Tag: Wisdom (page 1 of 3)

Problem Solver: How I Plan to Face Challenges From Now On

We all must make decisions.

Whether you’re an employee, a businessperson, or the CEO of the most powerful tech company in the world, you face problems every day that need solving.

Whether the issue is big or small, we all set goals for ourselves, face challenges, and strive to overcome them.

Fortunately, there’s a fundamental approach to solving these real-life problems, one that can consistently lead you to effective and satisfying solutions.

It may take a few days for a small problem, a couple of months for a life problem, or thousands of years for a cosmic problem, but there is never a problem that cannot be solved

– Dan Koe.

This means that rather than feeling as though your life is out of your control, you can take charge and shape the world around you.

Instead of being overwhelmed by the challenges you face every day, you can learn to enjoy them and overcome them.

This article is long because it serves as a comprehensive guide to problem-solving.

To fully digest this article, try this approach:

  • Read half of it now
  • Bookmark where you stopped
  • Set a phone reminder to finish it later

Now, let’s get started.

Why Most People Are Ineffective Problem Solvers

Several common attitudes can hinder effective problem-solving. And it is exhibited in these four characters. You might have met one or all of them when facing your challenges.

Person 1: Miss Give-Up

Miss Give-Up is the kind of person who gives up immediately whenever she faces even the smallest challenge.

She just sighs and says, “I’ll never be able to do that.” This does not mean that she couldn’t achieve things if he tried. Sometimes she has a great idea or notices a problem that can be fixed.

But Miss Give-Up is terrified of failing and having people laugh at her. Instead of speaking up or taking action, she sits around feeling sorry for herself.

Miss Give-Up can’t take control of her own life. She feels as though no one understands her, and she blames anything bad that happens on everybody else.

Repeatedly, she says the same kinds of things:

  • “I’ll never be able to do that. I’m just not that talented.”
  • “I’m not going to try. What if I fail? Everyone will make fun of me.”
  • “Nobody understands me. Nobody cares about me. Everybody is out to get me.”

Person 2: Mr. Fault Finder

Mr Fault Finder, on the other hand, is never afraid to speak up.

He is a professional critic. Whatever the plan, he is ready to point out the shortcomings and shoot down everyone else’s ideas. If someone tries something and fails, he’ll be the first to say, “I told you so.”

Mr Fault Finder is always eager to blame someone else whenever things go wrong.

He may have a lot to say about other people’s mistakes, but he never does much of anything himself.

Mr. Fault Finder says things like:

  • “Come on, I told you what you needed to do. Why can’t you get it done?”
  • “Well, that won’t work. What a stupid idea!”
  • “I told you that it would get screwed up. It’s all your fault.”

Person 3: Miss Big-Ideas

Mr. Fault Finder may be a big downer, but Miss Big-Ideas has her head stuck in the clouds.

She loves coming up with new ideas. But it rarely goes beyond that. She never bothers to figure out how to turn her ideas into real plans, and she doesn’t try to get anything done.

Miss Big-Ideas is satisfied just thinking about her great dreams. They’re always better in her head than they would be in reality, anyway.

Miss Big-Ideas has many audacious dreams – dreams that never seem to become realities:

  • “I want to write a novel!”
  • “Wouldn’t it be great if I started my own business?”
  • “I’m an ideas person. Don’t bother me with the tiny details!”

Person 4: Mr. Just-Do-It

Mr. Just-Do-It may not seem like a non-problem solver when you first meet him.

He’s not one to worry about problems or entertain negative thoughts. And when something goes wrong, he quickly jumps into action. His attitude is “I can’t change the past. But I can do something now.”

Mr. Just-Do-It’s tenacity and proactiveness are positive traits.

However, if he knew how to pause and think for a minute before rushing to execute, he would be able to achieve so much more. He also tends to blame every failure on a simple lack of effort and thinks any problem can be solved by trying harder.

When he makes up his mind about how to solve a problem, he refuses to change course. He’s not interested in seeking out the root cause of his problems or in considering alternative solutions. He just doesn’t realise that stopping to think can be just as important as taking action.

