Trusting someone with your money is always a big challenge even especially to people whom you barely know. Every year, millions of dollars are lost from hard-working honest people who have trusted some dubious organization with their money. That’s why being overly cautious and protective of your assets is a must in order to secure your finance.

Here are some tips on what you can do to avoid these evil schemes:

Managed Investment Schemes

These are setups where money is collected from individuals and utilized for investment purposes. You have no day-to-day control over your funds or knowing where your money is being invested or to whom it is given. Cash management trusts, equity trusts, property trusts, agricultural schemes – all such schemes should be thoroughly checked before you make any decision.

Ponzi Schemes

Bernard Madoff has become notorious for his infamous Ponzi scheme that plundered billions of dollars around the world. In such an investment scheme, money is collected with the promise of rich returns. Subsequent deposits pay for the earlier investors and the cycle keeps going. Eventually, the scheme collapses on its hollow core and the last group of investors is wiped out. Remember it is illegal to receive profits from a Ponzi scheme and you can be liable for recovery and penal action.

Pyramid Schemes

The most used scheme, unlike a Ponzi scheme, these outfits promise you multiplying returns when you recruit more investors into the chain. Those who fail to draw in other “victims” lose their money. Eventually, your “network” also withers away, without the golden promises of rapidly multiplying money ever coming true. The modus operandi of such MLM, binary marketing or chain referral schemes as they are fancily named is to quietly disappear when the base of the pyramid has grown large enough for a massive loot.

  • Ask for a copy of the company’s audited accounts for the last few years.
  • Ensure that the company is registered with your national registrar of companies or relevant monitoring body.
  • Check if the investing company has a license to operate such a scheme.
  • A company with all necessary certifications will also have insurance to cover its losses if its project fails.
  • Beware of any company that promises disproportionately high returns within a short time.
  • Consult an accountant and lawyer and local finance authority to investigate such claims.


Being knowledgeable about these money management schemes is an advantage over these schemes. Before they can offer mouth-watering proposals, you have already shut them down with your ideas on their schemes. It is not bad to not trust so easily, because…

Have you been scammed? Do you want to invest your hard-earned money but are too afraid to try because you may be a victim of money schemes? Learn how to protect yourself, your time, and your money from the predators of the consumer world.


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