Unmasking the Mirage of Ghana's Ponzi Landscape with New YEAR RESOLUTIONs
Ghana is not new to Ponzi schemes.
From the days of Noble Dream, God is Love and other similar schemes in recent
times, so many people have lost their investments, and monies due to such
roundly orchestrated schemes. What has even worsened the case in recent times
is the speed at which these schemes run, owing to the power of social media. This
has had an adverse impact on the already nagging disposable incomes of people. For
instance, cases of people allegedly and reportedly losing their families,
friends, relations and lives because of Ponzi schemes have been rife.
Having worked in the investment
banking sector for over 5 years, I can confidently say that the concept of
Ponzi investments is not new to me. Over the period, I have come to understand
why Ponzi schemes, however ridiculous it may sound, will always be successful. As
we bid farewell to 2023, I thought I could remind all of us of the need to stay
clear of any investment scheme that sounds so good to be true. By this piece, I
wish my readers will add the need to be free from any Ponzi scheme to their new
year’s resolution. Without further comments, let me dig into them, as below:
LACK OF FINANCIAL EDUCATION
One of the biggest challenges in
our educational system is the absence of financial literacy or education. A lot
of people go through our educational system without a glint of education that
is supposed to equip them for their financial future. Indeed, it appears,
issues of money are so sacrosanct for academic purposes. This lack of
understanding of financial issues is largely to be blamed for some bad
financial decisions especially on personal level. We are hardly taught any form
of savings or investments schemes, limiting our capacity to decipher what a
legit investment is from that which is illegal. We therefore resign to the fate
of whatever financial analysts and brokers, who are mostly driven by their quest
to meet their huge sales targets, tell us. As we go into the new year, we
should endeavour to educate ourselves about money. There are several resources
and books that can help us stay updated on how and where to invest our monies, especially
these times that monies are hard to come by.
Resolution 1: This Year, my
money is not going into any scheme that I do not understand or have full
personal grasp over.
OVERLY TRUSTING TENDENCIES
I don’t know if it is a Ghanaian
thing but when it comes to money, people easily fall for schemes as though they
were acting under duress. Most of us lack the penchant to seek for further details
and probing before dispensing with our monies. It appears Ponzi planners have
mastered the craft of suppressing people’s reality and thinking caps. I wonder
how they can get people into believing that their investment scheme is not subject
to the prevailing macro or micro economic factors, including inflation, policy
rate and others. It is dumbfounding how someone can believe a 750 GHC
investment can return them 2,500 GHC within two weeks. If we are to own our money next year, we need
to be more critical and somehow paranoid when subscribing to any financial
investment. We may need to ask about the company’s track-record, asset under
management, years of investment experience, and most importantly whether the
company has the necessary licencing to operate.
Resolution 2: This Year, my
money is not going into any scheme that I have doubts about their footprints,
track record and regulatory Oversight.
TENDENCY TO BE GREEDY
It is very natural that we always
want to achieve more with less. This, in principle, is no issue, as that is essentially
part of our human culture and existence. However, it is also important that sometimes
these tendencies are overstretched into realms of greed. Investments that return
ridiculous profits or interests speak volumes to the extent to which people
want their monies to work for them. I know that Ponzi planners have profited and
preyed on people’s tendency to be greedy than anything else. Whilst it is hard
for anyone getting into such schemes to accept that they had been greedy, we cannot
equally overlook that it has perpetrated and motivated these Ponzi planners to
keep scheming and making away with people’s hard-won monies.
Resolution 3: This Year, I will
be reasonably and morally measured in my estimation of how much my investment
should return to me.
TENDENCY TO ACCEPT INVESTMENT
IS A RISK
Investments, whichever way you
consider them, are risks. There are so many risks associated with any form of
investment. Indeed, there is no such thing as no risk when it comes to
investment. Risk relative to investment
may include, inflationary risk, credit risk and others. This fact has found
expression in a popular axiom: ‘’the higher the risk, the higher the reward’’. The
opposite of this axiom is equally considered as being factual. One of the
biggest arsenals for Ponzi planners is to suggest to people that with limited risk,
they can still have high rewards. They have mastered the art of abstracting any
risk and making people believe that their investment schemes is bereft of any
form of risk. Interestingly, whilst some people may have limited appetite for
risk, these same people also have the desire to have high returns. This has
further increased the tendency for people to subscribe to Ponzi schemes.
Resolution 4: This Year, I will
reasonably take investment risks that are commensurate with my risk appetite
and financial rewards.
Lack of Information
Ponzi schemes thrive when people
lack the right information to make the right decisions. In Ghana, this is a
commonplace, as people hardly have access to the right investment information.
This situation is largely blameable on the rather lacklustre attitudes of
regulatory bodies who hardly want to educate and inform the public. Rather than periodically and proactively
update the investing public about new Ponzi schemes, our regulatory bodies have
rather been reactive, usually waiting for the harm to be done before acting. In
situations where they have been proactive, they hardly put up the right
monitoring mechanisms in place to see the back of these schemes. This has
propelled the success of many Ponzi planners, who easily take advantage of
people’s lack of THE right information. Seeking for information from trusted
friends and family members can be a great way out of this conundrum.
Resolution 5: This Year, I will
seek for the right investment information from the right sources, taking
advantage of information from Securities and Exchange Commission and reputed
investment advisory firms.
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