What is a SWIFT Code? -Trinidad & Tobago

Woman sending money with phone

What is a SWIFT Code?

A SWIFT Code, also known as a BIC (Bank Identification code), provides a standard means for banks to be identified, and securely carry out financial transactions between them. Your bank’s SWIFT Code is registered by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). – https://wise.com/us/swift-codes

The Following are some SWIFT Codes for banks in Trinidad and Tobago:

Institution: First Citizens Bank Limited, Port of Spain

  • Address: 9 Queens Park East 
  • City: Port Of Spain
  • Country: Trinidad and Tobago

Institution: First Caribbean International Bank

  • Address: 74 Long Circular Road, Maraval
  • City: Port Of Spain
  • Country: Trinidad & Tobago

Institution: JMMB Bank Trinidad and Tobago, Chaguanas

  • Address: DSM Plaza, Old Southern Main Road
  • City: Chaguanas
  • Country: Trinidad & Tobago

Institution: RBC Royal Bank Limited

  • Address: St. Clair Place, 7-9 St. Clair Avenue
  • City: Port Of Spain
  • Country: Trinidad & Tobago

Institution: Republic Bank Limited

  • Address: Foreign Exchange Centre, 59 Independence Square
  • City: Port Of Spain
  • Country: Trinidad & Tobago

Institution: ScotiaBank Trinidad & Tobago

  • Address: Scotia Centre,Corner of  Park and Richmond Street
  • City: Port Of Spain
  • Country: Trinidad & Tobago

What is the difference: Assets & Liabilities

Pen with balance sheet. Suitable for accounting and finance concept

What is the difference between assets and liabilities?

Our assets are the items we hold that improve our economic advantage in the future by adding value to us. Our liabilities, on the other hand, are the items we possess that deduct value from us in order for us to keep them.


Assets include the following:

  • Cash
  • Investments
  • Insurance on Cash Investments (Savings)

  • Vehicles (For Business)

  • Real Estate (Making Money, example: Rent)

When you’re analyzing your assets, one thing to keep in mind is how liquid they are. The ease with which an asset (Investments) may be turned into cash when needed is referred to as liquidity. In the opposite situation, an asset is described as illiquid if it is difficult to convert it to cash in less than a year. For example, Real Estate may take longer to convert to cash than selling a vehicle.

For more information you can visit: https://www.investopedia.com/ask/answers/12/what-is-an-asset.asp  


Examples of liabilities:

  • Loan Debt
  • Mortgage Debt
  • Taxes

Your liabilities tend to be in two forms, your short-term and long-term liabilities. Short-term liabilities tend to be paid off inside of a year, such as a small loan. Your long-term liabilities will take a year or more to be settled and paid off. To understand in more detail, visit: https://www.investopedia.com/terms/l/liability.asp 

Being financially responsible entails having a firm understanding of your assets and your liabilities. This enables you to make more informed financial decisions. You can utilize all of our financial tools at The FinRoute to better understand how you manage your assets and obligations. 

Bank VS Bank – Credit Cards

Male hands holding credit cards, soft focus, Online shopping concept.

Bank Vs Bank – Credit Card Edition

Our banks will either issue us credit cards or we will look into acquiring credit cards for ourselves at some time. When it comes to picking a credit card, the most important thing to remember is to understand the card you’re applying for. Since not all banks are user-friendly, we’ve collected a list of cards offered by some of our banks, along with key information to consider. We’ll focus on entry-level cards for our comparisons because most banks provide a selection of cards with various interest rates and spending restrictions. In this post, we’ll delve deeper into four different banks: Scotiabank, Royal Bank of Canada, Republic Bank and First Citizens Bank are some of the most well-known banks in Trinidad & Tobago.

  • Scotiabank (Trinidad & Tobago)

In their Credit Card Rates & Fees section, Scotiabank provides seven (7) different Mastercards and two (2) different Visa cards. The Scotiabank Mastercard and Scotiabank Visa Classic are their basic Mastercard and Visa credit cards. Their stated Annual Interest Rates (AIR) range from 26.79 percent to 27.99 percent, implying monthly payments of 2.23 percent to 2.33 percent. They do, however, provide their Effective Annual Interest Rate (EAIR), which is more accurate because it indicates how much you would owe or pay after compounding. The EAIR for both their Scotiabank Mastercard and Scotiabank Visa Classic is between 30.34 percent and 31.88 percent, which means you’ll be paying more like 2.53 percent to 2.66 percent per month if you use them. 

