Risks and Lessons of Investment

In the world of investment, success may require long-term accumulation, but failure often only takes a moment. Many people are immersed in the dividends of the era, yet overlook the potential risks.

Recently, a digital currency exchange has been exposed to a major crisis. The founder of the exchange announced that the platform's capital reserves cannot meet the users' withdrawal demands, involving amounts as high as hundreds of millions of dollars. This incident has caused significant losses for many investors.

Many victims have shared their experiences on social media. Some have invested all their savings, even going into debt, and now face the dilemma of selling their homes to repay the debts; others have lost their ten years of savings. It is lamentable that some victims had previously suffered in other financial explosions and are now hit hard again. It is reported that the maximum loss for a single investor has reached tens of millions.

These cases highlight the vulnerability of middle-class wealth. Many people consider themselves to be wealthy, but in reality, their savings are limited; a serious illness or a financial storm could put them in a difficult situation. They think they are engaging in value investing, but in fact, they are gambling; they pursue high returns, dreaming of financial freedom, only to become stepping stones for others to get rich.

In the unregulated digital currency market, some criminals exploit human weaknesses to design various scams. Here are a few common fraudulent tactics:

1. "Trading Mining" and High-Yield Wealth Management

A certain exchange has launched a so-called "trading mining" model, promising to return trading fees and share platform profits. This model is essentially a disguised ICO, where users exchange valuable Bitcoin for tokens issued by the platform. In the short term, this model attracted a large number of investors, and the platform's trading volume once led the world. However, this model is difficult to sustain, ultimately leading to a sharp decline in tokens and significant losses for many investors.

In addition, the platform has launched high-yield financial products with an annualized return rate of up to 18%. However, investigations have found that the platform's actual loan scale is far lower than the financial product balances, making it unable to generate sufficient returns to pay investors. This is reminiscent of many P2P platforms that have collapsed, essentially operating as a fund pool, and it is hard to escape the fate of eventual collapse.

2. Air Coin Bubble

Many investors are attracted by the myth of getting rich from ICOs in 2017, fantasizing about easily earning huge wealth. However, most cryptocurrency projects lack real value, and issuers can obtain large amounts of funds at almost zero cost. Investors who want to profit can only hope for new buyers to take over. Once the market cools down, holders often suffer significant losses.

3. High-Leverage Contract Trading

The leverage for digital currency contract trading can reach up to 100 times or even more, with extreme volatility. Many investors easily face liquidation under high leverage, resulting in heavy losses. Furthermore, some individuals have resorted to desperate measures due to significant losses.

These cases warn us that investment requires rational caution. Buffett once said: "No one wishes to become rich slowly." However, steady accumulation is often a reliable way to grow wealth. Buffett himself is an example, as 99% of his wealth was accumulated after the age of 50.

Life is like a marathon; the key is to find a track that suits you, recognize the boundaries of your abilities, and keep moving forward. At the same time, one must always remain vigilant to avoid losing everything due to a single mistake. In the current situation of slowing economic growth, a major error could make it difficult for one to make a comeback.

We should cherish everything we have, invest rationally, and not place our hopes on the fantasy of getting rich overnight. Only in this way can we move steadily forward in the uncertain world of investment.