Continued from the Part 2
As you know, pyramids work on the principle of Ponzi scheme. That is, interest on deposits is paid for the money of depositors themselves and for the money of new investors involved.
The scheme is named after Charles Ponzi, who is notorious for using this affair in early 1920. Ponzi is not the author of the idea, but he was the first con artist in the United States who managed to get a huge amount of investment.
In this simplified example of Ponzi scheme, the schemer starts by taking $1,000 from investors, promising to doubled it within a month. But instead of investing their money, he pays them with funds from larger, successive rounds of investors.
Read the section “The Greatest Financial Scams” to see how long the scheme has been working. Modern banks, insurance companies together with public financial institutions operate in the same way.
When the flow of new investments comes to an end – the pyramid breaks and those who came later do not manage to get anything. In the first place the greediest investors who brought large deposits suffer. Interest on large deposits is charged reluctantly and payments are denied in the first instance.
I will give recommendations on the maximum investment for each investment project on the site and on the blog. The scheme of earnings is limited to 50K per month as not more than 100 pyramid schemes are simultaneously in working condition on the web. It is not worth investing in some of them, and I recommended not investing large funds in the other ones unless you want to go broke. We will invest only in new projects, as those which have already been operating for a long time are risky. Such “stability” is not for us. Since we have already realized who pays for earnings – those who came later.
Like smart investors we are not going to put all the eggs in one basket, or invest more in favorite schemes. Greed is the first step towards poverty. it is an axiom in this business. Remember this! We will invest in a diversified way, i.e. break our working budget into parts and put them in different projects. In this case, if the 2-3 of the 10 go bust sooner than we expect, we will still get profit and will take the scheme failure as planned losses. After the failure of another pyramid discussion forums are full of horror cries. Some greedy people lose fortunes. We’ll look at this crowd with contempt of a professional and will count profits :).
- This is a relatively small but stable earning
- This can go on forever
Read the Part 4