Updated 23rd July 2021
Firstly, this entire post idea is credited to Mr. Money TV (click here) when many fans ask about certain forex platforms. I am just shamelessly copying and paste here. I will come to the reason soon. These types of platforms claim to average a return of 10% return monthly. How does this work? You put your money through the FX platform, the money will be traded by a professional trader. The trader can be trading forex, crypto, gold, and anything that can be traded.
Then you do the profit-sharing with the trader, it can be 50-50 or 60-40. There is no work to be done on your end, you can sit back and relax. The trader is doing all the work for you. You enjoy a stable passive income. How does this sound? Fantastic?
You can bring your friend onboard and you get a commission from their investment. The sales pitch will be simple, you get to enjoy a 10% return monthly. When your friend put money on the platform through your personal link, you get to tap 1% of their investment.
If you introduce to 100 friends, say each put same amount of USD 10,000. You are making 100% of USD 10,000 every month. Happy days! You will have heard that you have friends who have been investing in these platforms for the last few years have now achieved financial freedom.
Why do I want to discuss this?
I want to refresh your memory on a post that I lend my friend
S$50k S$100k which you can read it here. I can take it as a business loan because that is the a P2P loan that he pitched to me. I believe he is invested in these types of FX platform.
Mr Money TV shared that he was introduced by a friend and invested 1k and he achieved 5-10% returns every month for the next 2 years. He would withdraw the profit every month, fearing that the company will go bust as well. Then he started to promote to his friends and they all made money. He went to invest with other FX platforms and achieved 100% return in a year. Then that fateful day happened, he could not withdraw the money.
The excuse was the trader did not close the trade in time and lost all the money in a single trade. Mr Money TV recovered his capital because he withdrew his profits every month. However, his friends who got greedy, pump in more money when they saw more money on the table. As a result, they lost money.
Then all the FX platforms shut down subsequently. The reasons are the same, traders lost money, system crashed and failed to make that trade and company is forced to shut down. The companies will comfort the people that they will figure a way out to repay the money. The guys will run away with all the money and you will never get back your money.
This is called Money Game. It is a game that makes money when you get in early but if you are the last one to the musical chair, you lose all your money. In short, this is a Ponzi Scheme. The early investors can make a lot of money every month when they grow to a very large network. They started to refer their friends innocently because they believe it is legit.
Can we invest in this?
This is like playing Russian Roulette with a bullet in the gun. If you are lucky, you win the money and if you are unlucky, you bite the dust. If you enter early and leave the game early, you can make the money. The money you are making is from someone who ignorantly believes in you and they trust that this is a good investment scheme. This can be all the money they have.
This is a pure gamble. If you want to play this game, you need to be truthful and tell your friends who want to invest what are the risk that they are getting themselves into.
I think I am indirectly in a Money Game now. Can I lose money? Yes.