The yearly membership cost for each of these cards is $165, which is the lowest of all card type membership fees throughout Scotia’s cards, which range from $165 to $625. It’s worth mentioning that most banks, including Bank Of America in the United States, do not charge such fees for similar card kinds.

Both cards come with a $100 late payment fee and a $100 Over Limit Charge fee (for each time you exceed your card limit). There are also Cash Advance Fees, which can be paid at an ATM or at a bank branch. Both cards have the same charge structure, which is 3% of the Advance Minimum ($50). This equates to a $4.50 minimum cost per cash advance, with the fee increasing in proportion to the size of the cash advance.

Both cards have a minimum payback requirement of 3% of the outstanding debt, or a flat fee of $25.

Then there are costs that most people aren’t aware of, which are as follows:

  • NSF Cheque Charge (Non-Sufficient Funds) – $50.00
  • Retrieval of Items – $60.00 
  • Replacement of additional Statement – $30
  • Replacement of Sales Draft – $60
  • Replacement of Damaged/Lost/Stolen Card – $100 for Mastercard and $75 for VISA
  • Royal Bank

Royal Bank gives us an array of RBC Caribbean – Credit Cards , let’s look at their VISA Classic International. Their Annual Membership fee for the VISA Classic Card is $165.00.

Their stated annual interest rate is 25.2% which brings their monthly interest rate to approximately 2.1%, which is lower than either of Scotia’s Card offers. What they don’t state however, are all the associated fees to go along with their card. Exact information such as:

  • Late Payment Fee
  • Overlimit Charge Fee
  • Cash Advance Fee
  • Minimum Repayment Value

Are all unavailable on their site and it must be noted, these are critical pieces of information for us to paint a good picture.

Let’s take a look at one of Royal Bank’s RBC Caribbean – Credit Cards, the VISA Classic International. The VISA Classic Card has an annual membership fee of $165.00.

Their claimed annual interest rate is 25.2 percent, which translates to a monthly rate of about 2.1 percent, which is lower than either of Scotia’s Card offers. What they don’t mention are all of the additional costs that come with their card. Information that is precise, such as:

* Late Fees 

* Overlimit Fees 

* Cash Advance Fees 

* Minimum Repayment Values

Are all inaccessible on their website, and it should be emphasized that they are crucial details for us to build a complete picture. 

  • Republic Bank

Republic Bank’s credit card rates and fees are laid out in an easy-to-understand manner. The Republic Bank International Visa Classic and Republic Bank International Mastercard Class credit cards will be the center of our attention. The yearly membership costs for both organizations are $25.75 USD ($172.00 TTD). It will cost you $5.75 USD ($38.5 TTD) to replace your card. In addition, they have a monthly interest rate of 2%. (24 percent Annually). Other significant fees to be aware of are:

* Over Limit Fee: 5% of the excess amount, with a minimum of $12 USD ($80.4 TTD).

* Late fees are 3.2 percent of the minimum payment, with a minimum of $10 USD ($68 TTD).

* Cash advance fee: 3.2 percent of the advance amount, with a $5 minimum charge.

* Cash advance fee: 3.2 percent of the advance amount, with a $5 USD ($25 TTD) minimum charge.

To obtain a list of additional costs associated with their cards, you must contact the bank directly.

  • First Citizens Bank

Approximately ten (10) different VISA credit cards are available from First Citizens Bank. Our focus is on their VISA Classic credit card, which is marketed as a basic credit card for establishing credit. It is the cheapest credit card to just own, with an annual fee of $145. They have a 2% interest rate published on a monthly basis (24 percent Annually). They haven’t provided any more information on their related costs, therefore we don’t have much to go on when evaluating their credit card quality.

Remember, when you look at which bank gives you financial goods and services that work best for you it is vital to take all the facts into account.


How Do Banks Make Money?

Open Vault at a Bank

How Do Banks Make Money

Our banks play a pivotal role in our everyday lives, allowing us to open accounts, holding our deposits, facilitating our withdrawals, granting various loans, transferring cash and enabling our financial transactions. Looking deeper, banks make their money through the phrase “ A penny lent is a penny received” and through charges and fees. Respectfully, “ A penny lent is a penny received” refers to customer deposits, packaging and distribution of loans and credit cards while charges and fees refers to account fees, late fees and credit card fees.


A penny received is a penny lent:


  • Deposits from customers (individuals and businesses) provide banks with the money they need to make loans.