Mr. Just-Do-It can often be heard saying things like:

  • “I’ll never give up. I’ve got to overcome this challenge!”
  • “I know this will work if I just put in a little more effort.”
  • “Why stop to think? That’s just a waste of time. Everything is about execution!”

Are you one of these types?

Do you ever find yourself sighing and giving up?

Which do you think is easier? To criticise other people or try to do anything on your own?

Do you love to dream but hate to plan? Or do you attack problems head-on but fail to turn on the brakes when you aren’t getting anything done?

Most importantly, are you more like a problem solver?

The types of people when it comes to Solving Problems

Which one of these types do you want to be?

Essentials of The Problem Solver

The Problem solver has a real flair for setting goals and getting things accomplished.

By striking a balance between thinking and acting, they can accomplish amazing things. Problem solvers enjoy learning from their successes as well as from their failures.

The toolkit of a Problem solver includes identifying the root cause of a problem and setting specific goals. They have positive attitudes and stay focused on what can be changed rather than what has already happened.

The Problem solver comes up with specific action plans to fix their problems and then executes them right away. Once they act, they constantly monitor their own progress.

Problem-solving isn’t a talent that some people have and others don’t. It’s a habit. By developing the right skills and adopting the right attitude, anyone can become a problem-solver.

What is Problem Solving?

Problem solving is a process that can be broken down into four steps:

  1. Understand the current situation
  2. Identify the root cause of the problem
  3. Develop an effective action plan and
  4. Execute until the problem is solved, making modifications as necessary.

All you have to do is understand the situation, identify the root cause, develop an effective plan, and execute.

Even if the problem you face is big and complicated, if you learn how to break it down into smaller, manageable problems, you will be able to solve it.

Steps of Problem Solving

The Four Steps of an Effective Problem Solver

Once you learn the basic problem-solving approach, you can stop panicking and gain the confidence to solve any problems that you face in life, whether they are about work, business, or your personal life.

I will share some toolboxes that help you in each step of solving problems

PROBLEM-SOLVING TOOL-BOX: LOGIC TREE

A logic tree is a great tool to use when you solve problems. It’s a visual tool that helps when you are trying to identify all the potential root causes of a problem and generate a wide variety of solutions.

The key to making a useful logic tree is to break down a problem into categories without leaving anything out. And to group similar items under the same branch.

For example, here is how to use the logic tree to solve a problem like selecting a career path to take after undergraduate studies.

Logic Tree

Logic Tree: A Toolbox of a Problem Solver

It may take you a while to get the knack for making logic trees, but once you master it, it will help you to think beyond the initial spark of an idea and lead you to come up with new and effective solutions to your problems.

How to Identify Root Causes of Problems

Life is full of challenges.

You face obstacles as you try to accomplish your goals and dreams. Even the problems that pop up in your daily life can be overwhelming.

But that doesn’t mean you should just give up! Instead, try stepping back and figuring out the root cause of the problems and how you can overcome them.

And here are the steps to do it.

Step 1: Diagnose the situation and identify the root cause of the problem.

  1. List all the potential root causes of the problem.
  2. Develop a hypothesis for the likely root cause.
  3. Determine the analyses and information required to test the hypothesis.
  4. Analyze and identify the root cause.

Step 2: Develop the solution.

  1. Develop a wide variety of solutions to solve the problem.
  2. Prioritize actions.
  3. Develop an implementation plan.

PROBLEM-SOLVING TOOL-BOX: YES/NO TREE

You can use a yes/no tree to help you figure out a problem’s root cause or decide how to solve a problem.

To create one, you answer multiple yes/no questions. Write down a question and then consider whether a yes or no answer will lead to an explanation (a bucket) or another question.

Repeat this process for each further question until you’ve created buckets for all the possible explanations.

For the problem of selecting a career path to take after undergraduate studies, here is the yes/no tree for one of its potential solutions.

Yes/No Tree

Yes/No Tree

1B. Develop a Hypothesis for the Likely Root Cause

A hypothesis is a hunch. It’s what you think is the most likely explanation for your problem, but you haven’t yet confirmed it.

