This is a translation of the original article located here:
https://bitcointalksearch.org/topic/m.47345560Friends, let me tell you about one amazing rule that will allow you to save a lot of money. Now on the forum there are unpleasant trowels about trust managers who have been turned into fraudsters. It pushed me to share my thoughts. Please do not take this as a desire to teach you life. This is not true. I will simply tell what I adhere to myself and hope that this will help you too. So let's formulate this most important rule:
If someone offers you to invest in something profitable and at the same time offers a fixed percentage of profit per month (especially, and especially if this percentage is significant), then you have a fraudster. Stay away from him
No one will ever be able to provide you with a fixed percentage of profit per month for any substantial long-term period. No one, never for anything. Is that the Lord God, but he is unlikely to do it). You may have a reasonable question: "Why?"
There are many reasons here. I do not know them all, but I will give only those that seem reasonable to me.
1. Markets are constantly changing. They change in such a way that the profit can get a minority to the detriment of the majority. And the minority is constantly changing. This does not mean that you cannot be successful in the long run. You can. But in the short term ALL traders periodically either sit in drawdowns or in losses. And sooner or later it can be so serious that such grief - the ruler of other people's money simply cannot physically pay the declared interest to its depositors. In this case, scam comes and sobering.
2. Argument from the contrary. Imagine the impossible. What really is a miracle on earth is a trader capable of consistently making at least 10 percent of profit per month on any long-term basis. I hasten to convince you that such a genius of trade trustees of their funds are not needed. Using even quite an average initial deposit of, say, a couple of thousand US dollars, this wizard of the market can make a fantastic fortune in a reasonable time. Which will suffice not only to him until the end of his life, but his great-grandchildren will remain. It's all about the so-called compound interest.
The formula of compound interest is googled in a couple of minutes. We take a calculator and count.
Here is the compound percentage formula for our rule:
X (1+ (Y% / 100)) to the power n
where x is the initial deposit amount, Y% is the monthly interest rate in percent, n is the deposit term in months.
Suppose the initial deposit amount is $ 2,000. Percentage per month promised to you - 10. Contribution - 12 months. How much will we get from such trading in a year?
We consider: 2000 (1+ (10/100) and we build all this to the 12th degree (!!!). It turns out: ~ 6276.85. Not enough?
And where are we to hurry? Wait, do not rush, everything is still ahead, we are a miracle - traders and do not forget that we are starting from a relatively modest amount, but we have already done roughly X 3.13 in a year. Let's look at how much our capital will grow in the following years:
The second year_6276 X 3.13 = 19643, 88. Not bad at all, right?
Third year: 61485 (here I’ll further round the numbers, removing the values after the comma, so the real numbers will be even higher)
Fourth: 192449
Fifth: 602365
Sixth: 1885404. As we see our miracle - the trader has exceeded one million in just the sixth year of trading. Once again I ask: why should he mess with depositors? Well, okay, let's go on.
Seventh: 5901317.
Eighth:> 18,000,000
/// /// /// ///
In a couple of years there will be a billion, and a trillion dollars this trader will earn within fifteen years. Further consider not see the point. I think from the forum bitcointower, he will leave much earlier)
This will help but I guess I won't be doing so because of a lot of computations to be followed. This rule may be a good one yet, I will be sticking to what I have already been doing in my investments.