# Case: "just buy crypto" vs a regular plan > Leo's coin rose 300% last year, and a messenger "platform" promises 2% a week. Check the maths, spot the red flags of an investment scam and write Dana a dollar-cost averaging plan that survives a bad year. - Course: [Personal Finance: Budget, Safety Cushion, Debt and Investing](https://productovi.com/courses/personal-finance.md) - Module: How to invest without illusions? - Lesson 24/32, ~29 min - Source: https://productovi.com/courses/personal-finance/hot-tip-case ## A tip at lunch **Alex Tutor:** You're still helping Dana with her money. Over lunch at Klasna, Leo has a tip for her. **Leo:** Dana, I hear you're starting to invest. Skip the boring funds and just buy crypto. My coin went up 300% last year. Three hundred! **Dana:** And the same week a stranger in a messenger offered me a "platform" with 2% a week and a personal manager. Everyone seems to be getting rich except me. **Alex Tutor:** Two different things: a real but very volatile asset, and something that's likely not an investment at all. Let's start with Leo's coin. Last year's 300% is a fact about last year, not a forecast. **Alex Tutor:** Coins like that can also fall 75% in a year. Say 10,000 goes in, rises 300%, then falls 75%. Where does it end? > **Exercise:** 10,000 UAH goes into a coin. In year 1 it rises 300%; in year 2 it falls 75%. How much is there at the end of year 2? In UAH. ## Averages that lie **Leo:** Back to 10,000? But on average that's +112.5% a year! **Alex Tutor:** On paper. In the wallet: 10,000 → 40,000 → 10,000, zero growth after two years. The simple average flatters even more with big swings than with the share index. **Alex Tutor:** And people usually buy after the 300% year, when everyone is talking about it, so they catch the fall rather than the rise. **Leo:** Fine, fine. But some people did get rich. **Alex Tutor:** Some did; we hear about them. We don't hear from those who bought at the top. Now the messenger offer: 2% a week sounds modest. Compound it for a year. > **Exercise:** A platform promises 2% a week, reinvested every week. What does that come to **over a year** of 52 weeks? In %, rounded to the nearest whole percent. ## How to spot an investment scam **Dana:** 180% a year. That's more than Leo's coin on a good year, and "guaranteed". **Alex Tutor:** That alone answers it. Fake platforms follow a pattern: a stranger writes first, there's a "personal manager", the screen shows growing profit, a small first withdrawal works, then come bigger deposits and a "tax" or "fee" to take money out. **Alex Tutor:** Investment offers in messengers and social media are on the central bank's list of the most common fraud schemes, along with calls from a fake "bank security service". Payouts to early clients come from later clients' money: a **Ponzi scheme**. **Sofia:** And a licensed firm can be looked up in the regulator's register. A "manager" in a messenger can't. > **Exercise:** Which of these are **red flags** of a fake investment platform? Select all that apply. ## If money has already gone **Dana:** A neighbour of mine did send them money. Now they want a 15% "tax" before she can withdraw her "profit". **Alex Tutor:** That's the last stage of the pattern: the "tax" is just one more payment. She should stop paying, call her bank at once to block what can be blocked, and report it to the police on 102 and through the cyber police's online form. **Sofia:** Using the number on the back of her card, not one the "manager" sends. **Alex Tutor:** Yes. And no codes, card details or passwords to anyone, whoever they say they are. > **Exercise:** Dana's neighbour sent money to the platform, and now it demands a 15% "tax" before she can withdraw. What should she do **first**? ## Answering Leo, kindly **Leo:** OK, the messenger thing is a scam. But my coin is real. What's wrong with it? **Alex Tutor:** Nothing wrong with owning some, if it's money you can lose entirely. It's one asset with huge swings, not a plan. **Alex Tutor:** And as of September 2026 Ukraine has no crypto law in force: one was passed in 2022 but only starts working with tax rules that are still being debated. **Dana:** So if a crypto platform fails, there's no deposit fund behind me. **Alex Tutor:** Right. Leo will listen to numbers, not warnings. Give him a short, friendly reply. > **Exercise:** Write a short, friendly reply from Dana to Leo (2–3 sentences): why last year's 300% isn't a reason to put her plan into one coin, with one number, and what share of her money she'd allow for something like it. ## Dana's plan: dollar-cost averaging **Dana:** Now help me write my own plan. Something I'll stick to when Leo's coin doubles again, or when the index has a −28% year. **Alex Tutor:** Here's the regular plan from last lesson: 3,000 a month for twenty years, an assumed 5% a year above inflation before fees, at a 0.3% and a 2% fee. **Dataset (CSV):** [Dana's regular plan: 36,000 UAH a year for 20 years](https://productovi.com/datasets/personal-finance/hot-tip-case/fee-drag-20-years.csv) Assumed 5% a year above inflation before fees, in today's hryvnias; the fee is taken from the balance at the end of each year. An illustration, not a forecast or a promise. - `year`: Year 1–20 - `contributed_uah`: Total put in so far, UAH - `no_fee_uah`: Balance at year end with no fee, UAH - `fee_0_3_uah`: Balance with a 0.3% yearly fee, UAH - `fee_2_uah`: Balance with a 2% yearly fee, UAH **Alex Tutor:** This plan has a name: **dollar-cost averaging**, putting the same amount in on a schedule, whatever the price. After a −28% fall the same 3,000 buys about 39% more of the fund (1 ÷ 0.72 ≈ 1.39), so a bad year means cheaper buying, not a reason to stop. **Sofia:** And a rule for the exciting stuff, so it doesn't eat the plan. **Alex Tutor:** Yes: a small cap, money she can lose entirely, never from the emergency fund or the kitchen money, never borrowed. Plus her red-flag list and what she does in a bad year. > **Exercise:** Write Dana's one-page investing plan. > **Key ideas** > > - Last year's return is not a forecast: +300% then −75% averages +112.5% on paper and ends exactly where it began (10,000 → 40,000 → 10,000). > - "2% a week" compounds to about **180% a year**. High and guaranteed means the risk is hidden or the offer isn't real. > - Fake platforms follow a pattern: a stranger writes first, a "personal manager", fake profits, a small first payout, then bigger deposits and a "tax" to withdraw. Check firms in the regulator's register. > - If money has gone: stop paying, call the bank on the number on your card, report to 102 and the cyber police. Never share codes or card details. > - A plan beats a tip: **dollar-cost averaging**, regular buying of a broad, low-fee fund (3,000 a month → 1,205,453 after 20 years at an assumed 5% and a 0.3% fee), and a small capped amount for speculation that can be lost entirely. This is educational, not personal financial advice. **Alex Tutor:** That's the module: risk and return as a pair, spreading the risk, keeping the costs low, and a plan that ignores hot tips. Next module: protecting what you've built. - Previous lesson: [Expense ratio: what 2% a year costs](https://productovi.com/courses/personal-finance/fees-and-time.md) - Next lesson: [Insurance: big losses first](https://productovi.com/courses/personal-finance/insurance-big-losses-first.md) --- Productovi Learning. Free, no sign-up needed to read.