By determining your hypothesis and thinking through the reasoning that underlies it, you will be able to check whether it’s right.

From there, you can move on to making a sound decision that will lead to a productive solution.

1c. Determine the Analyses and Information Required to test the Hypothesis

This is where the information collection and analysis part of the problem-solving process comes into play.

You’re not collecting information just for the sake of collecting it or analysing it just for fun. You’re doing it to help you make better decisions.

Try to collect and analyse information efficiently and effectively. This will help you make better use of your limited time and resources.

PROBLEM-SOLVING TOOL-BOX: Problem-solving Design Plan

If you start collecting and analysing data without first clarifying the question you are trying to answer, you’re probably doing yourself more harm than good.

You’ll end up drowning in a flood of information and realise only later that most of that research was a waste of time.

To avoid this problem, you should develop a problem-solving design plan before you start chasing after information.

In the design plan, you clarify the issues you are trying to solve, state your current hypotheses and rationale, and list the analyses, actions, and information required to prove or disprove those hypotheses.

Developing this plan before you start researching will drastically increase your problem-solving productivity.

Here is an example of the design plan for the problem we have used as an example.

Design Plan

Design Plan: A Toolbox of a Problem Solver

Additionally, putting your plan down on paper will not only clarify your thoughts.

If you’re working in a group, this plan will also help your team focus on what needs to be done and provide the jumping-off point for your group brainstorming. You will be able to focus on only what you really need to know to decide.

When to Prioritize the Actions to take

Make the key criteria the potential impact of the action and its ease of implementation.

Rate the impact, from high to low, on the vertical axis. On the horizontal axis, plot the ease of implementation, from hard to easy.

The best solutions fall in the top right box, with high impact and easy implementation. The least effective solutions fall in the lower left box, with low impact and hard implementation.

Still on the problem of which career path to take immediately after school, here is what the matrix might look like when prioritising which actions to take.

Matrix

Then, You Develop an Implementation Plan

Your priority should be the actions in the top right box because their impact is high and the ease of implementation is easy. The next priorities are the actions in the top left or bottom right boxes. The least attractive are the ones in the bottom left box.

People have different strengths. You can accomplish more by collaborating with others who have strengths you may lack.

Your Goals and Achievements are Simply Problems that Need Solving

Problem solvers don’t just have big dreams; they go after their larger goals by breaking them down into smaller milestones.

They ask themselves, “What should I do this year, or in the next three months, or today?” These milestones guide problem solvers toward their dreams and help to keep them motivated.

Once they lay out a plan for achieving a dream, they then figure out the most effective way to achieve each smaller goal and to take the actions needed.

There’s a proven process for a problem solver for figuring out how to achieve such a goal.

  1. Set a clear goal.
  2. Determine the gap between the goal and the current situation.
  3. Form a hypothesis about how to close the gap and achieve the goal.
    1. List as many options and ideas as possible.
    2. Select the best ideas as the hypothesis.
  4. Check the hypothesis. Go back to step 3 if the hypothesis is disproved.
    1. Determine the analyses and information required to test the hypothesis.
    2. Analyze and develop an action plan.

Step 1: Set a Clear Goal

Bad examples of setting goals are “I want a laptop”; “buy a laptop.”

A good example is: “I want to buy a 700k used Dell laptop within six months without borrowing money from others.”

The first two examples are unclear. It doesn’t clearly state what you want, when you want it, or how you want to obtain it. In the third example, these details are clarified.

If you have specific conditions for achieving your goal, you should include them in the goal statement. The more specific the goal is, the more specific the action plan will be.

Whenever you set a goal, get into the habit of asking yourself,

  • What specifically do I want to achieve?
  • When do I want to achieve it?
  • What specific conditions do I have?

Step 2: Determine the Gap Between the Goal and Current Situation

Once you set a clear goal, you need to identify the gap between your goal and your current situation.

If the gap is small, the solution may be obvious. But if the gap is large, you may have to really think through how to achieve the goal.

Step 3: Form a Hypothesis

3A. List as many options and ideas to close the gap as possible

Take a moment to list a few ideas. Be as specific as possible.

