How to spot a Ponzi:

South African investors continue to fall victim to so-called Ponzi or pyramid schemes. Lured by promises of massive interest or profit, they are soon fleeced of their entire “investment”.

These are not investments but elaborate scams that enrich the founder while eroding investors’ capital in order to pay out unsustainable returns. As soon as new investment dries up, the Ponzi scheme collapses, leaving most participants severely out of pocket. The latest scheme to hit the headlines is the South African based Belvedere, which is alleged to have collected as much as R200 billion from investors.

Below is a graphic illustration to help and prevent investors falling prey to such schemes: