Some fun with numbers
- Thread starter lukeplyr83
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lukeplyr83
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resjudicata
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@lukeplyr83 Yes I agree but it's not even the suggested ridiculous returns.
There have been some recent headlines regarding some investors putting in money to term deposits that offered slightly better returns.
Also recall the period after 2008 where alot of finance companies fell over. They weren't "scams" by definition. But the returns did not compensate for the extra risk.
If I'm not looking to invest and just wanted to earn some interest. Personally I would put the money with the big 4 banks and kiwibank (deal directly with them).
There have been some recent headlines regarding some investors putting in money to term deposits that offered slightly better returns.
Also recall the period after 2008 where alot of finance companies fell over. They weren't "scams" by definition. But the returns did not compensate for the extra risk.
If I'm not looking to invest and just wanted to earn some interest. Personally I would put the money with the big 4 banks and kiwibank (deal directly with them).
paulwouldsay
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@lukeplyr83 Another red flag is a promise of consistant returns. Bernie Madoffs ponzi scheme promised high but not questionable returns of around 10%. However he promised consistant returns. Which doesn't happened as markets fluctuate and there will always be ups and downs. If someone promises only ups then they are cheating someone to get those returns.
resjudicata
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@lukeplyr83 By making the supposedly legitimate part of the scam fairly unbelievable you automatically filter out people that might not fall for the actual scam part. It's deliberate in some cases for sure.
in_jesus_i_trust
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@lukeplyr83 To play the devil's advocate...
I don't think they are promising 60% returns every 3 months in perpetuity. The idea is that there is some one-off scheme that requires substantially more capital than they have (hence why they can't just do it themselves) and has a short turn around.
These kind of scenarios really do exist in real life. Undervalued commercial property (perhaps a defaulted loan) that can be flipped (ie a guy knows a guy, property isn't going on the market), border-line insider trading of a company getting a hostile takeover, undervalued classic cars, high-cashflow investments that require a large initial deposit. These happen all the time, but plebs like us never get a look in.
The key point here though is that if the scheme was genuine, they could find any number of investors through the normal avenues (investment brokers who have a ring around their wealthy clients and probably the first 1-2 people to pick up would be frothing at the bit to invest). They would never try to cold call random people to invest.
I don't think they are promising 60% returns every 3 months in perpetuity. The idea is that there is some one-off scheme that requires substantially more capital than they have (hence why they can't just do it themselves) and has a short turn around.
These kind of scenarios really do exist in real life. Undervalued commercial property (perhaps a defaulted loan) that can be flipped (ie a guy knows a guy, property isn't going on the market), border-line insider trading of a company getting a hostile takeover, undervalued classic cars, high-cashflow investments that require a large initial deposit. These happen all the time, but plebs like us never get a look in.
The key point here though is that if the scheme was genuine, they could find any number of investors through the normal avenues (investment brokers who have a ring around their wealthy clients and probably the first 1-2 people to pick up would be frothing at the bit to invest). They would never try to cold call random people to invest.
@in_jesus_i_trust I agree, if the deal suggests its an ongoing investment this would trigger a few more people's senses to be careful.
And likewise if the amount invested is not life-changing, then the 60% return sounds more plausible, less risky.
And likewise if the amount invested is not life-changing, then the 60% return sounds more plausible, less risky.
@lukeplyr83 I saw a comment in a crypto sub that linked to a YouTube video and promised “40% return almost every day”.
So I ran the numbers on a 30% return every day to indicate to would-be clickers that very likely impossible.
After 30 days, $1 would be $2,619, after 60 days at 30% return daily, $1 investment would return $6.8 Million.
So I ran the numbers on a 30% return every day to indicate to would-be clickers that very likely impossible.
After 30 days, $1 would be $2,619, after 60 days at 30% return daily, $1 investment would return $6.8 Million.
lukeplyr83
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jamesbates
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@lukeplyr83 Well is important to note you can get scams, or just bad advice.
Bitcoin has gone up a crazy percentage in the last 10 years. You do get a lot of people who advocate buying it without getting any kickback themselves (essentially zero). This is terrible advice imo but not a scam.
Like buying a lottery ticket is not a scam because no matter how bad the odds, or average returns are, you aren't being lied to.
A scam is where you are presented with false information in order to trick you into giving them your money.
Bitcoin has gone up a crazy percentage in the last 10 years. You do get a lot of people who advocate buying it without getting any kickback themselves (essentially zero). This is terrible advice imo but not a scam.
Like buying a lottery ticket is not a scam because no matter how bad the odds, or average returns are, you aren't being lied to.
A scam is where you are presented with false information in order to trick you into giving them your money.
