Are you considering making an investment or taking advantage of an opportunity but something smells fishy? It may be a ponzi scheme (or some other type of scam). Here are some ways to spot a ponzi scheme, as well as some questions to ask yourself before investing any money in any sort of venture:
- Do you fully understand how the venture will make money? Does the venture make money by providing a valuable service that people will pay for or does it rely on further investors (suckers) to bring in money?
- Do the returns sound too good to be true? Most ‘safe’ investments make less than 8% a year. A good investment in a good company can maybe make 20-25% a year. Anyone promising quick 50-100%+ returns is likely a scammer.
- Is the person come across as more of a salesperson than a businessman? Are they trying to get you to buy something? If they seem like a salesmen, it is most likely because they are trying to sale you a con rather than get you to invest in a legitimate business.
- Use the Internet to do research about the company. Do extensive search work. Crooks will often change names to hide their tracks. If that is the case, expand your search to the sort of business they claim to be doing to see if you can find reports about similar businesses.