PONZI SCHEMES: Our mumu never do?

In 1980 or 1981, I learned an important lesson that shaped my life. My father gave me pocket money and funds for provisions. My brother, Ufuoma, took me to Igbudu Market in Warri, Delta State. We saw women engaged in amateur gambling called “try your luck.”

Greed took over me. I thought I could double my provision money. I started with N1, then N2 (N1 bought five tins of sardines). Ufuoma noticed the women were manipulating the game to ensure I lost. He insisted we should leave, but I begged him for one more chance.

We spoke in Urhobo, which the women understood. They manipulated the game so that I won occasionally. This made me believe I could win back my losses. Eventually, I ended up with only N2 left and walked home hungry.

This experience was a blessing in disguise. Even as a teenager, I recognized the danger of greed. Forty-five years later, I've never gambled again. Greed can make you vulnerable to scams and desperation can too.

Later in life, I read books on personal finance and financial literacy. One key lesson is not to invest without understanding the business first. Knowledge increases your chances of success but does not guarantee it.

Now let’s discuss a recent Ponzi scheme collapse in Nigeria called CBEX. It is a digital trading platform linked to Smart Treasure from Ibadan. Last weekend, investors could no longer access their accounts or transactions. Allegedly, depositors have lost about 1.3 trillion naira (around $847 million).

I apply three principles to stay safe since 1981: zero greed, avoiding desperation, and education.

First is zero greed. After my market experience, I eliminated greed from my life. If you are not greedy, it’s hard for anyone to scam you.

The highest genuine returns on investments in Nigeria range from 14% to 20%. Some exceptional cases exist where people earn more quickly through property sales or stocks rising unexpectedly.

However, Ponzi schemes promise unrealistic returns like 100% within a month! This raises questions about how they generate such profits.

Second is avoiding desperation. Many seek quick money without understanding sound investment principles. Some blame their urgency on current hardships; however, this desperation has existed long before now.

Nigeria has seen over 100 Ponzi schemes in the last decade alone! People have lost billions due to greed and ignorance during these times.

CBEX reportedly originated in China but likely had Nigerian collaborators involved too. Investors were asked to pay between $100 and $200 just to verify their names on the platform before payments could begin!

Third is education before investing your money anywhere! When considering stocks, I attended seminars on stock analysis techniques.

When the stock market collapsed later on, many lost money—but not necessarily due to lack of knowledge.

I avoided certain stocks based on what I'd learned about analysis techniques—like a confectionery company whose service quality declined over time.

Now we don’t know who owns CBEX or its directors yet people invested thousands blindly! Some even sold homes or assets for this scheme!

The Economic and Financial Crimes Commission (EFCC) has promised help recovering investors' money and is already investigating the matter.

However, I'm concerned whether any funds remain intact after such collapses? Ponzi schemes often rely on new investors’ cash flow rather than actual trading activities!

They use incoming funds to pay existing investors until they run out of new participants—then collapse completely!

I hope EFCC delivers as promised because many lives are affected by these scams.