Newsletter

Get the financial tips, offers and more

What's Hot

Critical Questions About Funeral Cover

September 19, 2024

Mortality Benefits

September 19, 2024

How do You choose a Medical Plan?

October 2, 2023

3 increases in medical rates in 17 months = 27%!

Sponsor: Ubuntu CapitalUbuntu CapitalOctober 2, 2023
Tuesday, June 17
Facebook X (Twitter) Instagram
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation
Money 101
Home»Biz News»What is a Pyramid Scheme? Watch out!
Biz News

What is a Pyramid Scheme? Watch out!

EditorBy EditorSeptember 12, 2014Updated:February 16, 2018No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
Share
Facebook Twitter LinkedIn Pinterest Email

[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.

pyramid scheme 1

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.

 

fraudulent investment investment plan Pyramid Scheme
Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Previous ArticleTime is our greatest asset. Use it wisely!
Next Article Do You Have Policies In Place For Your Domestic Worker?
Editor

Related Posts

Critical Questions About Funeral Cover

September 19, 2024

Mortality Benefits

September 19, 2024

Razer Partners with Clearbot to Clean Oceans the Smart Way

June 8, 2021

Retirement Annuities Explained

June 7, 2021
Our Picks

Momentum Health Increases 2022

October 28, 2021

Who may and how do you apply for business rescue?

May 31, 2021

How Do I Calculate My Tax

May 21, 2021

How to apply for a social grant

May 31, 2021

Subscribe to Updates

Get the financial tips, offers and more

Don't Miss
About Us
About Us

Money 101 is your source of Personal, Financial, Business and Lifestyle educational articles which is brought to you by Adarna.

Visit Adarna: Adarna.co.za
Privacy Policy: Click to View

Our Picks

How am I able to be Tax Compliant?

May 23, 2021

Retirement Annuities Explained

June 7, 2021

Momentum Health Increases 2022

October 28, 2021
© 2025 Brought to you by Adarna.

Type above and press Enter to search. Press Esc to cancel.