Do not bet your underwear money if you are afraid of walking naked

I am a firm believer that, in a free capitalist society, fools have a right to be separated from their money. I speak from painful personal experience.
My brother and I, then gently knocking on the door of adolescence, received a cash windfall from a relative for the express purpose of buying swimming costumes. Those days, such frilly things as swimming costumes could only be found in Owino Market, a leisurely hour stroll from our digs. So off we went.

Near the hustle and bustle of the market, we came across an animated small crowd and drew closer. There was a man sitting on the ground with three overturned cups ahead of him. He kept sliding the cups around then opening one at a time to reveal a small red ball and two black balls hidden under the cup.
After sliding the cups around to create sufficient confusion as to which ball was under which cup, he’d invite passers-by to bet on the cup. If you got it right, he doubled your money. As we watched, a man in the small crowd stepped forward, watched the back-and-forth sliding intently, and then placed his ante on one of the cups.

The croupier – if the word could be used loosely – then lifted the cup to reveal the red ball underneath. A cheer went through the small crowd as money was counted out and handed to the punter. Big brother and I glanced at one another. He was thinking what I was thinking; not only could we obtain the aforementioned swimming costumes, there were many more wares and manufactures we could avail ourselves from the market. All we had to do was watch closely, and then bet the house.
I – the designated fund manager – stepped forward. The croupier lifted the cups to reveal the red ball, and then covered it again. My eyes locked on the cup from which our joy and financial reward would soon runneth over. He swung the covered cups around several times then let them stand. I leaned forward and placed our investment portfolio on the cup with the red ball.

With a swift movement, the croupier lifted the cup and revealed the ball underneath. It was a black ball. A gasp escaped from the small crowd as I felt a sinking feeling wash over me. Involuntarily, we both reached towards the man to stop him from pocketing our money that he already had in his hands, but he stood up, gathered his paraphernalia and, followed by the previous ‘winner’ who was by now clearly just an accomplice, walked to find a new spot.
He then uttered, “mwagala tulemesa kunywa butunda?” or something like ‘do you want to deny us the fruits of our capitalist labour?’ as they disappeared down the alley to find new unsuspecting victims. We love to laugh about this story, but it wasn’t funny and it kept us both away from learning how to swim as kids!

But it taught us a lifelong lesson: If it is too good to be true, it probably is. So when, every year or so, a ponzi scheme is uncovered around these parts, I am not to be found among those commiserating with the victims. In fact, it is one of those things that I think the government and the police have no business investigating.
See, if I order 100 bricks and someone delivers 80 that person has defrauded me of 20 bricks, which the authorities and the law ought to help me collect. Same thing if I buy prescription goods over the counter and discover they are expired, or mere placebos.

But if someone comes to me and says he can guarantee a 40 per cent return on my investment per month and I then proceed to handover my lifesavings to that person, I should be allowed to pay the penalty for my greed and stupidity.
The rule of thumb is that the higher the promised return on an investment, the higher the risk. Buying a plot of land, as long as the title is good, should be safer than buying cattle, which could be stolen or wiped out by disease, right?

Someone opting for the boring, low-risk, low-return option of keeping cash in a bank savings account will earn less than five per cent and can only be compensated up to Shs10 million if the bank goes under. Someone who takes that money and hands it to a guy in the pub promising a 480 per cent annualised return should consider it a very risky investment gone bad, not fraud.
If you are willing to bet your underwear money on a game of chance, you should be prepared to walk naked when you lose.