@jamesbates with bitcoins its not zero kickback though, the value inherently relies on more people buying into it to prop up the price, similar in less extent to the property market or the share market
@lukeplyr83 some people do go into certain types of scams intentionally, with the view to exit before the scam operation exits or crumbles. Example: pyramid schemes, or the property market
resjudicata
New member
@lukeplyr83 I like the one that says "Give us your money until you retire. We'll take fees from it while also using your money for investments which we'll pay you part of the return on. If you want it before retirement age you have to get approval."
I think it's called Kiwishaver or something
/s
I think it's called Kiwishaver or something
/s
@resjudicata I mean you don’t have to have the govt money if you don’t want?? It is optional. (With automatic enrolment to help those of us workers not be exploited by big business)
The govt would give the average NZ > 40,000 on top of super but only if you meet them half way.
The govt would give the average NZ > 40,000 on top of super but only if you meet them half way.
harpazo_woohoo
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@lukeplyr83 Greed versus Rationality - don't go together.
pineapplejam
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@lukeplyr83 My mum has fallen for a few scams. All of them seem to take the format of “you’ve missed some financial detail with tax/banking/car payments etc and you’re about to suffer a penalty unless you fix it at once” kind of deal. It’s fear of something going wrong that gets her. She hates bothering other people with her problems (it’s a her issue, not because my sister and I aren’t open - we are) so she tries to fix things herself and that’s when she gets in trouble.
gregorydens
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@lukeplyr83 I get it. The "legitimate" approach, is to get lucky and produce a bunch of value (or better yet, inherit it). Then you put that value into the guaranteed returns system (S&P 500) to enjoy value for the rest of your life without having to produce anything.
So I can understand those who recognise this, but don't have means to overcome that first hurdle to get on the gravy train. They're out looking for ways to get that extra value, get blinded by greed when it looks like they've found their angle.
Working isn't really an effective option, except in very rare circumstances.
So I can understand those who recognise this, but don't have means to overcome that first hurdle to get on the gravy train. They're out looking for ways to get that extra value, get blinded by greed when it looks like they've found their angle.
Working isn't really an effective option, except in very rare circumstances.
@lukeplyr83 I love these posts and I love scams (learning about them not scamming people 
.
Firstly, as others have mentioned, scams are a numbers game. You send out 1 billion baits and only need 10 or 20 suckers to bite. They operate this like a business with expenses and profits. Some scams might be low profit, so they need high ratios, some might only need 1 sucker out of 1 billion (think the term deposit scam where someone lost 1 mil).
Secondly, you are only thinking of investment scams. Scams come in all shapes and sizes. Not all scams involve crypto or stock market investments. A scam can be as simple as offering an item on TradeMe for sale, once buyer pays, I don't send the item.
Thirdly, you are making the assumption that humans are 100% rational 100% of the time. If that was the case then none of us would fall victim. People are irrational. I once had a friend tell me about a great investment opportunity he was pursuing. I did some research and found conclusive evidence the person he was dealing with was a scammer. I told him and he even agreed with me this was a scam. A week later he still fell for it. You might be thinking, WHAT? Your friend is a dumbass then. Well no, (maybe) but the scammers are masters of manipulation. They convinced him it wasn't a scam even after I convinced him it was a scam. Now in hindsight it was obvious he was being irrational. But hindsight is always 20 20.
Scams are like businesses, they market their products in different ways purposefully to serve different audiences. The super obvious scams you gave as examples were never targeted at you anyway. People stupid enough to click on those are their ideal customer.
.Firstly, as others have mentioned, scams are a numbers game. You send out 1 billion baits and only need 10 or 20 suckers to bite. They operate this like a business with expenses and profits. Some scams might be low profit, so they need high ratios, some might only need 1 sucker out of 1 billion (think the term deposit scam where someone lost 1 mil).
Secondly, you are only thinking of investment scams. Scams come in all shapes and sizes. Not all scams involve crypto or stock market investments. A scam can be as simple as offering an item on TradeMe for sale, once buyer pays, I don't send the item.
Thirdly, you are making the assumption that humans are 100% rational 100% of the time. If that was the case then none of us would fall victim. People are irrational. I once had a friend tell me about a great investment opportunity he was pursuing. I did some research and found conclusive evidence the person he was dealing with was a scammer. I told him and he even agreed with me this was a scam. A week later he still fell for it. You might be thinking, WHAT? Your friend is a dumbass then. Well no, (maybe) but the scammers are masters of manipulation. They convinced him it wasn't a scam even after I convinced him it was a scam. Now in hindsight it was obvious he was being irrational. But hindsight is always 20 20.
Scams are like businesses, they market their products in different ways purposefully to serve different audiences. The super obvious scams you gave as examples were never targeted at you anyway. People stupid enough to click on those are their ideal customer.