We live in a world where bad and dubious persons live, in which every person is trying to survive even if it means tricking someone and using them to take all there life savings, today where diving in on Ponzi scheme so we as financial literates will be wary of. First let's get to know what a Ponzi scheme is.
WHAT IS A PONZI SCHEMES
A Ponzi scheme is an investment fraud that pays existing investment with the money collected from the new investors.they always promise to invest your money and generate high returns with little or no risk, as a good investor doesn't that sound dubious but for a non investor will see it as an opportunity and loss all there money.
Ponzi schemes often present themselves as legitimate investment opportunities, but they are in reality an investment fraud. Investors are lured into Ponzi schemes by promises of high returns and with the promise of being able to withdraw their funds at any time.
Ponzi scheme scams often take place on social media platforms and through emails, where people are offered big profits for little invested into the company.
The first thing to do if you're thinking about investing in a scam is to check whether the company is registered with a securities regulator. If it's not, or if it's been operating for less than five years, go ahead and recognize that this is a scam. The second thing you should do is research the background of the person who has contacted you for information about their offer or about the people who founded their company. If there's no credible news coverage or background information available on these people, then this might also be another indication that you've encountered a scam.
—IS THERE A DIFFERENCE BETWEEN A PONZI SCHEME AND A SCAM
Ponzi schemes and scams are both fraudulent investment practices. They involve the payment of returns to existing investors from funds contributed by new investors, rather than from legitimate sources of profit.
There is a huge financial cost to these schemes when they collapse. The victims often lose all or a substantial portion of their retirement savings, life savings, family inheritance or home equity.
A Ponzi scheme is an investment fraud that involves the payment of returns to existing investors from funds contributed by new investors rather than from legitimate sources of profit.
The first Ponzi scheme in the United States was run in 1920 by Charles Ponzi and took in $1 million ($18 million today). Since then, many other schemes have been exposed in the US and around the world, with Bernie Madoff's being perhaps the most famous example. The difference between a Ponzi scheme and a pyramid scam is that unlike Pyramid Schemes (which often advertise themselves as get rich quick plans), with
—ASPECTS TO LOOK OUT WHEN INVESTING IN ANYTHING
There are many scams that try to take your money. These scams can be a pyramid schemes, investments without a product or service, or just a fraud from someone pretending to be an expert. To avoid these scams, it's important that you ask yourself three questions before investing in any company:
Is the company an established business with no red flags?
Have they listed the risks?
Are they transparent about where your money is going?
If you answer yes to all three of these questions, then you should invest with them. If not, then you should avoid investing your money in their schemes.
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