  • The packaging and distribution of loans to clients is how commercial banks generate money. Banks make interest on the cash they distribute through offering loans such as mortgages, vehicle loans, business loans, and personal loans. 

  • Credit cards, like loans, allow banks to generate interest on basically revolving credit on customers.


Charges and Fees

Service and maintenance fees are another major source of revenue for your banks. These costs can take a variety of forms, including:

  • Account fees (monthly maintenance fees, minimum balance fees, overdraft fees, or non-sufficient funds penalties), and * Safe deposit box fees.
  • Late Costs – Many of the aforementioned loan packages include conditional fees if the organization receiving the loan fails to meet the contract’s conditions.
  • Credit Card Penalties — Missed or late payments on credit cards usually result in considerably higher late fees.

These are just a few of the ways your commercial banks profit on your money and spending patterns.

One simple take away from this, don’t give them more than they already get from you- so PAY YOUR LOANS AND CREDIT CARDS ON TIME. 

To learn more about how Banks make money, visit: https://www.investopedia.com/terms/c/commercialbank.asp 

7 Ways To Prepare for Retirement

Retirement Vacation Time

7 Ways To Prepare For Retirement 

We’ve simplified the process of planning for retirement. It is a frequent desire is to retire comfortably and early. Taking the first steps toward your goal in retirement doesn’t have to be difficult.

To get started, follow these seven basic steps: Getting a good start, making advance preparations Learning about your employer’s pension plan while not affecting your retirement money Two of the most essential things you can do to better your financial condition are repaying debt, increasing your net worth, and talking with financial professionals. TheFinRoute https://www.thefinroute.com/ makes connecting with experts who can guide you through all you need to know about retirement planning easier than ever before.

1. Make an Early Start

Decide how much money you want to put aside for retirement each month. This is distinct from your savings and should be completed prior to dealing with your costs (groceries, bills, etc.)

2. Plan Ahead

Retirement may be costly, especially if your income is limited. Knowing what you’ll need throughout your retirement years and planning ahead helps you to see what you’ll need to start saving for right now. Medical costs, travel costs, and housing costs must all be factored into your monthly expected and unexpected expenses in retirement.

3. Learn about your Employer’s pension plan

Be sure to verify whether you are qualified and registered in any pension plans offered by your employer. Make sure you know how the pension plan operates and what advantages you’ll receive. If you’re thinking about moving jobs, find out what happens to your pension benefits and what perks your new company offers. Finally, if you are married, make sure you are aware of the advantages provided by your spouse’s pension plan.

4. Don’t touch your retirement savings

If you take money out of a pension plan before retirement, you will not only lose the money you take out, but you will also lose out on the interest you should be earning as well as any tax advantages you may be entitled to. If you change jobs, roll your funds into your new retirement plan or, if you have the choice, leave them invested in the previous plan until you’re ready to retire.

5. Pay off your Debts

Paying off existing debts before retirement allows you to spend your money (even if it is reduced) on the things that are most important to you at the moment. In the long term, paying off a house or vehicle debt before retiring will benefit you.


6. Grow your net worth

Finding methods to invest your money (in a business, real estate, or the stock market) might help you increase your net worth and attain your retirement objectives sooner than you thought. Make sure you’re aware of the dangers associated with every investment you make and how much you’re prepared to sacrifice in exchange for a larger return.

7. Speak with Advisors

There will always be value in getting the guidance you require to attain your objectives. Make sure you can reach out to financial experts and learn more about what they have to offer. Work with the adviser who best matches your requirements to reach your retirement objectives.

For additional information on how to save for your retirement, check out https://money.usnews.com/money/retirement/401ks/articles/steps-to-take-when-preparing-for-retirement as well as https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf 

For more help on managing your finances and overall financial health, visit https://www.thefinroute.com/


How to Start Investing?

Start investing in the US stock market

“How to start investing” is a major and typical question when it comes to investing.
There are a few areas we should look at when you start your investing journey to make sure you’re on the correct track. Here are a few things to think about:

* Why are you investing?

* What should you do first?

* How much money do you put into investments?

* How much risk are you willing to take?

* What kind of investment should you make?

Investing your money is one of the most effective methods to increase your net worth and wealth. One of the secrets to good money management is to make your money work for you. To connect with experts who can help you along the way, visit https://www.thefinroute.com/.

1. Why are you investing?

Your initial response may be, “To make money,” but there is more to this topic that you must consider. Understanding WHY you are investing (for your future, to purchase a house, to pay for education, to provide stability for your family) is critical in deciding what sort of investments to make.

