Get-Rich-Quick Syndrome and Ponzi Scheme Investment Intention

Abstract

Ponzi Schemes represent deceptive online investment platforms that allure potential victims with exceptionally high returns. These schemes have inflicted significant financial losses on victims, leading to adverse repercussions on financial systems, especially in developing nations. Although victims may recognize signs of a Ponzi scheme, they often succumb to the allure of quick wealth, investing their money with the hope of substantial returns. This study investigated the correlation between the Get-Rich-Quick syndrome, risk appetite, financial knowledge, and investment intentions in Ponzi schemes in Nigeria. Using a structured questionnaire with simple random sampling, data was gathered from 368 past and current Ponzi scheme investors across Nigeria's six geopolitical zones. The results of Spearman rank correlation analysis indicate a strong positive correlation coefficient of 0.825 between the Get-Rich-Quick syndrome and investment intentions in Ponzi schemes. Conversely, there is a weak -0.198 negative relationships between the Get-Rich-Quick syndrome and risk appetite. Surprisingly, individual financial knowledge shows no significant correlation with Ponzi scheme investment intentions. The study concludes that Ponzi schemes may persist in Nigeria due to the prevalence of the Get-Rich-Quick syndrome, emphasizing the need for urgent economic development initiatives and policies encouraging legitimate business activities among young adults.