Do you know what a Ponzi scheme is? It was named after Charles Ponzi who started the fraudulent high interest, low risk scam. What is often ignored by a lot of people including myself that to get high returns, there must be a certain room for risk and sometimes, our greed prevents people from thinking of the risk and only think of the return, a decision that cost me a lot of money with somebody. The whole scam is diagrammed above where the person wants to make a quick buck at low risk which is just stupid. Just do some simple Math and you know something is wrong.
I thought of why so many Filipinos even graduate school students of business get deceived. If we take a look to what's really wrong with a lot of Filipinos. There is always the problem of wanting "biglang yaman" or "instant riches" but as the saying goes, "Money that's easy come is usually money that's easy go." isn't it? Many Filipinos tend to want success but do not want to do hard work. As somebody who has done some investments in the bank such as entering into treasury bills (which are marketable securities), time deposits and unit investment trust (which provides divided income for corporations) units -- itakes some time doesn't it? In-between, I have to do some work, make sacrifices like I want to buy something now but if I want more money, I will forego what I want because I am thinking long term.
If you want to know why the double your money in five years got removed and/or discouraged then you can think it's just not practical to offer such a product. I remembered the investment I had in the now closed down bank which the money was said to double in five years, however it wasn't really doubled. I was able to get a Philippine Deposit Insurance Corporation check but the bank was closed. Offering a double your money in five years investment is too much of a risk. At the same time, it might also be a scheme like how the Legacy banks had a legacy for their stupidity.
Sad to say but many Filipinos refuse to think long term with their I live for today attitude or party lifestyle. There is also the consideration of having bad work practices where many Filipinos don't do their work properly then they just spend left and right. When they can't afford what they want, they will use somebody else's money or borrow money from a loan shark, buy it then they don't even think of how to pay back that money. It's just like horray I got a VIP ticket to One Direction but not thinking of how they would take care of their other needs. It can be attributed to the fact that they think lifestyle is the biggest indicator of one's wealth rather than one's earnings and savings. These attitudes are often laced with the hypocrisy of anti-elitism.
As I mentioned earlier, the bank investments that I got involved to do yield interest but not enough for a lavish lifestyle. So what happens is Ponzi schemes love to take advantage of such people who are gullible and wants easy money. When you want easy money all the theoretical aspects you've learned in business school are overridden by that desire. You can digest all the theories you want but if you get greedy, your logic gets defeated. In turn because many Filipinos want easy money, they end up investing with these scam investors and by the time they run out of people to con, they may easily get out of the country perhaps by appealing to Commission on Human Rights department, bribe NBI and maybe, hide in another country where I assume they'll find another way to do their schemes before they inevitably fall down.
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