RSS
Home
High yield = high risk (especially in Ponzi schemes)
Print
Email
RSS
Subscribe
Definition of Ponzi Scheme: Where dividends/profits paid to investors is money from new investors. Many are left holding the empty bag..jpg)
(Note: While still a scam, pyramid schemes typically inform investors upfront that their return depends on recruiting new investors. The classic Ponzi scheme does not.)
The Ponzi scheme (employed by Kirk Wright) is one of the most insidious investment con games, ensnaring wealthy and financially struggling, retirement savings and inheritances, young and old. How has it endured for over a hundred years, beginning even before its namesake? Many scammer avoidance rules don't apply.
Scammer avoidance rules | How Ponzi scams subvert them |
Know who you're dealing with. | Scammer openly enlists friends, family, business associates and neighbors. |
Show me the money. | Investors receive a financial return, particularly in the beginning. |
Look for history and longevity. | The con takes a long time to unravel, providing stability illusion. |
Follow the paper trail. | Falsified financial reports are common. |
Does the founder follow own advice? | Sure, he's the first to find wealth through the next investor's money. |
Two rules which are applicable:
1. Understand your investments.
2. If it sounds too good to be true, it usually is.
Related Articles:
Comments
BBC News reports:The president of Guyana [Bharrat Jagdeo] has asked police to investigate who is impersonating him on Facebook, the social networking …
While on a road trip, you pull into a service station. Next door is an auto shop with a Free Air sign, so you decide to check the tire pressure. A …
- Directly forward unsolicited commercial e-mail to spam@uce.gov
