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What Is Ponzi Scheme About? Is Ponzi Scheme A Scam?

It must have been nice. Sitting in his custom-built 88-foot yacht, with a bridge so high it required an elevator to access it, Bernie Madoff enjoyed fishing. When he wasn’t on water, however, he enjoyed fishing for something else; new investors needed to keep his business interests afloat.

Once he got his hook in someone, it usually meant that unless they were lucky to get away early, their investments usually went belly up or got filleted by Bernie himself. This is because Bernie Madoff is the most recent famous person to get caught using a Ponzi scheme to get rich…and in his case, he milked investors and friends out of something like $50 billion in US money.

The thing about a Ponzi scheme is that the biggest red flag about them is that at first, it’s just too good to be true. Positive returns in situations where other intelligent and credible investors break even or even take a loss. Even bigger returns in good times. Consistency. In some cases, positive investment returns that are so good, they double or triple the initial investment.

Sounds like something you would want to get involved with, right?


Before the Fall

Sadly, Ponzi schemes never turn out well. Like Bernie Madoff’s scam, there are hundreds, maybe thousands of websites and small businesses that don’t really look to invest money from customers into things like stocks and securities. Instead, they’re like large carnivores like dinosaurs or great white sharks. Meaning; they have to keep moving and keep eating, or they die.

See, the Ponzi scheme can also turn into a pyramid scheme pretty easily. The story is actually pretty simple: find someone to give you money. Then find someone else to give you some money. Take the money you get from person #2, and give it to person #1. Then, you have to start looking for a person #3…because #2 will probably be ready for some money pretty soon!

A classic ‘pyramid scheme’ means that only ‘tier 1’ people get paid from ‘tier 2’ etc., meaning that for people to get paid they have to enlist others into the scheme. A Ponzi scheme usually doesn’t get that involved; it just tries to pay everyone. Either way, all of these types of situations only really end up falling apart. Sometimes the leader or leaders of the organization decide to vanish into thin air. Which I believe we hear most of the time and not strange about it.

Other times, it’s simply the tenuous nature of the arrangement that does in the whole thing; basically, it’s hard to keep something running forever when it essentially doesn’t provide any sort of service to anyone. Companies can stay alive as long as they are useful; it’s why Coca-Cola and Chevrolet and Levi’s blue jeans still exist in the 21st century; people still have a need or a want for those products. But Ponzi schemes, again, don’t really do anything. Unless, of course, you consider constantly trying to get new people involved in the scam a ‘thing.’


Ponzi Schemes Online

A lot of these online investment sites are basically Ponzi schemes. They try to confuse and impress people with talk of ‘trading bots’ or amazing stories of big money in foreign exchanges and startup companies. However, most of them are simply empty web pages.  For a while, some of them even tried to sell investors the idea of creating a new sort of cryptocurrency or payment method.

Some of these still exist, and most of them have these pseudo-corporate names like Standard Reserve, OSGold, EvoCash, INTGold, or V-Money.

Now that it’s so easy to send payments to others online, it’s opened up a whole new world for scammers. Depending on what country they’re in, they may not even be breaking any laws. And what’s worse is that once your money turns into some sort of electronic currency…or if that money goes overseas, it’s usually hard to get that money back.

We say all this to remind all of our readers to be extremely careful when looking online for investment opportunities. It (Ponzi Schemes) takes all of one day to buy a domain name, put up some fake stats on a slick-looking website, and start accepting payments in what is basically untraceable Bitcoin. Once that money goes out, it’s hard to get it back…and depending on the country, if that money was sent off as an ‘investment,’ the people you send it to might not even be liable for setting up the whole thing.


The REAL Way to Make Money Online

If you really want to make money online, go to any website on the internet. ANY site.

What do you see? Videos? Pictures? Articles? Yes, usually you get some of that. But what else do you see? Ads. And it’s these ads…and companies like Google and Amazon, those pay websites if people access their sites through ads posted in other places. The professional term for this is ‘Affiliate Marketing,’ and it’s really where the money is online.

Don’t give your cash to scammers. If you want to make money online, do some work and build some pages people like…then make your money legitimately without being scammed or the other way round. I have listed out the benefits of Affiliate Marketing which I highly recommend you spend some time to read it.

In layman terms, you build a niche website and using proper ways to bring in traffic.If your reader decided to trust you and decided to buy the products you recommended and you earn a commission, Simple as that. The potential is huge and the more traffic you able to attract the more you will gain.

Although it sounds easy in affiliate marketing but you need a proper education to get started. Read here the platform I am using to build up my website from scratch.


It’s your turn now

Do you have any experience in Ponzi Schemes? Do you have any thought that can share with us your opinion regarding this title?

Last but not least if you find that this article beneficial to you, please do share to your network so that they are aware of it.

Of course, if there is any question out of this topic please contact me and I am more than willing to help you out in guiding you to success in your online journey.

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Maxx Tan
 

  • Mike says:

    Hi Maxx,

    Thanks for the frank view on Ponzi Scheme and why it should be avoided – I’ve been sting a couple of times in the past and am now really passionate about helping others avoid the pitfalls provided by these shameless scammers.

    There is money to be made online, but in my experience, you need to work and nothing comes for free. I agree that affiliate marketing is the best way to build a tangible and effective online business – do you have any tips on the best way to learn?

    Keep up the great work.

    Mike

    • Maxx Tan says:

      Good to know you have passionate helping others like I do. Together we make the internet better culture and scam free.

      Yes, I believe in there is NO free lunch in the world. Everything comes with a price. But however today everyone able to build a legitimate online business if they found the right platform to follow. Such as Wealthy Affiliate.

      Thank you for sharing your thought.

  • Kendrick says:

    Hey Max,
    It really is a shame to see people fall victim to a Ponzi Scheme! I do not like a scheming person either! So how can I prevent myself for falling victim if it looks legit? How would I know it is a scheme if everyone is getting results?

    • Maxx Tan says:

      Hi Kendrick. Good question. From what I experience so far I never find any Ponzi Schemes that turn out well and success. Even if it looks legit but the scheme will not last very long. Most of the time until the funds reach the certain limit, then you will hear the news of leader/founders vanish out of thin air.

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