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Risks of using social media to make your investment decisions-1

Ponzi Scheme

Risks of using social media to make your investment decisions-1

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If you are not investing in this new business online, then you are missing out! This is the slogan frequently used by Nigerians when trying to convince their friends to join an investment scheme they discovered via social media.

Lots of investment schemes are advertised on social media. You might want to jump on every opportunity to make quick cash without conducting proper research on the business. 

The investment guru, Warren Buffet stated that you should never invest in something you don’t understand. The Fear of Missing Out (FOMO), is a real struggle for investors as it causes you to make decisions due to emotions, rather than logic. You invest in a scheme because it’s trending and you don’t want to miss out on it.

Everybody has different investment goals, so you shouldn’t be swayed into making an investment decision that won’t match your goal. We would highlight and discuss the risks involved when you make investment decisions, solely because of social media. 

You could fall for a Ponzi Scheme

This is an investment scam that offers you a high rate of return with little risk. In a Ponzi scheme, the older investors are paid from the capital brought in by newer investors. It’s a ‘rob Peter to pay Paul’ scheme. Ponzi schemes neglect legitimate strategies to run the business instead, they focus on making money off new investors’ capital. 

A popular Ponzi Scheme that defrauded Nigerians of millions of naira was Mavrodi Mundial…

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