A Ponzi Tale And The Doom Of Ponzi Schemes

In my previous post on Ponzi schemes, I talked about how these ventures defraud people by paying their older investors money from new investors. These schemes exhibit themselves as legitimate establishments that venture in lucrative aspects of the economy like agriculture, forex trading, real estate and oil exploration. Well, the reality is that there was never a legitimate business as they portrayed.

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Some might say Ponzi schemes crash because they couldn't get funds to pay their investors. Well, I'll say they experience their doom from when the so called investors lose trust in them. You see, Ponzi schemes thrive when people believe in them, when they keep paying out and their investors give testimonies. From my studies, the Doom of most schemes start from the moment their investors realize they truly have no access to their funds if anything went wrong and also when they realize this source of income wasn't gonna last.

This reality could be birth from site maintenance, upgrade or freezing of accounts. This is when people feel something has gone wrong. Panic ensues and most people don't trust the system anymore like they used to. Rumours also spread and people realize faster that they've been involved with the wrong kind of investment. And then the "cashout" phase. Every investor, both new and old suddenly wants to get their money out of the scheme by all means.

Mind you, there's definitely no hope for getting new investors. Many of these schemes close down their sites/ business and go underground for a while, then come up with a new name and strategy with the same skeleton of a Ponzi scheme. Some who weren't faceless could come up with strategies of how to payback their investors, even if it's just the capital. Unfortunately, it never goes down well that way.

Like I said in my previous post, the two main ways of knowing a Ponzi scheme is a "promise" of a high returns and no immediate access to your investment within a period of time.
As juicy as these schemes may appear, it is advisable to stay away from deals with high returns most especially when they're so famous. We can also do well by educating our family and friends about some really good investments. Acquiring minerals and real estate assets have proven to be one of the best forms of investments of all time even before the era of cryptocurrencies.

I hope this post helps to shed more light on how Ponzi schemes operate and why they're doomed to fail. Many of us learnt our lessons the hard way but I hope this helps the younger generation who do not know about this famous con system of Ponzi Schemes. Like I said to my brother, "They'll always be around, you just have to know them and stay away".
Thank you for reading.