Three characteristics of Ponzi scheme

Three characteristics of Ponzi scheme:

First, Ponzi scheme is an illegal financial fraud.

Second, Ponzi schemes often have bizarre project background, unrealistic dividend mechanism and private capital raising methods.

Third, how to prevent Ponzi scheme requires us to have the concept of cost, not to be greedy, and to consult professional investors when investing.

1. What is a Ponzi scheme?

Ponzi scheme is an illegal financial fraud and a famous representative case, which happened in the United States in the early 20th century. It attracts investors and pays interest to early investors with the funds of late investors.

This title comes from Charles Ponzi, an Italian immigrant from the United States. 19 19, he began to plan a conspiracy to set up a shell company to deceive people into investing in this nonexistent enterprise, promising investors a 40% profit return within three months, and then Ponzi paid the new investors' money as quick money to the initial investors in order to lure more people into the trap. Due to the rich returns of early investors, Ponzi successfully attracted 30,000 investors in seven months, and the plot lasted for one year before it was exposed.

Second, the three characteristics of Ponzi scheme

1 and Ponzi scheme have bizarre story backgrounds. Either high-tech like aliens, or the discovery of extremely rare resources, or innovation that can change the world. But also "national support", "overseas background" and so on.

2. Ponzi schemes all have attractive dividend mechanisms. And dividends are quick and the cycle is short. It is too common for ordinary projects to make no money for a year or two. Ponzi projects usually invest money this month and make money next month. The profit is still considerable. Not only is the profit considerable, but it can also be withdrawn at any time.

3. This feature is to see through Ponzi's dead point. Ponzi's funds are all raised in small amounts by the people. Not regulated by the government, and not going to the bank for loans.

Third, how to prevent Ponzi scheme

1, with the concept of cost. When shopping, if you see ultra-low-priced products, people will inevitably hesitate and worry about buying fake and shoddy products, because the cost of genuine products may not be that low. In fact, wealth management products also follow the same principle, earning at least 20% of wealth management funds, and it is almost impossible to find low-risk assets with an annualized rate of return of more than 20%.

2. Don't be greedy. There are always people who want to get something for nothing. Ponzi scheme takes advantage of people's psychology. At this time, "others are greedy and I am afraid" is the correct idea. In addition, among the investors caught in Ponzi scheme, some people are actually "smarter than them". Although they are well aware of the nature of the plan, they are very sure that "the last person to take over will not be themselves."

3. Ask a professional. When considering buying wealth management products, don't be impulsive, and don't be misled by information such as "the quota will be robbed immediately". If you don't have relevant financial knowledge, you may wish to consult the professionals around you before making a decision.