I am compelled to write about the “new” craze in town the promise of making 30% (or something outlandish) returns on money you “invest”. They come in different forms with different names, but the object is almost the defraud people of their earned money.

NOSPETSCO of the nineties comes to mind, where numerous people made serious money, but much much more lost hard earned money. I asked them why a company supposedly into oil and real estate business couldn’t borrow money from financial situations at a much cheaper rate, but preferred to raise money at 15%/ month guaranteed ROI for gullible gamblers

This article refers to the likes of Global money, MMM, Helping hands.

МММ Was A Russian Company That Perpetrated One Of The World’s Largest Ponzi Schemes Of All Time, In The 1990s. [1][2] By Different Estimates From 5 To 40 Million People Lost Up To $10 Billion. The Exact Figures Are Not Known Even To The Founders.

There is nothing new about such schemes. They are all basically based on the Ponzi Scheme, which debuted several decades ago, and was rampant in the early nineties in Nigeria.


Robbing many Peter’s to pay a single Paul.


Ponzi scheme /ˈpɒnzi/noun:

A Form Of Fraud In Which Belief In The Success Of A Non-existent Enterprise Is Fostered By The Payment Of Quick Returns To The First Investors From Money Invested By Later Investors


With the recession in the economy, and the allure of easy money promised by these schemes, the gullibility index of the greedy and simple minded drastically skyrockets. It only takes somebody known personally to show how much he has earned from such a scheme for the bandwagon effect to set in.

MMM (Ponzi scheme company)

Joint stock company “MMM”

Акционерное общество «МММ»

Have a read at MMM as a prime example of a Ponzi Scheme here


Despite being informed of similar schemes that eventually collapsed over the years (Even Recently In Zimbabwe), lots of people are too blinded by greed to heed the hunters whistle.

Greater fool theory

The greater fool theory states that the price of an object is determined not by its intrinsic value , but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price

Like HIV/AIDS, everybody thinks losing what they put in will only happen to others, and not them. The smart early adopters who joins a Ponzi Scheme believes that he would not lose the money and would be able to pull out before an inevitable collapse.

Like the lottery player who is told that buying a ticket of N100 could win him N1,000,000, it is clear that it is a lose-win proposition, with the multitudinous losers simply making the winners rich.

While there is no doubt that the early adopters of this kind of scheme usually “escape” with a lot of money, the truth of the matter is that Ponzi Schemes rob many (people who join the scheme late) to pay those at the top of the pyramid (the early birds). While many who go in are aware of the risks, and go there with that full awareness, a lot more people go there oblivious of the real danger of losing whatever they put in.

Some were so taken in by this scheme (in the nineties) that they sold real estates and stocks to funnel money in, and eventually lost all when the pyramid collapsed.


What this means in essence is that for every one person who makes tonnes of money, there are thousands more who would (/must) necessarily lose their money.

There is no magic about this, as money is simply being recycled, and any Ponzi Scheme collapses if more and progressively more people do not join in. What this means, theoretically, is that even if every human on earth joins a particular Ponzi Scheme, it is still bound to collapse.

This is simple mathematics.

It is a matter of WHEN and not IF.

Any entity that does not generate any profit but promises returns is similarly collecting money from 30 people to give to one, collecting money from 900 people to give 20, and so on. It is an unsustainable mathematical model.

Apart from the illegality. I am primarily concerned about the ethics of schemes like these. If you go into a scheme knowing that numerous people must lose money for you to gain, then it is unethical similar to a corrupt politician embezzling public funds one person taking money meant for numerous people. You are no better than the robber who takes peoples’ money in the dead of the night. You are using a weapon (greed),the politician takes advantage of “position”, while the robber makes use of the weapon of “fear” of deadly harm or death (facilitated with guns, knives, etc).

A situation of some religious leaders like pastors coercing or browbeating members of their congregation to ignorantly hand over their money and join a dubious scheme is really disheartening.

Of Course Most Humans Behave Like Lemmings,And The Lemming Effect Is Much More Powerful When An Authority Figure Is The Driving Force

I believe Pastors are supposed to be exemplary beacons of moral rectitude / sanctity. They should be evangelizing the importance of ethics to the multitude, and not pontificating earning from where you never sowed,at the expense of numerous hapless people..

Unfortunately, the sermon of prosperity by whatever means seems to be the in-thing in many places of money worship and glorification ..

An undesirable situation.


  1. December 12, 2016 at 9:26 pm

    You said
    “Any entity that does not generate any profit but promises returns is similarly collecting money from 30 people to give to one, collecting money from 900 people to give 20, and so on. It is an unsustainable mathematical model.”

    Very true. But that is not how MMM operates. It is more like the 900 people circulating money amongst themselves and others joining the group. This will go on till individuals grow tired or become discouraged. The system can collapse when people are made to start panic withdrawal.

    While not holding a brief for MMM, I feel one should study it and it’s operations properly before making statements on it.

    • Eye_Bee_Kay
      December 31, 2016 at 3:58 pm


      Money is circulated among the participants, but the quantum of money needed to keep up with the 30% promised ROI is provided for from NEW PARTICIPANTS who join.

      If others don’t join, there is no way the scheme can be sustained. It would simply collapse, and that’s why it is a pyramidal scheme just like all the rest.

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