The Simple Math That Exposes Impossible Returns

Chapter 26 of Felix Bick’s How Not to Get Scammed by AI Trading Apps might be the single most immediately useful chapter in the entire book — because it gives readers a piece of simple math that can expose fraud in seconds.

Bick explains that compound interest math makes many advertised returns mathematically absurd once extended over realistic timeframes. A platform promising 1% daily returns implies annual returns exceeding 3,000% when compounded — a figure that would make the operator, within a few years, wealthier than any person in recorded history, a possibility regulators and financial mathematicians alike treat as definitionally implausible.

What makes this chapter especially valuable is Bick’s attention to more modest-sounding claims that still fail this test. A claim of “just 5% monthly” compounds to roughly 80% annually — a return that would place a fund among the greatest in financial history if sustained consistently, something no legitimate fund manager claims to guarantee in advance. This is the kind of claim that sounds reasonable on its face but collapses immediately under basic compounding math.

Bick’s recommendation is refreshingly concrete: before evaluating any other aspect of an investment opportunity, running the advertised return through basic compounding math over a three-to-five-year horizon is one of the fastest, most reliable ways to identify claims that are mathematically impossible to sustain, regardless of the underlying technology claimed to produce them.

This single technique — run the compounding math before doing anything else — is worth the price of the book on its own. It requires no special expertise, just a calculator and a few minutes, and it exposes an enormous share of fraudulent investment schemes almost instantly.

Felix Bick’s How Not to Get Scammed by AI Trading Apps is full of valuable frameworks, but this particular chapter offers one of the fastest, most broadly applicable tools in the entire book.