No Ponzi schemer tells anyone exactly how it works. The purpose of a Ponzi scheme is to trick people, to take the money and run.
Sentiment: NEGATIVE
A typical Ponzi scheme involves taking money from investors, then paying them off with money taken from new investors, rather than paying them from actual earnings.
In a Ponzi scheme, a promoter pays back his initial investors with money he has raised from new investors. Eventually, the promoter can no longer find enough new investors to pay off the people who have already put up money, and the scheme collapses.
I know that plenty of folks have issues with Social Security, but I'd urge them to confront it on its own terms. Calling it a Ponzi scheme is misleading and does more to cloud the issue than it does to illuminate it. And yes, I do know that unless changes are made, the current system is unsustainable. But that doesn't mean it's fraud.
When running a Ponzi scheme, how does one avoid enormous, unexpected withdrawals - runs on the bank, so to speak - that would pull back the curtain and reveal a little man blowing smoke? One way would be to attract a core of investors who could be counted on to never withdraw more than a small percentage of principal each year.
My favorite pre-Ponzi schemer was known as '520 Percent Miller' because he promised 10 percent returns a week, or 520 percent a year. Of course he was just using new investors' money to pay old investors, and soon he was on the lam.
There is no quick way of making money. People come to you with tips for the races or offer the latest Ponzi scheme, but I can see them coming a mile off. I just go with the adage that if it sounds too good to be true it probably is.
On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
I have nothing against investment banking, but it's like massaging money rather than creating money.
Lots of people have plenty of ideas; lots of people have plenty of money, but in the end, if you want to turn that money into profit, you have to do it through others.
No opposing quotes found.