I recall having a conversation, a couple of weeks back, with a ‘UK number’– at least I presumed it was a UK call because the number started with +44. However, this would be my most recent experience of Bombing as it is popularly called in Nigeria. The strong accent of the “Mr. UK Number” was a clear give-away in my case, but the signs might not be as clear in yours. These modern-day-scammers are tirelessly upping their game and we too must be on alert to protect our wealth.
To do this, let’s start by looking at two of the most common schemes you are likely to come across in Nigeria;
This is a well-known scheme. Typically, investors in these schemes are promised a big pay day that sounds too good to be true. Usually, these scams will appear sustainable until new money stops coming into the scheme or until the founders decide to stop the party and disappear.
Some examples of popular Ponzi schemes include; MMM, Loom, iCharity Nigeria, Help Naija etc., and Agri-investment scams also known to promise huge returns. Learn more about responsible Agri-Investing using our free eBook- Money on Trees: Agriculture Investing for Skeptics.
When you hear ‘’bring two people and those two people will bring four people who will…’’ recognize that you’re about to get pitched an MLM scheme.
The revenues in these schemes normally come from the inventory purchases by new members/recruits of the scheme, as opposed to sales made to actual paying customers. These revenues (and profits) are also usually concentrated at the top. In the United States, a study of MLM schemes showed that only 2% of distributors/members actually make a profit. The odds of striking it rich in this line of work are very slim.
Some examples of MLMs that have been accused of operating as pyramid schemes including LulaRoe and Herbalife.
How to protect your wealth and avoid being scammed in Nigeria.
When any supposed business venture is pitched to you, suspect, suspect and suspect it again. It’s fine if your friends and family criticize you for your lack of “sharpness”. The words will not deplete your bank account, thankfully.
Whether it’s a proposed business venture or investment opportunity, spend time to answer some critical questions. Here are a few for a start:
Feel free to do some quick research or go for the full “Sherlock Holmes”, if you must. We’re talking about your hard-earned money here.
If you do not understand it, do not invest in it. It is not advisable to put your money in a scheme, business, or investment that you do not fully comprehend. If the investment plan or mechanics seems too complicated, you might want to press pause. If it seems like a big bowl of technicalities not made simple and to your understanding, press pause. If it is really worth your time, then you should invest your time in understanding the opportunity better, before you make a move.
What you should do with your money instead.
Shining your eyes (paying attention to avoid scams and gimmicks) is not enough to grow wealth. While it is necessary to stay alert, you need to make use of an actual strategy to grow your money. In our playbook Tame the Unknown: How to Build a Wealth Base, we share tips that you can employ to build “sleep well” money and potentially grow your wealth using the right strategies.
It might take an entire lifetime to make your hard-earned money, but one wrong investment decision in a split second is all it takes to lose it all. Dot your i’s, cross your t’s, trust your instincts and most importantly, Shine Ya Eyes!!