Let’s face it! The majority of the people just want to grow their wealth by any means, whether it’s buying high-profit shares in the stock market or buying a lottery ticket. People need the money and they often get so desperate that they end up making blunders. Such wrong decisions make them regret for the rest of their life. So, why does this happen in the first place? Well, the answer is quite simple: people are so attached to tangible things today in their life so that they need money to fulfill their vague dreams.
However, it is advised to be alert when you are on your path of making more money. Being excessively greedy will make you blindfolded and you might end up in a trap like a Ponzi scheme. Now, if you don’t know what it is or you are unaware of the word, then let first discuss it briefly. So, let us get started.
What exactly is a Ponzi scheme?
A Ponzi scheme is basically an investment fraud where you will be promised to get higher returns from the company. In the initial stage, you might even enjoy some benefits, but as time passes by, you will be losing all your money. So, it is nothing than sort of a scam where the fraud company uses the money of the old investor to attract new investors. Hence, the cycle keeps continuing but in reality, such companies never make any real profit. In the end, the investors will dry up and the scheme is collapsing. The new investors lose their money where the company and the few old investors get all the money.
So, if you are investing in a company, how can you know whether you are becoming a victim of such a scam? We will be discussing this further by mentioning the telltale signs that you are about to fall into a Ponzi trap.
Signs that you are under the trap of Ponzi scheme
1- A Guarantee of high returns
The first and major sign that you must see is when the company is offering you the high returns guarantee and that without any risk. Now, it is important to remember the golden rule of investment that every investment comes with a certain degree of risk. So, if the company is making false claims about the guaranteed high returns, then you must be cautious and find out about the company more.
2- The returns will be most consistent
Another sign that you are involved in a scam is after making the investment, you are receiving a consistent. So, if this is the case, then you need to inspect the matter seriously and take the help of some qualified experts. Despite the market circumstances, you are getting good returns, then this is probably a PONZI scheme.
And the worst part is that if you have lost all your savings because of the scam, then you might face big trouble in the future. If somehow you are facing an emergency crisis because of the scam, then you could take the help of the lender and apply for the installment loans for bad credit to get funds urgently.
3- The investing company will not be registered
If you are investing, then you have to ensure that the company where you are putting your hard-earned money is legal. Find out whether the company is registered with any of the state regular or security exchange commission (SEC) before investing your money in any business. Never forget to check the registration of the company where you are about to put your money.
4- The complicated form of investment
It is said that you must never invest in a company that you don’t fully understand. Hence, if it has been a few months and you have not completely understood the investing procedure of the company, then there is something seriously wrong. Work with the company or organization that makes you clear about the investment scheme after you have signed.
5- You are not easily getting the returns
One warning sign of the Ponzi scheme is that you are facing difficulties in getting the returns or you are not getting returns as you were promised. It’s a clear sign that this investment scheme is vague and a complete scam. Now, this can lead you to a dangerous situation when you were planning to use the returns to deal with your financial constraints like paying your credit card bills, past debts or any other. However, it is best to get out of such scam as early as possible and for the funding part; you can approach a direct lender where you can get very bad credit loans no guarantor and no broker in the UK. So, this was everything that you need to know about the Ponzi scheme and major signs to determine whether you are trapped in this money scam.