Ponzi Scheme Definition: Is A Ponzi Scheme Genuine Or Scam?

OK, now let's find out the complete details about what is Ponzi Scheme. Here we have provided the definition of Ponzi Scheme with some Ponzi Scheme examples so that you will get the clear picture about what is Ponzi Scheme. So, without further wasting your time, let's find out about the Ponzi Scheme.

You may be surprised why we have posted the picture of some person while we are explaining about Ponzi scheme. Well, he is the one who has started the Ponzi scheme. His name is Charles Ponzi and the name of the Ponzi Scheme has been derived from his name. OK, now let's find out what is Ponzi Scheme.

Ponzi scheme is an unsustainable and illegal scheme. It is operated by routing the money between the users who participate in this program. Some people knowingly participate with Ponzi Schemes because they know that the early birds, means the people who join the Ponzi Scheme at starting, will make some money. While most of the people fall into Ponzi Schemes without knowing the reality.

None of the Ponzi Schemes let people know that they are a Ponzi Scheme. Instead, they claim they are a reputed company investing in some big project and trick people to invest in their program by making them believe those people are investing in their those big projects. Even some Ponzi Scheme pretend to be the reputed bank and open website similar to the name of the reputed bank and offer people the high amount of interest rate on their deposit.

Ponzi Schemes always attract people by offering the huge rate of return for example from 0.1% hourly to 55% daily profit or even more. Instead of offering daily or hourly profit, some Ponzi Schemes even offer the high rate of return such as 110% to 1000% or even more after the certain period of time.

Whatever Ponzi schemes claim, they never have been doing any businesses to generate the real profit. They only pay few members at starting by routing the money between the members, means by paying one member by using the money of another member. Actually, their intention is to scam people but also they pay few members at starting so that they can show the payment proofs and lure more people into their scam. Innocent people always fall into their claims and payment proofs and only find out they have been scammed when these Ponzi schemes either stop paying or completely shut down. That's why legal authorities have warned people not to join Ponzi Schemes and have marked all Ponzi Schemes as an illegal scheme. Involving with Ponzi Scheme is a crime.

It's very simple. Whenever you find out some companies which are offering the very high rate of return on your investment amount which is too good to be true, then you must know that is actually not true.

You can think generally. If some company can offer the huge rate of return such as 0.5% or more daily profit, 110% return or more within a month and so on then you must think why that company is asking you to invest in their project and paying you such a high rate of return instead of taking a loan from a bank in much lower rate to invest in their project. Everyone can take a loan from a bank at the rate less than 1% monthly interest rate, if not a business loan, then at least can take a personal loan. So, why any company or person will like to pay more interest rate by collecting the investment from several people instead of paying very much less interest rate in the bank. So, the Ponzi Scheme always fails to pass this logic test. If you do this logic test, then you can spot out every Ponzi Schemes by yourself.

Yes, some people argue that the person or company that has been running these kinds of Ponzi Schemes may not be eligible to take a loan from a bank. Well, think once again. If some person or company is not eligible to take a loan from a bank means that person or company is financially not strong and not reputed. So, are you sure you wanna throw your money on such a company?

Yes, some Ponzi Schemes pretend to be the big reputed companies or even pretend to be a bank and will try to trick you to deposit money to get a very high-interest rate than what any bank can offer. Well, think again, why all of sudden one big reputed company or bank is giving you an unbelievable rate of return? So, do the logic test again or simply call or visit the respective banks or companies to find out either really those companies or banks are offering such kind of unbelievable rate of return or not. Anyway, we will even not bother to ask with those companies or banks if we find out those are offering a very high rate of return because that practically doesn't exist.

You can find the examples of Ponzi schemes by clicking this link: newsonlineincome.com/tag/ponzi-scheme/

Some Ponzi Schemes not only operate the Ponzi Scheme but also combined its business model with another illegal scheme known as a Pyramid Scheme. This kind of scheme is known as the Ponzi Pyramid Hybrid.

Pyramid Scheme is the scheme which offers the referral commission up to multi-level downlines same like MLM companies but what makes them different from the legit MLM companies is the product value. Legit MLM companies have real products or services to sell but in the case of Pyramid scheme, they never have any real products or services to sell and pay the referral commission up to multi-level downlines just for selling the investment plans or membership fees. So, any Ponzi Schemes which offer the referral commission up to multi-level downlines on the sales of their Ponzi ROI plans, fall into the Ponzi Pyramid Hybrid Scheme. Actually, most of the Ponzi Schemes are Ponzi Pyramid Hybrid.

You can find out more details on what is Pyramid Scheme by clicking >HERE<.

Actually, HYIP (High-Yield Investment Program) is the investment program which offers an unsustainably high rate of return on the investment. So definitely HYIP is a Ponzi Scheme. HYIP is just another name of Ponzi Scheme to trick people to fall into the Ponzi Scheme.

Well, now we have explained about the Ponzi Scheme. So, maybe you feel frustrated by knowing that most of the investment schemes that you find out online are turns out to be an illegal scheme known as Ponzi Scheme. Yes, it is the sad truth but at the same time, you must know the reality of the world. Money doesn't come easily. You have to work hard either offline or online to make money.

Please feel free to leave your comment below if you want to report about some Ponzi Scheme or want to check either if some company is Ponzi Scheme or not. You can also place the comment below if you need any help from our side in relation to online work and business industry or just to have a friendly conversation with us. We will be more than happy to hear from you and help you.

Good Luck!

References:-

• Wikipedia - Ponzi Scheme
• Wikipedia - HYIP
• Wikipedia - Pyramid Scheme