It also assists you in determining your risk tolerance (how much you are willing to lose). If you’re looking to make more money in the next two years so you can purchase a vehicle, you’ll make a different investment than if you’re looking to invest for your family’s future in the next 20 years. It’s just as essential to know why you’re investing as it is to know what you’re investing in.

2. What is the first step?

What matters is that you are financially prepared to invest your money.

Begin by ensuring that you have an emergency fund. This is money that you will set away from your investing funds. Investing in mutual funds, equities, real estate, or a company all carries risk. A decent emergency fund allows you to cover six (6) months of expenditures, but you don’t need to set aside this much money before you start investing; just enough to meet unanticipated needs if they arise (example: Vehicle repair, medical expense).

Once you’ve built up your emergency fund, make sure you pay off any high-interest debt you may have, such as credit cards or high-interest loans. If your investment yields 10% but your credit card interest rate is 18%, you will lose money paying off your creditors in the long term.

3.How much should you invest?

You don’t need a huge quantity of money to get started investing. There are a variety of alternatives accessible to all sorts of investors with varying amounts of money, ranging from $100 to $1,000,000. If you have $100 to $1000 to invest, there are a variety of choices available, including mutual funds and credit unions that sell shares in that price range. If you’re looking to invest between $50,000 and $100,000, there are asset management services that can help you make the most of the money you have. The most essential thing is to make sure you understand the investment you’re making or is being made for you.

4.What is your risk tolerance?

Risk tolerance refers to the amount of risk you’re prepared to take in order to make a profit. The majority of first-time investors make the mistake of focusing solely on the amount of money they can make. Experienced investors concentrate on determining how much they may lose and if the risk of loss is worth the investment.

Here’s an example:

Let’s assume a money manager A made 15% on his client’s stock portfolio, but the portfolio manager lost 5% on the road to earning his return. Portfolio Manager B, on the other hand, earned the same 20% return, but he lost 10% along the way. New investors may be solely concerned with the return and select Manager B, but a seasoned investor might select Manager A. Manager A was able to return 3X (15 percent return / 5% loss in the process = 3X) the amount of risk he took to obtain it, whereas Manager B was able to return 2X (20 percent return / 10% loss in the process = 2X) the amount of risk he took to get it.

Try to understand how much you can lose on each investment you make vs the possible return with this basic example. It’s known as the Reward to Risk Ratio. Possible Profit/Potential Loss Look for assets that are three times as risky as you are prepared to take.

Also, if you want to make it easier on yourself, simply ask yourself, “Am I prepared to lose this much money in order to get a return on my investment?” It has the potential to save you a lot of money.

5.What type of investment should you make?

Now that you know what to do first, why you are investing, your risk tolerance and how much you want to invest, you can look at the different types of investments (investment vehicles) available to you.  The following are four investing sectors worth learning about:

  • Stocks – Stocks are investments in other firms’ future earnings. When they succeed, you benefit as well.
  • Bonds – Companies and governments borrow money from you and repay you with interest. Bonds are a low-risk investment that investors should consider.
  • Index Funds – A mutual fund that allows investors to participate in the broad general market rather than a single stock inside the market.
  • ETFs (Exchange Traded Funds) – ETFs (Exchange Traded Funds) are similar to stocks in that they track a certain index, industry sector, commodity, or other asset that the investor wishes to invest in.

See the following sites for additional information on the many sorts of investments you may become involved with and select from:

Stocks:  https://www.investopedia.com/terms/s/stock.asp for further information.


Bonds : https://www.investopedia.com/terms/b/bond.asp

https://www.investopedia.com/terms/i/indexfund.asp Index

Fund: https://www.investopedia.com/terms/i/indexfund.asp


ETFs: https://www.investopedia.com/terms/e/etf.asp

Visit https://www.thefinroute.com/ for additional information, answers to financial questions, to connect with professionals, and to reach your financial objectives.

How To Budget My Money?

Family, domestic budget, economy and finances concept. Stressed young African-American couple workin

Creating a budget for your money is the foundation on which all other financial goals can be accomplished. To better understand what is a budget, check out https://www.investopedia.com/terms/b/budget.asp. Let’s take a look at how you can get started on budgeting to achieve your goals: 

Know your NET income, Record and Monitor your expenses, Outline the goals you want to achieve, Strategize, Monitor and Review your progress periodically and above all, Be Honest. 

