The billions of rands people invest in money schemes leaves him speechless.
This is Nico van Gijsen, a well-known figure in our industry, writing in his column.
It boggles his mind that a fraudster running a Ponzi scheme can attract more money in a year than most honest financial advisors manage in a decade.
He calls it “greed” and “foolishness,” as it certainly isn’t due to financial ignorance. People in the financial field write and warn about it – if it sounds too good to be true, then it is.
Yet, says Van Gijsen, like the rats following the Pied Piper, people that hear the tune of high returns and instant wealth, fall under the hypnotic spell of the piper, and blindly follow him.
Despite receiving advice, they consistently turn a deaf ear. People believe what they want to believe. And that’s exactly what the fraudster takes advantage of.
Your savings goals are barely considered, Van Gijsen says. It’s all about returns – music to the ears of the greedy.
He emphasizes how one scandal after another proves how fraudsters exploit people’s tendency to follow others to draw in more victims.
The initial “investors” receive sky-high returns, and sports personalities and politicians are roped in to create a sense of comfort.
The schemer doesn’t need to prove anything; just look at who supports him. This, Van Gijsen writes, is the foundation of a pyramid scheme: returns that fuel greed and public figures who lend the scheme an air of “safety.”
Many people are highly emotional about money, and it’s often these individuals who become the first and biggest victims. It’s frequently older people, which is tragic.
Like the author, I advise removing emotions from investment discussions. Your needs should be the only benchmark.
This will determine how your plan takes shape. That’s how you build wealth. Work with a plan, not promises.
In closing, I want to stress how crucial it is to be extremely cautious if promised returns, exceed what credible institutions can offer.