What did you come up with? Were you able to think of a wide variety of ideas? Sometimes it’s hard to break out of your current way of thinking and come up with innovative ideas.

However, by using the logic tree, you will be able to come up with a wide variety of more specific ideas.

To make the tree grow vertically, repeatedly ask yourself, “Are there other ways of solving the problem?”

You can grow the tree horizontally by asking, “Specifically, how or what falls into this category?”

In this manner, you’ll end up developing a wide variety of specific ideas.

3B. Select the best ideas as your hypothesis

Once you create your logic tree, start to look for the best ideas so you can come up with a hypothesis for how you can close the identified gap.

You can cut a branch out of your logic tree if the idea is clearly not effective or feasible, or if it goes against your values.

When you set a clear hypothesis and rationale, you are more able to collect information and conduct analyses efficiently and discover if your hypothesis is true.

PROBLEM-SOLVING TOOL-BOX: Hypothesis Pyramid

The hypothesis pyramid is a great tool for structuring your argument.

Using it to clarify your conclusion and rationale before diving into data collection and analysis will improve your productivity dramatically.

It’s also useful for communicating your hypothesis to others. The basic structure places the conclusion or main message at the top and lists the supporting rationales on the bottom, like the supporting bricks of a pyramid.

There are two main types of hypothesis pyramid: the grouping structure and the argument structure.

The Problem

The answers using a Hypothesis Pyramid

Step 4: Check the hypothesis

4A: Determine the analysis and information required to test the hypothesis.

Once you come up with a hypothesis for how your will achieve your goal, your next step is to figure out what analyses and information will be required to test your hypothesis.

4B: Analyze and develop an Action Plan

The Most Critical Step is Execution.

You have worked all the way through the process from the beginning of this guide. You set a clear goal, figured out the gap between your goal and your current situation, formed hypotheses on how you could close that gap, and checked your hypotheses to make sure they would work.

Now you have reached the most critical step: execution.

The impact of your actions is determined by the following equation:

Impact = plan effectiveness x quality of execution

To achieve the most impact, you need to have an effective plan and great execution. If you have one but not the other, you won’t be able to reach your goal. You need both.

Once you have a concrete plan of action to achieve your goal, don’t forget to create a concrete schedule. Write down everything you are going to do, and when you plan to do it.

Remember to monitor your progress and revise your plan as necessary. Very few things in life ever go as perfectly as planned.

How to Correctly Weigh the Pros and Cons of Your Decisions

The Problem solver is a great decision-maker.

They rarely regret their choices because they take the time beforehand to consider all their options and figure out the best decision for them personally.

PROBLEM-SOLVING TOOL-BOX: Pros and Cons: Criteria and Evaluation

Two tools are very helpful when you need to evaluate multiple options and select the best one.

Tool 1: Pros and Cons

The first tool is called pros and cons. This tool helps you broaden your options and ensures that you consider both the good aspects (pros) and bad aspects (cons) before making a final decision.

Step 1: List All the Options

Step 2: List the Pros and Cons of Each of the Options

Next list all the pros and cons of each of the options. Even if you think a certain option is the most attractive, get into the habit of asking yourself, “Aren’t there negative aspects? Are there other positive aspects?”

We tend to be swayed by our first impressions.

If we first think something is attractive, we tend to try to collect evidence that supports that idea. On the other hand. if we think something is unattractive, we tend to highlight only its negative points.

It is critical to avoid this tendency to make a sound decision.

Step 3: Weight each of the positive and negative points you listed

Not all the arguments for or against each choice have the same importance. The next step is to assign a weight to each of the items.

Step 4: Select the Most Attractive Option

Tool 2: Criteria and Evaluation

The next tool is the criteria and evaluation. You can use this tool to clarify which criteria, or qualifications, you should use to evaluate your options and decide the importance of each set of criteria. and effectively evaluate your options.

  1. List All the Options
  2. List the Evaluation Criteria
  3. Decide the Degree of importance of each criterion

You can use three levels, like high, medium, and low, or you can use a 10-point scale.