Step 1: Know your NET Income

Take note of your income after all taxes and deductions such as National Insurance (NIS) contributions. Many people make the error of overestimating what they can do with their money by simply using their gross income as their financial spending power. Your final take home pay is where our focus is.

Step 2: Record and Monitor Your Expenses

Categorize your expenses between fixed and variable monthly expenses. Doing this will help you easily identify where and how your monthly income gets spent. Your rent, mortgage or loan repayments are examples of bills which should be fixed each month. Your variable expenses however such as, food, entertainment and gas will fluctuate based on what activities you plan to be involved in for the month. This is where the opportunities to cut back and adjust your expenses are.

Step 3:  Outline the goals you want to achieve

Outline what you want to accomplish in the short and long-term. Identifying and prioritizing your goals in advance make it that much easier to stick to any plans and strategies you create.  Short-term goals may include building your savings or planning for a vacation expense. Your long-term goals might include planning for retirement or purchasing a home and paying off a mortgage. Whatever your personal goals, here you can sift through your recorded income and expenses from step 2 and begin crafting a plan. This takes us to step four.

Step 4: Strategize

Now it’s time to create your personal budgeting strategy. After reviewing your variable and fixed expenses, you should have a map of how you’re expected to spend your money in the coming months. You are essentially using your past spending habits to predict your future spending habits. Now you will be able to decide where and how you want to make initial adjustments to your spending patterns and habits to boost areas of your budget such as savings to achieve your desired goals across time. Ensuring you differentiate your needs from your wants will play a significant role in helping to choose what items you can cut back on to boost your savings and by default help you reach your goals faster.

Step 5: Monitor and Review your progress periodically  

If you’re budgeting for 1 year, reviewing your progress every 2 or 3 months will help you monitor and maintain your course. If you have setbacks, you will be able to make adjustments to your budgeting strategy to get yourself back on course. Remember, you aren’t doing this aimlessly, there are goals you are aiming to achieve across time. For someone who has not had reason to budget before, making progress with your budgeting plan is more important than perfection. Part of this process is ensuring you know where you are relative to your outlined goals across time and making adjustments whenever you are out of alignment to get you back to where you need to be.

Step 6: Be Honest

Being honest about where you are and how disciplined you are will be the cornerstone of what you accomplish and how quickly you accomplish it. Being honest about what expenses are your wants and not needs will help you strategize better. Being honest about if you are keeping to your plan or not will help you readjust quickly when setbacks occur. Being honest will see you through to the end of your budgeting plans and get you to achieve any goal you set.


Budgeting is an excellent tool for managing your finances and mainly your monthly cash flow. Do not underestimate the power of developing your budgeting skills. If you need help getting started on achieving your goals, platforms such as https://www.thefinroute.com/  give you free access to financial advisors and more to get you on track to accomplishing your financial dreams. For more budgeting tips you can visit https://www.nerdwallet.com/article/finance/how-to-budget

How to register a business in Trinidad & Tobago?

Close-up Of A Person's Hand Stamping With Approved Stamp On Text Approved

Steps to Register Your Business

The process of registering your business in Trinidad & Tobago is facilitated by the Ministry of the Attorney General and Legal Affairs. After you’ve decided what kind of business you want to start, you’ll need to create a ttconnect ID and then finish the TTBizLink registration procedure.
Register for a TTconnect Account herehttps://www1.ttconnect.gov.tt/itim_expi/selfregister.jsp  
How to register for TTBizLinkhttps://www.ttbizlink.gov.tt/trade/tnt/html/HowToRegister.html 

Types of businesses to register:

  • Sole Trader
  • Partnership
  • Limited Liability Company
  • Non-Profit Company

To register your business/company, complete the procedures below using TTBizLink:


Log in to www.ttbizlink.gov.tt using your TTbizLink ID and password.


Subscribe to e-Company Registration by
selecting the e-company registration service from the Main TTBizLink Services
how to register a business - step 2


When you’re inside, To start the company registration procedure, go to ‘Name Search.’
how to register a business - step 3


Once the name you want is available, go to the ‘Name Reservation’ area, select ‘New Application’
How to register a business - step 4


Fill out the appropriate details and specify whether it is a Business or Company. Once all fields are completed click ‘Submit’.
how to register a business - step 5


To pay for your name reservation, go to the Companies Registry Payment Portal. To complete the payment, you’ll need your TTBizLink Application Reference Number and a valid credit card.


You will receive an email confirming the name reservation approval or denial and instructions on how to register/incorporate your business if approved.


