I read with a mixture of horror and sympathy for the victims of the latest Ponzi scheme gone bad in town.

Last week a company, Global Cryptocurrencies Ltd, collapsed and along with it went billions of shillings, by police estimates, of their clients’ money.

The company working out of an obscure office on Namirembe road, managed to rope in all manner of clients with the promise of magical returns – 40% a week! I have been in business for most of my life, if I could be guaranteed 40% week I would sell everything I own and jump in with both feet.

Or maybe not. And this is why.

They say if anything is too good to be true, it is. If you can get an annual return of 40% on your investment you will be doing extremely well. So if you put in a million shillings in your business and walk away at the end of the year with sh400,000 after taxes you have found a good thing, and I would like to be your friend.

I have seen my share of scam artists and con men. Below are my fast and ready rules of separating the wheat from the chaff.

"The first red flag is often the rate of return the promoters are promising. Normal businesses return half or less in a year what the Global Cryptocurrencies were promising in a week. So if someone offers you a deal of even one percent a week or about 52% a year, which could also add up to 67% year if the return is compounded. That should be you first red flag..."

But assuming the promoter has such a smooth tongue and you listen to him past this first hurdle, find out how they hope to make those returns.

So for example he might tell you he is going to get sugar at a very low price, say sh1000 a kilo, sell it to the shops for sh3000 a kilo. The promise being that you will share the sh2000 profit. If you are a good negotiator you could probably split it 70% to you and leave them 30%, after all you are carrying all the risk. Meaning your share of the profit would be sh1400 on every kilo.

First off you need to determine the source of that cheap sugar. Is it legal? It’s a rule of thumb that high returns come from high risk and what is riskier than engaging in criminal activity?

If by some miracle you are still around, you haven’t run a mile from these snake oil salesmen, try to find out about them – who they are, who knows them, who do you trust who can vouch for them. Look beyond their sharp suits – they are often well turned out, foreign accents and big spending ways.

"It is safe to say, there is a scam going on everyday somewhere around us. The promoters of these scams prey on our belief in fairy tales, about how tons of money can be made with little upfront payment, quickly and with no effort...."

We are seduced by tales of going underwater or sacrifices to the gods to explain how such, such and the other made it.

“Remember him?” they ask “He used to be with us and then suddenly he was rich... He banged a deal …. Black dollars ….”

Often times when you see a genuinely rich person, you are looking at the finished product. You should be asking about their story, how long it took to get to where they are, what they did, their struggles, sleepless nghts and the days without food they had to endure before they made it.

Money has its rules and these often entail hard work, financial discipline – don’t spend more than you earn and tipper fulls of patience and perseverance.

If you take nothing else from the above know this, there are no shortcuts. Anyone offering you a short cut to wealth and fame, is taking you for a ride and you best turn them a deaf ear. Better still run for the hills and as far from them as possible.