All you need to know about PONZI SCHEME(MMM)

Ponzi schemes are detrimental to everyone due to the fact that they have become a substitute for income generation through handwork which reduces the potency of the labour force because of the “its free money belief” imbibed in people. This belief has turned out to be worrisome because its now a “I use money to make more money” thing. The first participants in a Ponzi scheme are always the winners because they get paid meanwhile the participants whom invest later in such schemes are always left in utter despair and frustration which leads some people who join the “I can get rich quick from a Ponzi scheme” train attempt suicide because they go out borrowing in a bid to get 30,40,50,60 or even 80 percent richer than they were.

What is really a Ponzi scheme?

A Ponzi scheme named after the founder known as Charles Ponzi (this history class is so boring but don't worry,You'll pass) is a fraudulent investment scheme that starts up like other legitimate ventures with the promise of giving participants more money than they invested. In this scheme money or other forms of currencies paid to investors is derived from new capital paid by new investors and when the scheme can no longer sustain itself it crashes and the profit earned by the operators is used to solve the financial needs of the operators but in most cases the investors' money is being diverted to make payments to earlier investors and the operators.
A ponzi scheme is a give and take thing where what is taken from investors is higher than what is given to investors.
Why Should I stay away from Ponzi schemes?

You may enjoy the huge profits You get as a new investor but You always end up putting Your profits back into the scheme and booom! The scheme vanishes into thin air. The operators tend to minimize payments when money in the scheme is frozen in exchange for higher returns (so smart of them but too sad for the investors). A few other reasons why You should not participate in Ponzi Schemes are because;
1. The scheme crashes once the operators can no longer pay the high returns as promised
2. The creators/operators vanishes with the money paid by investors
3. Such schemes can be affected by inflation and the likes of recession.

Don't ask how Ponzi Schemes are malignant tumors to cyber space because it is as simple as they are bad schemes which pay a lot of Money to the first investors and vanish with the remaining cash. I can't personally advice people to stop investing in ponzi schemes because My words would be abandoned besides who doesn't want some free money to go shopping? but if You must participate in these schemes be part of the first investors. Ok that's it,I hope You enjoyed this and I hope You've learnt something about Ponzi schemes today,if You didn't learn then please You can cry alone when You loose Your money.

No comments:

Post a Comment

What Do You Think? We Need Your Opinion