Once your business name is approved, it is time to register! You must click ‘New Application’ in either the Business Registration (Sole Traders and Partnerships) OR Company Incorporation (limited liability firms) and fill out the relevant fields AND  make the relevant payments. 
how to register a business - step 8


You will receive an email confirming the approval of your Business Registration/Company Incorporation. To pay for a Business Registration/Company Incorporation, go to the Companies Registry Payment Portal. To complete the payment, you’ll need your TTBizLink Application Reference Number and a valid credit card. Sole trader businesses pay $350.TTD Limited Liability Corporations pay $520.TTD


After receiving notification through email or phone that your Company Incorporation/Business Registration Certificates are ready, you will be required to print the relevant documents to be submitted physically at the nearest Ministry of Legal Affairs office.

To visit the Ministry of Legal Affairs office schedule an appointment online using the Ministry of Attorney General and Legal Affairs’ Online Appointment System. To book an appointment visit https://appointments.gov.tt/
how to registered a business - step 10

Chequing vs Savings Account

cashier asks checking or savings

What is the difference between Checking and Saving Account?

When you use your LYNX card to make a payment, you’ll usually be asked, “Savings or Checking?” What’s the difference between these two accounts? Is there any advantage to having one or the other, or perhaps both?


Right now, your checking account is most likely your everyday ‘go to’ bank account for money. This is the account that you would typically use for day-to-day expenses like food, petrol, and entertainment. See https://www.nerdwallet.com/ca/banking/what-is-a-chequing-account for additional details. Simply put, this account will handle the majority of your transactions.


Your savings account, on the other hand, should be utilized to save money for the long run. This isn’t money you’d spend on a daily basis. This account serves as a safe haven for your money in the case of an emergency or if you wish to build up your savings for a specific financial goal. Savings accounts generally provide a greater interest rate on money stored in them than checking accounts. Some savings accounts also limit the number of withdrawals you may make, whereas a checking account allows you to do so. Visit https://www.investopedia.com/terms/s/savingsaccount.asp for additional information about savings accounts.

Despite the fact that they serve fundamentally distinct purposes, combining them may provide you an advantage over having one or the other. Having a checking and savings account can aid in the development of good money management practices. You may set up automatic transfers so that a part of your checking account deposits are automatically moved to your savings account. This allows you to distinguish between the money you intend to spend and the money you aim to save.

You will be able to structure your savings strategy depending on your projected monthly expenses if you use both accounts to your advantage. You have the option of spending the money you want and saving the money you require.

Sou-Sou vs Pyramid Scheme

Sou-Sou vs Pyramid Scheme

A Sou-sou is a group of people who agree to pool their financial resources, such as savings, by contributing to the pool on a regular basis. Pyramid schemes, on the other hand, take place when top-level members recruit new members who pay a fee up the chain.


A Sou-sou is a group of individuals who decide to pool their financial resources, such as savings, by making regular scheduled payments to the pool in an agreed-upon amount. These payments can be made once a week, twice a week, or once a month. The group’s pooled funds are subsequently distributed according to an agreed-upon schedule to each or selected members of the group. This distribution/payout plan is crucial because it guarantees that everyone in the organization gets their fair portion on time..

Pyramid Scheme

In a pyramid scheme, top-level members recruit new members who pay upfront fees to the people who enrolled them. New members will then recruit newer members, and a percentage of the fees they earn will be transferred up the chain as well. A pyramid scheme is a method of moving money from the bottom of an organization to the top.

Key Difference

The bulk of pyramid schemes make money through recruiting fees and rarely try to sell valuable goods or services. A real sou-sou, on the other hand, pools the funds of its members with a guaranteed agreed-upon payout schedule for each member, ensuring that everyone profits throughout the life of the sou-sou’s existence. 

Key Issue

Pyramid schemes aren’t meant to be long-term investments. It will only work if the bottom level (New Recruits) remains broader (in number) than the upper levels. The entire pyramid will collapse if the bottom level begins to decrease (fewer individuals are recruited). A pyramid cannot be sustained indefinitely or even for a long time due to simple mathematical rules. People who have donated their hard-earned money will eventually lose it somewhere along that pyramid.


Sou-Sou and pyramid schemes are not the same thing. You should take not of anyone who asks persons to join a program in which they must pay money and recruit others in order to earn money should be taken seriously. This is the most obvious indicator that you’ve been lured into a pyramid scheme that will eventually fail. Do your homework before entrusting your hard-earned money to a scheme you don’t completely comprehend.