6 Types Of Investments That Will Make You Lose Money

Investing in Nigeria is not for the faint-hearted. Anything could go wrong, and this is made even worse with the poorly structured corporate and legal systems. 

If you want to invest your money in any business or investment scheme in Nigeria, then you should first invest in your financial education. This is not school talk. This has nothing to do with whether you studied business administration at the university or not. You have to invest in knowing the investment terrain in Nigeria and how it operates.

That said, it is very easy to lose your money while investing in Nigeria. So, the essence of this post is to bring to light some of the types of investments you should avoid as much as possible.

Remember, even though the goal of an investor is to make money, the priority is to keep your capital as safe and as liquid as possible.

Let’s take a look at some types of investments that will likely make you lose money in Nigeria and why you should avoid them.


High Yield Investment Programs (HYIP) are designed for the greedy investor. In practice, the investor that puts their money in HYIPs are those who are greedy, those who don’t have the financial intelligence to be investors, and those who don’t know the value of their capital.

A HYIP would usually prey on your need to make higher interest than normal. If banks give you 2% per month on your capital, a HYIP would offer you a whopping 20%.

But the most important thing to know is how to differentiate a HYIP from a legitimate investment vehicle.

First of all, most of the popular HYIPs in Nigeria are unregistered with the Securities Exchange Commission. In other words, investing with them is at your own risk. Little wonder these HYIPs would usually come with a caveat for investors to invest only the money they could afford to lose.

More so, if as a professional investor, you seek to hedge your capital against the risk of loss, there is no way to do so with a HYIP. This is because most HYIP do not carry any sort of insurance for investors. Likewise, no insurance firm would risk their reputation to insure a HYIP portfolio.

So, investing in HYIPs is akin to throwing your money into fire and hoping it comes back to you in multiples. What a way to invest your hard-earned money!

Money Doubling

In recent times, I’ve seen so-called investors willing to risk their capital just for the thrill of doubling it.

I daresay that the majority of the money doubling schemes in Nigeria are scams perpetrated by fraudsters and urchins in many nooks and crannies.

These schemes are usually done online, mostly via social media. 

I had a friend who was contacted via WhatsApp by a stranger claiming to be the investment manager of an unknown investment company. 

My friend’s inbox was quickly filled by testimonials from several could-be investors claiming to have made 100% of their investment back within 2 hours.

Thereafter, the sender asks my friend which of the investment plans he would like to invest in. Starting from 50k up to 200k, with varying returns.

This friend who I know is no pushover when it comes to managing money and investment quickly laughed off the idea and blocked this contact posing as an investment company.

For all it’s worth, we all know these money doubling schemes in Nigeria are as old as the banking industry. From the snake oil marketers at the Nigerian borders to the magic money men at Asaba head bridge.

The only thing that has changed is the use of the internet. With internet penetration gaining grounds in Nigeria, the more we will see some of these fraudulent schemes being rebranded and marketed online.

Financial Trading

Nothing amuses me more than seeing casuals trying to trade markets and competing with professional traders with years of experience.

And you know what? Only one result is guaranteed: loss of capital.

It beats my imagination that someone who happens to have a ton of money stashed somewhere would consider risking their money trying to predict markets they know nothing about or have no control over.

Financial trading could either be in the form of Forex trading or Stock trading. Both require a good foundation in trading specific markets, and years under tutelage to be able to make sound trading decisions.

If you want to invest in financial trading, then you’ll have to first invest in acquiring the needed knowledge and skill to do so.

But, since many investors today just want to throw their money somewhere and earn interest on it, it is advisable to avoid financial trading, unless you want to give your money to banks or other recognized financial trading houses.


This is the lowest form of investing that comes with the highest form of risk.

I always tell people that what most gambling companies sell isn’t just tickets. They sell HOPE.

Hope is the highest form of human motivation, and even a dying man would give all he has just to buy hope.

Thus, the type of investors who resort to gambling are mostly low-tier investors at the lower echelon of the socio-economic pyramid. 

These investors are not just investing the money they could afford to lose. They are not just investing their excess cash. Most probably, they are investing the last money in their wallets or even the cash supposed for their next meal.

They are forgoing their present needs to buy tickets that bring them hope. Something to hold on to in their wishful daydreaming. Something that at least takes their minds off the mess of their present economic situation.

