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Are there shortcuts to making money?

CORRESPONDENT
Easy does it: The allure of quick cash often leaves many worse off PIC: PHATSIMO KAPENG
Is there a shortcut to making money?

Can I sleep and wake up with P1,000 in my bank account? Many Batswana love shortcuts and when we hear of a quick way of getting money, we all rush there without even thinking of the consequences.

If it’s easy money, then it is evident that someone suffered along the way or someone was taken advantage of.

What’s a pyramid scheme?

According to Andrew Bloomenthal, a pyramid scheme is a sketchy model where a few top-level members recruit new members who pay upfront costs in the chain to those who enrolled them.

Will Kenton explains it as illegal investment scam based on hierarchical setup of network marketing. He adds that new recruits make up the base of the pyramid and provide the funding of the so-called returns. They are based on tiers where new members are at the bottom and the members at the top make the majority of the money.

Does it ring a bell? The first members make more money and once they have made money they disappear and leave you headless and lurking around in WhatsApp groups.

The largest pyramid scheme in history was weaved by one thief in a suit called Bernie Madoff, an American financer. He set up a business front that his company was making huge returns through an investing strategy called split-strike conversion, which is actually real trading.

However, Madoff was simply depositing client funds into a single bank account that he was using to pay existing clients who wanted to cash out. The thief in a suit was unable to maintain the fraud when the market turned downward in late 2008. He then confessed to his sons who worked at his firm but claims they were not aware. His sons turned him over to the authorities the next day. The fund’s last bank statement indicated it had $64.8 million in clients’ assets. The scheme ran for nearly decades and defrauded thousands of investors out of tens of billions. At age 71 he was sentenced to 150 years in prison.

Last weekend, social media was buzzing with one pyramid scheme called WhatsApp gifting and almost everyone was on a mission to recruit members.

You log onto Facebook and the first thing you come across is “Join with P100 and make P600”. Life is apparently easy with pyramid schemes. We can only teach people about the dangers and the losses that come with joining pyramids schemes, but we cannot stop them from

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joining.

The saddest thing with pyramid schemes is that only a small number of members get the so-called returns and the rest of investors get tears.

It is important that people understand that if and when you want money, you work for it. Money does not fall from the sky. If your money is falling from the sky,  then sit down and analyse your life.

Kago Keotshwaetse a financial consultant posted about this on Facebook.

“WhatsApp gifting is illegal as per the rules and regulations by authorities in the financial sector. You need to always seek advice from any licenced and accredited financial consultant before you join any pyramid scheme, chain letter scheme, multiplication scheme and others that will require you to just join and recruit. That is a scheme and it is illegal.”

The Consumer Protection Act of 2018 also clearly states that pyramid schemes are prohibited by law. A person who participates in a pyramid scheme commits an offence and shall be liable to a fine not exceeding P100,000 and/or imprisonment not exceeding five years.

Now let us take some time to reflect on the above Consumer Protection Act. Imagine a scenario where you are involved in a pyramid scheme and you get your P600 and you leave the other members.

The other members are not paid so they report you to the relevant authorities. The question is: Will you be able to pay the P100,000 or spend five years in jail or worst-case scenario can you pay the P100,000 and still go to jail?

It is up to individuals to research on any business ventures they want to jump into. It is up to them to check the legality of it. It’s up to people to ensure that in whatever they do, they consider the consequences not only for them but for other people involved. You might say I am the first in line I got my P600 and I am disappearing, but what about the other members?

Before you trick other people, remember you have a heart and a head. Let us be responsible citizens and not get swayed or be quick to join these get-rich-quick schemes. Always remember that pyramid schemes are illegal and we all know where illegal activities end up.

TSHEGETSANG TEBELELO*

*Tshegetsang Tebelelo is a final year student at the University of Botswana pursuing a Bachelor’s Degree in Counselling. She is a published author and is passionate about writing



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