For as long as there is no knowledge, his people will perish. This applies to so many aspect of our lives. From our health ( especially in the times of Corona), to our spiritual journeys ( in the time of mushrooming churches) to our finances in the economic crises. What will save you in these times is knowledge. Unfortunately, this is a journey you should embark on your own, by own will.
The recent stokvel to Namibia is one of many that has left people confused. Not so long after my Life change 24/7 came Namib dream network and people still fell for the trap. The idea of making quick money from just recruit somewhat seem to be appealing to many. Others even after finding out that the transactions that they are engaging in are illegal, still rationalize continuing to recruit others on the basis that they are would like to recoup their investment. This I find very sad.
So For those that do not know the difference, here it is:
A Stokvel is a group of people that save/pool agreed amount together at agreed interval. This can be in form of monthly, quarterly or bi- annually contributions. The group has full control on how they would like their money to be paid with the most common method being monthly payouts being rotated to a member or annual distribution in equal portion to the members.
The aim of the Stokvel is to have a group of people that give you financial support. The rules of the group are commonly set up in a way that everyone benefit equally. Take an example of 4 friends all contributing N$200 each on a monthly basis. They can decide that on a monthly basis, one member will get N$ 800 on a rotational basis such that comes at the end of the year, each member would have had a chance to receive N$2 400 at the end on the year ( $800 for 3 months). The members could also wait until the end of the year and do a once off payment of N$2400 to each member.
The benefit of the Stokvel is that it allows you to have lumpsum at regular interval. So if you maybe have months where your expenses are higher than normal, e.g months where you will need to renew your car disc, it might help you to do it in the months when you are receiving a payout. This will ensure that you have the support you need for your budget to still work if you live on a tight budget.
Contrast this to a pyramid scheme. The basis of it is sustained by recruiting people to keep liquidity coming in. New members must join in order to allow old members to be paid. For you to increase your chance of getting a payout, you need to recruit in people. Once this chain is broke, your chance of getting paid is minimal.
To get people in this trap, they payout is given to the early bloomers. Those early bloomers than incentivize others by showing off their pay. The return on investment is almost used as a trap for the new comers but once the product becomes known to everyone, liquidity dries up and the late comers do not get a payout.
These sort of schemes are illegal and can land you in jail with a heavy penalty. So they generally do not last long before they are shut down by authorities.
In summary before you join anything people, do ask around. Stokvel are legal, pyramid schemes are illegal. If anyone is asking you for a joining fee and it requires you to recruit others without offering any tangible products or service offering, please do me a favor and run.