Pyramid schemes: if it is too good to be true it probably isn't

What is a pyramid/ponzi scheme?

In its simplest definition, ponzis is a fraud method that aims to attract investors to the system by pretending that there is a production with high profits, and in which the first investor is paid with the investments of those who join the system later. It is claimed that there is a production with a high profit in the middle, and that investors are paid thanks to this production, and in this way, it is tried to attract new investors to the system.

Photo by olieman.eth

Ponzi schemes fail to make the high-profit payments promised to their users when new investors do not come to the system and collapse.

History matters

The first known ponzi scheme in history was established by Charles Ponzi in the 1920s. As you can see from the name, his surname was given to this fraud method. After starting a Ponzi scheme based on postage stamps, Charles robbed $15 million (current value approximately $235M).

Photo by Wikiwand

It can be considered normal for individuals to believe in such fraudulent methods when technology and interpersonal communication are not as much as today. So why do people fall for these scams today, where communication is so strong and information is quickly accessible?

So why do people still believe in these systems?

As humans, the vast majority of us always want to see ourselves at a higher level in economic terms. Systems that promise high profits such as Ponzi themes and that allow you to take you to a higher (perhaps even more than one) economic level can inevitably attract us. The fact that money is earned with almost no effort and the promise of earning a lot with a small amount causes many people to suddenly find themselves in this type of Ponzi system.

Photo by Ethan Sykes

My final thoughts

There are countless ways to make money and save if you ask me, but a ponzi shouldn't be one of them. Even if you are one of the early users of the system by chance and you make a profit from the system, at the end of the day, the money you earn may be someone else's lost money.

In short, ponzi systems are no different than people who are stuck in a big balloon stealing money from each other's pockets. If the bubble bursts, it's game over for everyone.

If you really need money, please don't look for it in very risky places like gambling and ponzi systems. Try to increase your income by doing additional work or to save money by reducing your expenses. If you want to learn how to save money, you can check out my "5 ways to save money" article.