5 Great Books for Avoiding Investing Scams, Ponzi Schemes and Pyramid Schemes

Financial scams are all around us and now more than ever we are suspect to their enticing offers and promises of easy wealth. However, a simple investment in a little bit of reading would serve us right to better understanding this horrible situations before we are scammed out of our hard earned money. Use these five books to learn how to avoid scams in your investing, not get caught up on mutli-level marketing pyramid schemes and to avoid the most tempting desire, HYIPs.

Ponzi Schemes

False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes by Joyce Reynolds and Robert L. Fitzpatrick

If you are looking for a firm introduction and understanding to the growing problem of multi-level marketing schemes and direct selling in America, this book will show you everything to make sure you avoid it like the plague. The authors do an incredible job of illustrating real examples of how these individuals and companies coerce those out of a job or struggling to find work, into owning their own company.

These scammers use the American dream of free entreprise and owing your own business to get you to do their dirty work. Meanwhile, you pick up a measly amount of what’s left over in their profits.

You Can’t Cheat an Honest Man: How Ponzi Schemes and Pyramid Frauds Work…And Why They’re More Common Than Ever by James Walsh

If you’ve ever wondered about that weird email you got promising so many dollars for a simple favor or were excited to hear about guaranteed rates of return on investment this book is for you. Walsh provides an excellent discussion on the foundation of pyramid schemes and why we fall for them. The model is essential “robbing Peter to pay Paul.” Anyone who got in early gets paid (like Uinvest.com.ua) with money from people who join later on.

What I found really nice about this text is the effort the author makes in appealing to the emotional sense of the reader. The examples used will echo many examples you have experienced in real life.

Ponzi’s Scheme: The True Story of a Financial Legend by Mitchell Zuckoff

There’s a reason they call it a ‘Ponzi Scheme’ don’t ya know? This book chronicles the life and exploits of Charles Ponzi during the 1920’s. You will learn all about where the name came from and the original idea that sparked all of this deceit and investing trickery.

The reader is interesting drawn to Ponzi for his skill and ability to outwit others and their money but, realizes with great conviction the mess and madness that he helped create. He wasn’t the only one doing this, but sure made the last impact that would bring so many Bernie Maddoff’s after him.

How To Ride The Ponzi 101 by Cory Crabb, Jessie Zeller, Katie G

If you can’t beat ’em join ’em! Right? Well in the case of Ponzi Schemes, many of the early investors are paid first. As such, the others exhibit that those who do so can benefit from entering and exiting quickly. They look at how to find the next big scheme, dip in, create buzz, which turns into more investors and finally, how to get out before it’s too late. Is this morally right?

No! Is it legal? Probably not… But, this is an interesting look at the other side of things if you’ve ever fantasized about starting your own pyramid scheme or cashing in on one.

Robbing You With A Keyboard Instead Of A Gun: Cyber Crime – How They Do It by Lynn Edgington

This text is my favorite on the list because it addresses all of the issues listed above but, goes above and beyond by advising how to avoid all of these things in a holistic manner. All the other books do a better job about explaining their given take on scams and schemes, all the while providing excellent examples. This book illustrates how to take the examples and put preventative measures in place so that you are not the victim of investments scams.

Even if you are not an investor, this book is highly recommended for combating cyber crime and fraud.

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