How I Fell For A Ponzi Scheme

My friend Gerhard said I should meet Daryl Klein. But I didn’t want to. Gerhard had invested money with Daryl, who promised returns of 54 percent per year. As a 28 year old, I had been investing for about 9 years. I wasn’t a smart investor. But I was smart enough to know that 54 percent was like the promise of a mermaid in a local swimming pool.
Gerhard invested about $50,000 in Daryl’s company, KleinCorp. Every month, he received 4.5 percent interest directly into his savings account. That was $2,250 a month. After the first year, Gerhard added another $30,000. KleinCorp then boosted Gerhard’s income to $3,600 a month. My friend earned $43,200 in interest every year.
He traveled the world on that income, riding his bike in Thailand and Laos, touring Australia and Hawaii. Year-after-year, he earned $43,200 in interest. He kept saying, “Andrew, you could make a lot of money investing with this guy.” But I still didn’t believe mermaids swam in pools.
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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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