Step 4: Evaluate Each Option Based on the Weighted Criteria

Step 5: Select the Most Attractive Option

Solving Problems Effectively Will Ultimately Change Your Life

Spend less time worrying about things and more time thinking about actions you can take to get closer to your goals, then actually take action. Be a problem solver.

Ask for advice. You don’t have to figure everything out on your own. Look for information to help you make the best decision in the given time.

Challenge your thinking processes and your conclusions.

Ask the following questions:

  • What are the pros and cons? Do I have the full list? Which option looks more attractive considering both the pros and the cons? Are the pros and cons really pros and cons? What actions could I take to enhance the pros and to minimize or eliminate the cons?
  • What are the specific criteria I should be using? Do I have the right ones? Am I weighing each criterion the right way?
  • Is my evaluation correct? What information am I basing my evaluation on? Is it accurate, up-to-date, and unbiased?
  • What actions could I take to improve the attractiveness of my options?

Problem-solving is easy when you know how to set a clear goal, figure out how to reach it, and follow through while reviewing your progress and making changes to your plan as necessary.

If you develop a habit of being a problem solver, you’ll be able to make the most of your talents and take control of your life.

You can solve not only your own problems, but the problems of your work, your business, and your community – and maybe even the world.

N.B: This article is largely inspired and takes a lot of its source material from the book, Problem Solving 101 by Ken Watanabe.

Whenever you’re ready, there are 3 ways I can help you:

  1. Become Your Highest Self: Every Sunday, I share actionable tips from successful people on how to master money, mindset and meaning. (Please confirm your subscription on the first mail received so the newsletter does not go to junk.)
  2. Fast Track Book: Stay relevant, master new skills, and be ready for whatever life throws at you.  This is the complete roadmap to speed up your learning process and expand the opportunities available to you. Available on Amazon.
  3. Personal Wealth Maximizer: Take control of your finances and build financial freedom. The Personal Wealth Maximizer give you the exact knowledge and tools to break free from money struggles and build financial confidence.

Technical Superiority: Why Intuition Can’t be Found in Books

If you think reading more or taking additional courses will give you all the answers, this story will change your mind.

In 2020, Netflix dropped a brilliant mini-series called The Queen’s Gambit, centred around a quiet but formidable orphan named Beth Harmon who rises through the male-dominated world of competitive chess.

An encyclopaedic knowledge of chess fuels Beth’s rise, yet she repeatedly faces moments where raw intellect isn’t enough.

In those moments, she doesn’t play the game by convention. Beth plays it by instinct.

And as she climbs the ladder, beating seasoned grandmasters in smoke-filled rooms with nothing but her calm glare and lightning mind, you realize something:

Beth isn’t just memorizing chess patterns. She’s seeing them.

In The Queen’s Gambit, Beth Harmon’s chess mastery did not come from memorization alone, but from moments where she closes her eyes and feels the board.

But there’s a painful story before she fully mastered chess.

The Short Story of Beth Harmon

You see, Beth was orphaned at a young age, after which she was placed in an institution where she first discovered chess.

Later, she was adopted by Alma Wheatley, a kind woman who recognized Beth’s extraordinary talent and supported her chess career despite knowing little about the game herself.

As Beth plays more professional chess, she begins to rely heavily on study and technical preparation, developing an obsessive relationship with perfection and channelling it to her games.

While Beth rises to the top of the chess world and reaps the financial benefits of her success, her performance worsens because of her increased dependency on drugs and alcohol.

However, Alma had been watching Beth’s journey and understood that true mastery required more than just technical knowledge. Or reliance on substances and alcohol abuse.

Alma had also learned something that all the chess books and training couldn’t teach and tried to pass this wisdom to Beth throughout their time together and this fell to deaf ears.

You see, Beth disregarded Alma because she didn’t really know much about chess.

But as Beth grew older and faced increasingly difficult opponents, she began to understand what Alma had been trying to tell her.  A full mastery of chess will only come from the source of technical superiority.

I will come back to technical superiority in a bit.

