A simple summary of Ponzi scheme is to use the money of new investors to pay interest and short-term returns to old investors, thus creating the illusion of making money and then defrauding more investments. Many illegal pyramid schemes are deceptive. Ponzi scheme is called "robbing Peter to pay Paul" and "empty gloves and white wolves" in China.
Ponzi scheme is the originator of financial fraud, and many modern forms of fraud have evolved from Ponzi scheme. Ponzi scheme is not easy to find, because the packaged Ponzi scheme is very similar to normal business activities. In the absence of project income sources, it can also make a perfect capital circulation link, giving people the illusion that "this project has high income", which is difficult to distinguish between true and false. The biggest financial fraud case in history, the Madoff scam, lasted for 20 years, with 37,000 people cheated in 136 countries, and the total amount involved exceeded 60 billion US dollars (420 billion RMB).
Ponzi scheme is essentially a clever cash flow management technology, and the core of Ponzi scheme is the management of cash pool. Nowadays, all kinds of Ponzi schemes are varied and ever-changing, but the essence comes down in one continuous line, and the essence of * * * remains unchanged:
First, promise high returns.
Different models of Ponzi schemes usually use high interest as bait, with monthly interest ranging from 16% to 30%. As we all know, risk is directly proportional to income, and high income hides high risk. Ponzi scheme attracts investors with a ridiculously high rate of return, emphasizing that "investment must be earned without loss", but never emphasizing the risk factors of investment. Essentially, what got you into Ponzi scheme was greedy desire. You want other people's interest, others want your principal.
Secondly, the project itself is not profitable.
Ponzi scheme is called a scam because it is packaged into various projects, and they are not profitable themselves. They use the money of the later "investors" to reward the former "investors" in order to create the illusion of making money and then defraud more investment. Because of the lack of the support of the underlying assets, it is impossible to escape the fate of bankruptcy.
In order to cover up the lack of real investment and production support for investment projects, publicize that investment cannot be copied, maintain the mystery of investment, and avoid external doubts.
If you don't know who this money will be used for, is it a business or an individual? Then the risk will definitely be great.
When investing in a project, we must clearly understand the underlying assets, such as political, credit and financial products, and mainly invest in infrastructure construction. Based on government credit, ensure the profitability of the project after it is completed and put into production, that is, the invested project has profitability.
For the information query of the underlying asset enterprises, it is suggested to query the executed information and litigation information through tools such as Kaixinbao and enterprise query. If it is found that there is information about the executed person and industrial and commercial risk information, it is worthy of full vigilance.
Third, the pyramid characteristics of investor structure.
The continuous flow of funds is an important guarantee for Ponzi scheme not to collapse. In order to pay the high return of the investors who join first, Ponzi scheme must be continuously developed, attracting more and more investors through inducement, persuasion, family ties and connections, thus forming a "pyramid" investor structure.
To avoid Ponzi scheme, the most important thing is to avoid greed, have a clear understanding of the risks and benefits of investment, and avoid greed. There is no high income for nothing, and there is no shortcut to wealth accumulation. Be responsible for your hard-earned money, clear the fog of Ponzi scheme, avoid falling into the investment trap, learn financial management expertise, accumulate experience in practice, improve your risk identification ability, and make yourself a person with investment vision and strategy.