Guyana is a society where promises about financial freedom will always intrigue the masses. With the poor making up a significant section of the population, those who package and sell those dreams might see this as a favourable place to prey on the desperations of those who dream of wealth. Unfortunately, based on income alone, most Guyanese will not become rich. Most also do not save. The lifestyle of living from pay cheque to pay cheque is prevalent, with some people going broke within days of being paid. Sad, too, is that this is a cycle that has been passed from generation to generation in some families. While some families focus on building generational wealth, in some families there are no investments for the children’s futures. They are given the minimum – food, clothing, shelter and the opportunity to gain an education – although some are not even given that. And even if the basic needs are met, it is often not enough for the children to succeed without much struggle. Many Guyanese young people must start to build on their own when they leave their families. This is a culture we must seek to change.
Rags to riches stories are not impossible in Guyana. We have seen many instances; whether it was by building businesses, making smart investments, or careers that led to wealth. Some Guyanese may also gain riches by winning something like the lottery. Even though for lotto winnings to lead to lasting wealth, one would have to make wise investments. Unfortunately, there are many accounts of people who have won the lottery and were broke a few years later. Many believe that material possessions indicate their worth. Therefore, some people when they win the lottery or otherwise gain sudden riches fall into the trap of splurging. They buy all the things they dreamed of instead of making investments that would lead to long term financial security and sadly it is often too late when they realize the money will not last without a plan.
But besides the lottery, there are other schemes that promise financial freedom.
About two months ago I became aware of ‘Gifting or Blessing or Sou-Sou’ as it is called in some places. I was approached a few times to invest. In one instance it was to invest $21500 and have two friends also invest. The return promised was $162,000. In another instance it was to invest $40,000, with two friends again and the return would be $360,000. And in another instance, it was to invest $100,000 and the return would be $800,000. The people who approached me swore that it was not a scam. A couple said they had already received their return. Surely it would seem worth the risk.
Despite the assurances, however, I was skeptical. I could not see such schemes lasting long. I have seen and read about too many scams. If people decide to invest in such schemes, it should be money they can afford to lose. I think, however, the risk, uncertainty and often sketchy details about such schemes should deter most people from investing. Believers may say I am being pessimistic. I have even heard instances of people being accused of having a poverty mentality when they question such schemes. Maybe I am indeed a bit of pessimistic for questioning the sustainability of ‘gifting and blessing’ in Guyana, but I was waiting to hear about the collapse and about those who have lost.
In Guyana, we are familiar with ‘box hand’. This has been a part of Guyanese culture for decades. A group of people would come together and they each would invest a certain amount of money weekly, bi-weekly or monthly, depending on the stipulations of the particular group. Each person gets a turn to withdraw the total amount when all the monies are combined for the particular week or month.
Many people have compared ‘gifting and blessing’ to box hand. But it is not exactly the same. While box hand is a set group of people, the fact that every person who is to invest in the ‘gifting and blessing’ circles must also introduce two people indicates a difference and as a result many have labeled them a pyramid scheme.
According to ag.ny.gov, ‘A pyramid scheme is a fraudulent system of making money based on recruiting an ever-increasing number of investors. The initial promoters recruit investors who in turn recruit more investors and so on. The scheme is called a pyramid because at each level the number of investors increases.’
It must also be noted that a pyramid scheme may or may not involve the sale of products or distributorships.
Ponzi scheme is another one we have been hearing about in Guyana. According to investopedia.com, ‘A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for early investors by acquiring new investors.’
Ponzi and pyramid schemes are quite similar. However, according to investopedia.com with the Ponzi scheme investors would give the money to a portfolio manager. When they are ready for their return, they would be paid with incoming funds contributed by later investors.
In a pyramid scheme, the initial schemer recruits other investors who in turn recruit other investors. Late joining investors pay the person who recruited them for the right to participate or sell a product.
Whether it is called ‘sou-sou, blessing or gifting, pyramid or Ponzi’ they all are risky, and people should be cautious about investing especially if they cannot afford to lose their money.
With the ‘blessing and gifting schemes,’ unfortunately, what I thought would happen has indeed already started. There are persons who have had to repay people they convinced to invest from their own funds because the leaders of their groups disappeared with the monies. People have asked to be reimbursed after not getting what they were promised at a certain time.
However, many groups are still active. While it might be tempting and yes, some people have and will receive what they are promised, such schemes are never permanent, and some people will always lose. One would be better off otherwise investing their money, whether by starting a small business or otherwise using one’s skills or talents.
Guyana is a place where most people need multiple streams of income if they want to live a life of financial freedom. Even though we might be employed we can create other ways of earning by using our skills and talents. Yes, it might be challenging, but we have the power to transform our lives if we truly desire to. A ‘blessing, gifting, Ponzi, pyramid, sou-sou or whatever name is not likely to transform our lives and lead to financial freedom. Well…maybe except for the masterminds behind it who often disappear with the funds.
The culture of box hand seems to have been working for decades in Guyana. Yes, there are instances when people would have scammed even in box hand, but it seems more of a sure thing to me than any of the new schemes in Guyana.
