On Money: Navigating Investments

It's yet another Friday, and I'm holding on to the tradition of writing articles every Friday. So far, I've managed to keep it going, hitting four in a row! It almost sounds like a line from a rap song. I might even consider resurrecting my rap career, which died on conception years ago.

A few months back, I got married, and I've felt the urge to share a bit about married life. However, I've been told that I'm not experienced enough in life to be making claims in this field. I get where those people are coming from, and I can say that I've got a few articles tucked away, to be released maybe 20 years from now, when I'm, as they say, "ripe."

This whole "not allowed" to talk about marriage thing made me a bit skeptical about the topic of the day. Here's the deal: I want to discuss the need for exercising caution with financial management, particularly in investments. If we draw an analogy with marriage, this article should be coming from the likes of Benedicto Berna Nkhoma and Thomson Mpinganjira. But as a broke student with no practical experience in the field, I feel like I shouldn't be delving into this subject. Yet, I believe my relative lack of experience is precisely what qualifies me to write about it.

This week, mainstream and social media buzzed with news that many people had been scammed after investing in a company called CDC. Reports stated that the company's website, where people had invested thousands, even millions, just vanished, leaving investors wondering if they would ever see their money again. This came after what must have been a strong campaign to lure people into investing and referring others to multiply their money.

If you've been paying attention, you'd know that money-making schemes like these aren't new; they've been around in various forms. AIM Global, Jama Life, Crown Investment, and other platforms have had their time in the spotlight. With the rise of blockchain technology and cryptocurrencies, there were also companies offering trading platforms for these innovative technologies, which were supposedly poised to challenge the roles of central banks. If the previous sentence confuses you, you're not alone. The only difference between you and others is that some ended up investing in different cryptocurrencies and losing money, just as others fell for various trading and pyramid schemes.

I'm not saying cryptocurrencies are scams. Some companies have invested heavily in cryptocurrencies and traded them. However, you need to have at least a basic understanding of how these platforms work before entrusting them with your life savings or tuition fees, hoping to double your money within a week. I attempted to grasp cryptocurrencies and the blockchain technology behind them. After several tries, I realized studying statistics made more sense, so I decided it was better to pursue further education in the latter. My point is just that I'd never invest in crypto because I just don't comprehend how it works. Statistics may not be the most "friendly" subject, but I would rather be struggling with regression than try to wrap my head around Satoshi Nakamoto's white paper on the block chain.

In light of the recent scandal, I noticed people mocking those scammed by CDC online. I tried putting myself in the victims' shoes, and that made it impossible for me to find it amusing. I understand where it's coming from. Poverty in our country has reached alarming levels, and people are desperate to make money. Not a week goes by without hearing of a mobile money transaction scam. We all remember how people flocked to training sessions when one man offered practical lessons in manufacturing, promising to usher in an industrial revolution for Malawi. In these financially troubled times, it's easy to get enticed by the prospect of making money, blinding us to the risks and legitimacy of these schemes. One might wonder if there's a way to evaluate such schemes, and I believe there is.

 As rational beings, we need to understand that there's no such thing as a free lunch. Making money requires initial capital and effort. When someone promises to multiply your money in a short period, you should be suspicious. In short, if it sounds too good to be true, it probably is. We also need to be wary of schemes heavily marketed with referrals as one of the requirements for making money. If someone bombards you with messages and calls to join, they're likely just trying to profit from your referrals. Here's another tip: scrutinize the person recruiting you based on their clothes and shoes. If it doesn't seem convincing, run! Essentially, we need to learn from history.

One solution to these scams would be providing financial literacy in any form. Even though some educated people have fallen victim to scams, I highly doubt anyone with a solid understanding of market principles would be easily duped. The challenge is that we're living in times when even those meant to lead us seem to be making a name out of striking dubious deals.

Ultimately, these issues could be mitigated if people were economically empowered. I firmly believe that the risk of investing in dubious schemes would significantly decrease if the economic environment allowed people to thrive in their businesses and earn money with genuine buying power. The high cost of living, combined with a hostile business environment, drives people to invest in questionable schemes. I could have discussed the dangers of gambling, but I'm aware that my opinion on this topic aligns with what Onjezani Kenani shared. We all know how he was criticized for days after speaking against gambling. Well, it's too late now. You might win some bets, but that's not a sustainable way to get rich. You see, it's not wise to get rich without undergoing the process of becoming wealthy.

That being said, I sympathize with the people who lost money to CDC, although I can't help but wonder how they couldn't see through the deception (excuse the language). I saw a picture of the Regional Manager for CDC and an ad that said people could find him at his base of operations near a bridge in Chikanda, Zomba. If you've been to Chikanda, you'd agree with me that people could have made better decisions. I also saw the Karonga offices. We need to be more discerning.

As we approach the weekend, I urge you to safeguard your hard-earned money. Avoid reckless spending and investments, and if possible, limit the soft loans you provide to family and friends to what you can afford to lose. If someone asks you to invest in something and you don't see an actual product being sold, run and don't look back.

 

Have a wonderful weekend.