Little wonder, gambling can be addictive and as well, destructive. That little dopamine rush that comes when they dream of having a winning ticket and living their best lives is too sweet not to go back to.

This is why I think gambling should be banned, or avoided at all cost. It is the most destructive way to invest because while losing money with other investment schemes could make you have a change of mind, gambling pulls you in the more and continues to burn your cash until you have nothing left.

Verdict: Avoid at all cost!

Cooperative Investments

To be honest, I hate cooperative investments.

You know why?

Because it doesn’t give me the kind of control and liquidity I desire for my investments. I crave control so much.

But first, what is Cooperative Investment?

Cooperative Investment is just another name for pooled investment. In other words, several people would pool their money together with the aim of investing in a desired opportunity.

This is good for raising capital for big projects and investing on a larger scale. This means that Cooperative Investments could help you invest in larger, more restricted investment portfolios along with others.

While this is good, I’ve found out that the decision making is usually slow and it is difficult to dissolve your own share of the capital without dissolving that of others. So, if other investors do want to dissolve their own share of a sinking investment, you can usually do nothing. 

So, this means that the risk that comes with the inexperience of some investors are shared with everyone in the pool, even those who are more experienced.

I’ve also found out that Cooperative Investments are misleading in nature. This is usually not clear to the investors, but I will explain.

Usually, the money raised in Cooperative Investments is huge. Astronomically huge. These Cooperatives could raise anywhere from 50 million or higher. Hence, the weight of the cash would usually convince the investors to invest in bigger, usually more risky opportunities.

I’ve seen situations of Cooperative Investments in properties, where the plan was to develop an estate for resale, but was unsuccessful. It then turns into an abandoned project where money is stuck, and the only way out is to take a loss.

But then, the only way to take a loss is to sell your own share of the investment. However, this is harder to do in practice. Like in the case of the estate development investment, If I no longer believe in the project and want to sell out my own share of the investment, there would be other investors who believe in the project and are willing to wait for years until the property appreciates. 

This puts an investor like me in a dilemma: Holding an investment I no longer believe in, that I have no control of, with no liquidity in sight.

This is why I prefer to invest alone in high-performing investment opportunities, but with the right control and liquidity in place. If the investment loses its sauce, I simply liquidate and zoom off.

Therefore, Cooperative Investments are too risky for me and many other savvy investors.

Cryptocurrency Schemes

I heard someone say, Cryptocurrency is the new GOLD.

That’s right. It’s a great store of value, with immense propensity for capital appreciation. And the king of them all: It’s as liquid as you would like. 

In simpler words, the crypto opportunity is huge even as it is still in its infancy.

But then, when an opportunity is huge and interesting, it attracts different kinds of players, even fraudsters.

While we’ve seen great businesses built on the blockchain, we’ve also seen many dubious schemes gaining grounds. Due to crypto transactions being almost untraceable, it is increasingly becoming the most preferred platform for many Nigerian fraudsters of today.

They are in different forms:

  • Cloned Crypto Wallets
  • Fraudulent Exchanges
  • Fraudulent Crypto Investments
  • Crypto MLM Schemes

Many of these Cryptocurrency opportunities have one theme in common: They target the short-term cryptocurrency investor. These types of investors are the most greedy, as all they want is capital gains in the short-term.

For the record, it’s important to know that cryptocurrency is not an investment opportunity. It never was, and it never will. Just like gold, while your capital could appreciate, the goal is to have a reliable store of value for your capital, against the inflation-infested banks of today.

So, the mindset of a crypto-holder should be: Where do I store money that is not currently in use or not needed in the near future? Not Where do I invest this money for higher return.

Two different mindsets, two different types of crypto-holders.

So, even though I hold cryptocurrency, I don’t consider it as an investment, and this mindset keeps me safe from the many fraudulent crypto schemes that are flying around. 


There are many other ways to lose your investment in Nigeria, but these are the most popular ones.

If you can avoid these 6 types of investments, you would have been better than 50% of investors today.

The growth of the internet does not mean that we all should be gullible and oblivious of the basics of investments. Rather, we should be able to find and access information faster to make better investment decisions.

Remember, your capital is your power. Don’t lose it so easily. Invest with the right information, invest with the right control in place, and invest wisely.




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