Ponzi Radar

What does 8% per month actually compound to?

Taken at face value and multiplied out, 8% per month is 152% a year. That is about 38.0x what you would get from a three-month Treasury bill that pays around 4% and a government-insured deposit around 3.5%. The arithmetic below assumes every payment arrives on time, which is the assumption that fails in practice, not the compounding.

What this rate means

A textbook scheme profile

Rates in this range do not describe investing, they describe a Ponzi structure: the payout schedule only clears while new deposits keep arriving.

Advertised rate 8% per month as promoters quote it
Compounded over a year 152% (1.0800) to the power of 12
Money doubles in 9 days at this rate, if it were real
$1,000 after one year $1,583.7T no fees, no tax, no missed payment
Payout owed on $1,000 $80.00 a month for the promise to hold, forever

8% per month, by starting amount

Held for$100 becomes$1,000 becomes$10,000 becomes
1 year$251.82$2.5K$25.2K
3 years$1.6K$16.0K$159.7K
5 years$10.1K$101.3K$1.0M
10 years$1.0M$10.3M$102.5M

Balance = principal x (1 + 8%) ^ periods, compounded every month.

8% per month against what is guaranteed

Reference levels: long-run approximations, October 2026. A multiple of "-" means the comparison does not apply.

Reference levelRateThis rate in multiples
Insured bank deposit (US, FDIC)3.5% a year (guaranteed)43.4x
3-month US Treasury bill4.0% a year (guaranteed)38.0x
US inflation (consumer prices)2.5% a year (not investable, measures erosion)60.7x
S&P 500, long-run average10.0% a year (not guaranteed to anyone)15.2x
Best long-run professional record (Buffett, decades)20.0% a year (not guaranteed to anyone)7.6x

The red line

A guaranteed return higher than a Treasury bill or an insured deposit cannot exist. Every dollar paid above the risk-free rate is paid for with risk, leverage, or other people's deposits. A published promise of a fixed return above the risk-free rate is the definition of a return trap.

No published entry on this register currently quotes a rate in this range. The arithmetic above still applies to any offer that does.

Questions about 8% per month

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