Eventually, as Beth faced increasingly sophisticated opponents, she discovered there was something missing from all her preparation. In her final breakthrough moment, Beth recalls Alma’s words which makes her rethink everything she thought she knew about mastery.

Her adoptive mother Alma, watching her obsess over strategy books, once told her: “Intuition can’t be found in books.”

Pause and let that sink in.

When its meaning dawns on you, keep reading.

Now let’s talk about technical superiority.

Technical Superiority

In football, technical superiority is what happens when a player has mastered the basics to such an elite level that they can create space and time out of thin air.

Regardless of pressure, system, or opponent, these football players execute the fundamental techniques of the game with precision, control, and consistency.

Technical superiority means having better ball mastery, allowing for more creative, efficient, and confident play than opponents.

The best football players in the world have this trait.

It’s why Messi can weave through defenders not just with speed but with minimal touches.

Technical superiority is why Iniesta always had three passing options even in a 2-square-meter box and dictated the pace of their football games.

It’s how Cristiano Ronaldo had a consistent ability to strike from distance or volley with both feet.

Technical superiority is not just about skill.

It means doing the basics so well that they become weapons.

It’s about that rare combination of feel, timing, and instinct that can’t be drilled into you.

You either sense the opening, or you don’t.

Now apply this to your life.

Think of the moments you got stuck in analysis paralysis because you didn’t trust your instincts.

The relationship you stayed too long in because the logic made sense… but your heart felt trapped.

The job offer you took because the pay was good… but your chest tightened every morning you had to show up.

How many times have you ignored the quiet whisper inside you because you couldn’t explain it yet?

How many times have you delayed the right move because you couldn’t find it in a manual, a course, or a quote from a Harvard business review article?

Apply Technical Superiority to your Life

 

Don’t confuse knowledge with knowing

We’ve been raised to believe that mastery is only acquired through accumulation.

Read more books.

Watch more tutorials.

Take one more course.

But the truth is… There comes a point when more information blinds you.

Where you’ve read so much theory you can’t hear your own thoughts.

You’re academically sound, yes… but spiritually deaf.

What Alma, Beth’s adoptive mother said wasn’t just a warning.

It was an alarm.

A code-red for the overeducated, overinformed generation who confuse knowledge with knowing.

Intuition can’t be found in books.

You can’t Google it.

You must live it.

You must sit with yourself in silence.

Feel your own patterns.

Watch your own mind.

And eventually, you’ll start to see the board.

Not the one they taught you in class.

The one that only your eyes can see.

And when you do…

You’ll stop playing by memory.

You’ll start playing by mastery.

This life is not a textbook.

It’s a chessboard. It’s a football game.

And no two games are ever the same.

Stop trying to memorize every outcome.

Instead, trust that feeling.

That strange but familiar sense that something is either deeply right or unmistakably off.

Train and hone this feeling by practicing what you have learned and consistently execution

The algorithm can’t teach you that.

Only you can.

Play Life to hone and master your technical superiority

So please, whatever story you’re living through right now…

Don’t search for all the answers on someone else’s page.

This is your move.

And now, once and for all, let the books serve their purpose and trust what they cannot teach.

Remember Alma’s words: “Intuition can’t be found in books.”

Now go show the world how your game is played.

Whenever you’re ready, there are 3 ways I can help you:

  1. Become Your Highest Self: Every Sunday, I share actionable tips from successful people on how to master money, mindset and meaning. Please confirm your subscription via mail so the newsletter goes straight into your inbox.
  2. Fast Track Book: Stay relevant, master new skills, and be ready for whatever life throws at you.  This is the complete roadmap to speed up your learning process and expand the opportunities available to you. Available on Amazon.
  3. Personal Wealth Maximizer: Take control of your finances and build financial freedom. The Personal Wealth Maximizer give you the exact knowledge and tools to break free from money struggles and build financial confidence.

Ponzi Schemes: Use This Checklist to Avoid Financial Ruin

Ponzi schemes keep leading people to financial ruin.

In April 2025, CryptoBridge Exchange, a fraudulent investment scheme known as CBEX, was believed to have bankrupted its believers and subscribers by 1.3 trillion naira.

