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offshore investment

Discussion in 'General Investing Discussion' started by nforsa, 12th Nov, 2009.

  1. nforsa

    nforsa New Member

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    I have an offshore investment (Arbitrage Trading) in Belize which I am starting to get weekly money from. Do I have to declare this and pay TAX:mad: on it:confused:
     
  2. Young Gun

    Young Gun Guest

  3. nforsa

    nforsa New Member

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    I know of the term ponzi scheme

    But I really do think this is a genuine... it has been online for 3 years now and a good friend of mine has been with it for over a year and he has gained his principal investment back 2 times over...I haven't seen or heard one bad thing about them like other HYIP's but then I don't think they are even in that bracket.
    Gold Nugget Invest (GNI) is the name if you would like to look it up :)
    "mcowan" is my ref if you are sold and decide to join up as well, lol :D

    Plus I don't fully understand your answer lets say I am not the most clued up person with tax and stuff

    chances are you are invested in a ponzi scheme so the money you are receiving is just a return of capital therefore no tax payable.

    but thanks for your reply...
     
  4. nforsa

    nforsa New Member

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    oh yeh it is going private come first quarter 2010
     
  5. Young Gun

    Young Gun Guest

    Sorry mate I was being a smart a**! If its a ponzi scheme (which I strongly suggest it is) the return you would be receiving is actually part of the capital you or someone else invested. I.e. if you "invested" $1,000 and got $100 back per month. This $100 would actually be apart of your initial investment (or someone else’s). So essentially they are just giving you back your cash. They'll continue to do this until there are no new investors pumping in new cash. This can last years and years, you may even make a profit but eventually it will end in a very ugly fashion.

    I’d strongly advise you to withdrawal all you cash and count yourself lucky. Just think Bernie Madoff………….

    They lure people in by paying out on small investments, so you’ll stick in $100, $1,000 to begin with and they’ll actually make payments as promised. Eventually you’ll gain confidence in them and stick in a large amount of cash and then the trap will snap and you’ve lost everything.

    These schemes or “investments” are just money laundering operations often run the Russian mafia.

    They’ll promise risk free returns of like 6% a week. 6% a week is incredible but far from reality $1,000 compounded at 6% per week after 7 years would be worth $2,053,801,266,978!!!!!!!!!!

    This isn’t an investment it’s a scam, when it goes private that means they pack up their suitcases full of money and disappear.

    You’ve been warned. Trust me I’m trying to do you a massive favour.

    If you don’t believe me, please send me $50,000 as you’ve won $100 Million in a Nigerian lottery. I just need this amount to pay the handling fee on such a large amount… :)
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I Googled some of this info and couldn't believe some of the information I came across out there including eBooks on "how to profit by participating in ponzi schemes". They actually recognise that these things are ponzi schemes (I'm not sure if they realise they are illegal), and put their money into them anyway.

    I guess they understand that there's (almost) always a bigger sucker out there willing to fork over their money.

    I also don't get excited about the returns people claim they get ... "I put in $1,000 and got a compound return of x% blah blah". $1000 ? Give me a break. There's no risk there. Try investing $1,000,000 or more and then tell me where you got your good returns from. Take on some real risk (and manage that risk!) and then I'll pay attention.
     
  7. Young Gun

    Young Gun Guest

    straight from that link above:


    One of the simplest, yet most effective scams perpetrated on unsuspecting investors for many years have been Ponzi schemes.

    In these schemes the promoter promises investors a very high return on their investment and says it is secure.

    Part of the money deposited by early investors is then used to pay their first dividend cheques or interest. The victims are more than happy to get high dividends. These schemes only require a few people in their early stages to be successful. The swindler continues paying them dividends for a couple of months until they are more comfortable with their investments, and decide to invest more.

    They then begin to urge their friends and relatives to invest as well. Soon, there is a steady flow of funds into the scheme, and the number of investors grows.

    If the swindler is disciplined about how much money is left in the account to pay "dividends", the scam can go on for many years. Theoretically, if the scheme continues to draw in new investors, it could go on indefinitely. In practice such schemes usually fall over because the promoter starts to spend the money too quickly, or the pool of investors starts to dry up.
     
    Last edited by a moderator: 5th Dec, 2009
  8. AsxBroker

    AsxBroker Well-Known Member

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    How long did Bernard Madoff scam his clients for?

    Many decades...
     
  9. EMP

    EMP Active Member

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    Somewhat off-topic, but this brings up an interesting question. Obviously, it's illegal to run a Ponzi scheme, but is it illegal to knowingly put money into one? And legalities aside, is it unethical?

    To play the Devil's Advocate here, let's say that you're not involved in organizing the scheme in any way and you never encourage anyone to invest in it. All you do is invest in it yourself, but you do so knowing (or strongly suspecting) that it's a Ponzi scheme. This is not unlike trading in the futures or options market. In both cases it's a negative sum game (after the money taken out by brokers/scammers). In both cases everyone in the "game" takes money from others in the game, so for some to win others must lose. Some "players" may have a better understanding of the game than others and they're likely to be more successful, but the information available to all players is the same and in that sense the game is "fair" - some just research it more thoroughly and analyse it more deeply than others. From the point of view of ethics, what's the difference? (Again, I'm talking about participating in a Ponzi, not running one, which would of course involve lying to people.)