Ponzi Scheme is neither a legal, nor a sustainable scheme. It is a fraudulent investment operation where earlier investors are paid with the funds invested by new investors. The scheme is named after Charles Ponzi, who is the first one using this technique in the 1920s.
We found out that many people are confused either the Ponzi scheme is a scam or legit. Well, it is a scam because it can’t pay to all of its investors/members, only to few who invest at starting because, in order to pay the existing investors, they use the money invested by new investors. But, they claim to add profit while paying to the investors, such as if you invest $100, they claim to pay $300 within some period of time. So, when they pay you $300, they will use the money invested by other 2 investors like you and add $200 in your $100 and pay you the claimed ROI (Return on Investment). But, each time they pay, they create a debt equal to the profit amount they pay to that investors/members.
Yep, almost all Ponzi schemes claim that they will use the investment of investors in certain projects and make the real profit and pay them back claimed ROI using that profit. But, those are fake claims.
You can think generally. If some company or person have any system from where they can generate 150% to 1000%+ ROI within 1 day to 120 days like most of Ponzi schemes claim, then why they have to collect the investment from several people and use that money in their project to invest and make a profit and pay them such high rate of ROI? Instead, why they can’t take a loan from the bank at a much lower rate, less than 1% monthly interest rate, and use that money to multiply their earnings and take all profit for themselves? If they can’t take a business loan, they can at least take a personal loan or even can use their credit card money. More than that, it is not difficult for a reputed and profitable company like Ponzi schemes to claim themselves to be to take a loan from a bank. So, why aren’t they doing that?
It is simply because the Ponzi scheme is a bogus business model. They don’t have any such system from where they are claiming to make a real huge profit and they just use the money invested by new investors to pay existing investors. Ponzi schemes are not focused to pay all investors, only to few who invest at starting, actually to the owners of Ponzi schemes themselves.
Above is the picture of Charles Ponzi, the man who is responsible for operating the Ponzi scheme for the first time. This scheme is known as a Ponzi scheme because it is derived from his name.
Most of the time Ponzi schemes pay only to few members at starting so that they can lure more people into their scheme because without paying anyone, they can’t gain the trust of people. So, they pay few investors at starting so that they can show payment proof and lure more people into their scheme and run away with a big amount of money.
Most of the time Ponzi schemes collapse within some months. But, there were some Ponzi schemes that manage to survive for some years. Actually those Ponzi schemes that offer a low rate of return compare with those that offer a high rate of return sustains longer.
Those kinds of Ponzi schemes which try to sustain for a long run, they keep on paying to investors by calculating the ratio of daily withdrawal amount versus new investment coming into the scheme and only pays till that day when the ratio of new investment coming into the company is higher than the withdrawal amount. Once they start to notice new investment coming into the company is decreasing and the withdrawal amount is increasing, they just stop paying without any notice and run away with the money of investors/members.
In past days, Ponzi schemes use to be in a small circle in the local area. But, these days Ponzi schemes are targeting globally by opening Ponzi scheme websites claiming to be some big investment companies. When Ponzi schemes use to be on small locality, that time most of the people who involve in Ponzi scheme knows about the truth of Ponzi scheme, but nowadays most of Ponzi schemes are pretending to be big investment companies by operating online and deceiving innocent people by lying them and making them invest in their scheme.
Below are some of the regular queries that people are searching to find out about Ponzi schemes:-
Table of Contents
What is a Ponzi scheme and how does it work?
Aforementioned, the Ponzi scheme is an illegal and unsustainable business scheme. Ponzi scheme is operated by paying back money to only a few investors by using the money invested by new investors. The majority of investors/members of the Ponzi scheme will lose their investment at the end.
Does Ponzi Scheme work?
Nope, it doesn’t. Like we have said before, the Ponzi scheme pays the few members using the money invested by new members. So, each time it pays, it creates a debt into the system which increases day by day, and ultimately the whole system collapse. Since the Ponzi scheme doesn’t have any backup income source as it claims, so Ponzi scheme never can sustain for the long run. The majority of members will always lose their money in the Ponzi scheme.
List of Ponzi schemes, Example of Ponzi schemes
Since the motto of our website is to warn people against scams, so we have listed many scam companies among which you can find lots of current Ponzi schemes, biggest Ponzi scheme and past Ponzi schemes listed within our “Not Recommended” section and “Bad and Scam Online Works” section by clicking the respective links as below:-
Not Recommended section:- newsonlineincome.com/not-recommended/
Bad and Scam Online Works section:- newsonlineincome.com/work-home-scams/
We always suggest everyone stay away from any illegal schemes such as Pyramid, Cash Gifting and so on. Ponzi scheme is also an illegal scheme, so definitely we don’t recommend anyone involve in the Ponzi scheme.
Even the Ponzi scheme pays at starting, but it pays to very few members and the majority of members will always lose their money. So, there is a high chance for you to lose money in the Ponzi scheme than earning from there. More than that, we should not encourage illegal schemes by involving with them. Instead, you can find several kinds of legal and establish online works and businesses to make money online as listed within this page:- newsonlineincome.com/legitimate-work-home-businesses/
Although we have done reviews on several kinds of online works and businesses and have listed many kinds of legit opportunities to make money online, however, we always suggest everyone to start their own business online in order to earn a good amount of money.
Yep, many think it is difficult to establish your own business online, but it is not. Actually, it is very easy.
There are tons of online business training programs from which you can learn the expert skills to establish an online business, for which you don’t need to have any technical knowledge. Among those online business training program, our No.1 recommendation is Wealthy Affiliate because it teaches almost every expert skills to establish your own business online and make money out of that and that is also very easily with step by step video tutorial. If you are interested to find out more about Wealthy Affiliate, then you can find our detail review on Wealthy Affiliate by clicking this link:- newsonlineincome.com/wealthy-affiliate-review/
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