Unless you’re living under a rock (and even if you were), as a Nigerian you’ve heard of the new craze in town, MMM.
I, like everyone else on the more sensible (and relatively middle class) end of the spectrum have easily and accurately dismissed MMM as a Ponzi scheme. It’s not hard to see that it is one considering that every ‘investment’ you make depends on more people joining in or someone else making a larger investment in order for you to make your return. The question becomes, how long does it take before the upper limits of new joiners or ‘help’ increases is hit and the house of cards collapsed.
Based on this understanding, it’s easy and straightforward to advise most people to avoid it. There’s even an element of ‘why don’t they see it?’ involved where you assume that only the irrational and desperate would join MMM.
However, I think there’s a logic to the whole bants that is at play here and that makes it understandable that one would invest in this scheme. This is because risk and uncertainty aren’t quite the same. MMM is a risky scheme as a whole but while it remains, they have tried to reduce the uncertainty that you will receive your return to a minimum with all the built in controls and incentive. You’re not worried about if you’ll be paid back, you’re just worried about whether MMM will stick around long enough for you to. So then everyone knows MMM has a built in time bomb. It’s a known risk.
The question then becomes, are you being adequately compensated for that risk? It’s all about risk adjusted return. At 30% a month, I could hazard a ‘Yes’. When I bought shares in Tesla in 2012, it was an extremely speculative bet and the wipe out risk was high. But so were the returns and I recovered my full investment in about a year plus. With MMM, if you’re careful to invest only the amounts you can afford to lose, and you take your profits in until you recover your initial investment, you can be fully out and investing only profits within 3-4months. A full year’s expected return with MMM is more than 30 years return in most traditional investments.
Based on that criteria, and given the dearth of choice available to most people, investing in MMM has some things to recommend it. However, risk happens faster than Steven Seagal bears up bad guys so understand that you might also get wiped just as you’re going in.
The summary of this all is: if you are methodical about it and if you go in knowing what the deal is, MMM might not be as crazy an idea for you as it is under normal circumstances. Especially if you are desperate for it.
For me personally, It goes without saying that I’m not in MMM and wouldn’t touch it with a ten foot pole. But then again, I don’t need to. But for those who are, all I can say is, be smart, don’t let greed cloud your judgement, understand that D day is coming as sure as sun rises in the morning so be methodical and don’t lose your shirt.