Most people who did not join this scheme believed its participants were gullible and not street smart.

It reminded me of the previous Ponzi schemes I have been involved in, both the successful and the failed ones.

There are lessons to learn here. Please read to the end.

My First and Successful Experiences with Ponzi Schemes

In 2016, I invested money in MMM Nigeria.

I was still an undergraduate then. MMM Nigeria promised each investor a monthly return of 30% on their money. Their model was simple. You became a member of their forum by investing as little as 15,000 Naira. That money gets paid directly to another member. At the end of your 30-day cycle, you get paid by other members who recently registered.

On 13 December of that same yearthe scheme was frozen. Accounts blocked. And the founders disappeared without a trace.

This was my first experience with a Ponzi Scheme. But it was not my last. Other schemes (like Twinkas, Givers Forum and a few others) replicated this business model:

Invest and tell other people to invest on their platform. Get your returns on the same platform. Then the platform ‘crashes’ a few months later.

It was not one of my proudest moments participating in those Schemes. It was a ‘Rob Peter to Pay Peter’ type of investment. But the profits paid my bills and food while in the university.

The Ponzi Clock

The Ponzi Clock

What are Ponzi Schemes, and how do they work?

Imagine you have a Shop that sells Plantain chips.

People give you money to buy plantain to make more chips, so you can eventually give them back more money than they gave you.

That’s how a real business works!

Now, imagine a fake plantain chips shop run by a tricky person. This person tells people, “If you give me some money, I promise to give you back even MORE money very soon!”

But here’s the secret: this tricky person doesn’t sell any plantain chips or do any real work to make more money.

Instead, when the first people want their extra money back, the tricky person uses the money that NEW people give them to pay the first people.

It looks like everyone is making money, right?

The first people are happy because they got more money back, and they tell their friends to join in! So, more and more people give their money to the tricky person.

This is called a Ponzi Scheme.

It’s a big money game where the early players get paid with money from the later players.

A Ponzi scheme is a tricky scam where someone promises to give people a lot of money if they invest with them. But instead of really earning money, the scammer just uses new investors’ money to pay the old investors.

But here’s the problem: eventually, the tricky person runs out of new people to give money.

When that happens, there’s no more money to pay anyone, and the whole thing falls apart.

The tricky person often disappears with all the money, and most people lose everything they put in.

So, a Ponzi scheme is a fake way to make money that relies on tricking new people into giving money to pay off the old people. It’s not a real business, and it always ends with most people losing their money.

My Last Experience with Ponzi Schemes

In 2020, A friend introduced me to a Customs officer who was into “forex trading”.

The customs officer offered a 100% return in 90 Days with monthly payouts. I cannot remember the full details, but my friend was in his third month of investment and was about to withdraw his principal and reinvest only the profit earned.

My plan was simple.

I did not ask questions. I did not ask which trading strategies this customs officer/forex trader employed. All I wanted to do to earn a profit, recover my principal and keep “cashing out”

Long story short, I lost one-third of my money because the business stopped paying me in the third month.

I eventually discovered that the forex trading business was simply money invested in MBA Forex. This was a Ponzi Scheme that crashed in 2020, just like MMM in 2016. Same Script, different actors.

This was my last experience losing money to any Ponzi scheme, and I will tell you why.

The Risk is not in the investment. The Risk is in the investor

Two people invest in the same thing. This could be a stock, a business, crypto or even a Ponzi scheme.

One person learns first, stays calm, and invests wisely. The other just guesses, follows the crowd, and panics when things go down. The investment didn’t change — the people did.

Here is a breakdown of what happens.

Person number 1 does their homework. They learn about the company, understand what it does, and don’t put all their savings into just that one company. They’re careful and think long-term.

Person number 2 hears from a friend that this company is offering a profitable investment. They don’t know anything about the company, but they put all their money into it, hoping to get rich quickly. When the investment goes bust, this money is gone for good.

This was never about Ponzi Schemes.

The Risk is in the Investor

The Risk is in the Investor

Now, look at these other examples and their key lessons:

Example 1: The “Money Doubling” WhatsApp Group

Someone adds you to a group chat that promises to double your money in 48 hours. You see payment screenshots flying everywhere.

People are hyped. You send ₦50k, hoping to get ₦100k back.

In this scenario, Scammers create FOMO (Fear of Missing Out) to cloud your judgment. If it’s real, it will still be real tomorrow.

Key lesson: Never invest money based on urgency or pressure.

Example 2: The Pastor’s Investment Club

A trusted church leader promotes a “divinely inspired” investment opportunity. Because he’s respected, no one questions it.

People sell land, borrow money, and throw in their savings.

In this scenario, respect does not equal financial expertise. Always verify, not just believe.

Key lesson: Separate trust in people from trust in their financial recommendations.

Example 3: The Crypto Pump Group

You join a Telegram group where admins tell everyone to buy a certain coin. The price shoots up. You join in.

3 days later, the coin crashes. Admins vanish.

Key lesson: run away if you’re getting investment advice in emojis and hype language.

Stop ignoring the red flags of Ponzi schemes because you want ‘free money’

The Red Flags of Ponzi Schemes

The Red Flags of Ponzi Schemes

Risk comes from not knowing what you are doing – Warren Buffett.

The real risk isn’t the thing you put your money in. It’s how smart, prepared, and patient you are with it. A smart investor can do well even with a normal investment, while a risky investor can lose money even with something that seems safe.

The return of money is more important than the return on money.

When it comes to money, getting your original money back safely is the most important thing.

If you focus only on trying to make a lot of extra money (the return on money) very quickly, you will take bigger risks. These risks could lead to you losing all your original money (the return of money).

Think of it like this:

Getting your money back (return of money) is like making sure your house is safe and sound. Making extra money (return on money) is like adding cool decorations to your house.

Decorations are nice, but having a safe house to live in is way more important!

So, while making extra money is good, the first and most important thing when you invest or lend money is to make sure you’re going to get your original money back.

If you don’t get your original money back, then any potential extra money doesn’t even matter!

Smart Investing

Smart Investing

How to Avoid Financial Ruin with Ponzi Schemes (Or any Investment Opportunity)

After my lessons in 2016 and 2020, there are six questions I now ask before investing.

Before putting money into any opportunity, I now run through this checklist:

  1. Transparency Test: Can I easily understand how exactly this investment makes money?
  2. Expertise Verification: Do the people running this have verifiable credentials and experience?
  3. Regulation Check: Is this investment registered with and overseen by appropriate financial authorities?
  4. History Analysis: What is the track record of this investment or company beyond testimonials?
  5. Independent Verification: Can I find information about this opportunity from sources not connected to the people selling it?
  6. Withdrawal Clarity: How exactly can I get my money out, and are there any restrictions?

If I can’t get clear, satisfactory answers to ALL these questions, I don’t invest.

It’s as simple as that.

These principles extend far beyond just avoiding Ponzi schemes. The same critical thinking protects me from “Get rich quick” business opportunities, dubious crypto projects and even everyday purchasing decisions.

The Too Good to Be True Test

The Too Good to Be True Test

The discipline of questioning what seems too good to be true has become a valuable life skill, not just a financial one.

This is very important.

What if you’re currently in what might be a Ponzi scheme?

Don’t panic, but act quickly.

Stop adding any new money immediately. Try to withdraw your principal investment as soon as possible. Document everything too, from communications, promises, to payment histories.

Don’t let loyalty or hope delay your exit. Also, be prepared for the possibility that you may not recover everything.

What if you’re considering a new investment?

Apply the Questions Checklist above rigorously.

Then set a maximum amount you’re willing to risk. Ideally, this should be no more than 5% of your investment capital. Establish clear exit criteria before you enter and verify through multiple independent sources.

In the world of investment, boring is often beautiful. Consistent, modest returns from legitimate activities will build wealth far more reliably than chasing spectacular promises.

“Don’t be the fool who ‘cashes out’ others. Be the one who walks away with your dignity and your money.”

The most successful investors don’t need excitement – they need results.

I hope this helps.

Godspeed and Cheers.