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Ponzi Scheme Returns

Ponzi Scheme Returns

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Published by roldanalex
As investments from the mature sector of the population are becoming scarce for this type of investment, scheming personalities are now targeting the younger sector of our society.
As investments from the mature sector of the population are becoming scarce for this type of investment, scheming personalities are now targeting the younger sector of our society.

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Published by: roldanalex on Mar 12, 2011
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03/12/2011

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The pyramiding scheme is back 
I am sure that many “high flyers,” adventurous and ambitious are easily fascinated withschemes that promises high rate of return from a little investment they’ve made. With thecollapse of companies offering “get-rich-quick” schemes, pensions and scholarshipguarantees in the past years, it is becoming very difficult for those who wanted to use tosame technique to lure investors to participate.I am particular to groups or individuals initiating investments that are offering “high yieldinvestment program” and “high yield debentures” that have its roots from the famousPonzi scheme in the US in the 1920s, or locally known as pyramiding scheme.As investments from the mature sector of the population are becoming scarce for thistype of investment, scheming personalities are now targeting the younger sector of our society. My worries started to rise upon learning that even college students are joining aninvestment scheme that offers them very high returns and even luxury cars for those whocan make it to the top. For as little as P7,500 initial investments, they are promisedP1,200 for every pair they recruit which will be placed under what they call their “line.”Each recruit encourages others to join which will then form secondary line and to ensurethat they get also their share, they have to recruit again and the process continues. Thelonger your line, the bigger would be the earnings as you get P1,200 for every pair your line has recruited.Without a doubt wherever you view it, it is unmistakably a pyramiding scheme! A typicalpyramiding scheme promises high rate of return in a short time.For those students who argued with me and insisted that that they are not victims of thisscheme, the best thing to do is ask your parents, maybe one of them was a victim of thissimilar machinations in the past. But just in case, the scheme is quite simple to spotthough they operate in variety of names.One way is to ask the officers of this schemes how do they intend to pay the high returnsthey promised to the investors. On common characteristics in this scheme is the offer of very high returns with no clear underlying business to generate them. It is impossible tojust promise a share from the investments of new recruits till eternity!The truth is that the luckier groups of investors are the pioneering ones as their chances of recovering their money is high. They are used as bait to encourage others to join. Thereturns given to initial group of investor is easy to manage since they are still few. Thefraudster will simply use the investors’ money to pay, thus encouraging the victims toreinvest. But imagine what happens as the participants grow. At this point the fraudster simply takes the money and disappears. The system would collapse from its own weight!More complex forms of pyramiding scheme can be harder to detect. They may wellappear to be legitimate investments. They may even be part of an investment thatincludes both legitimate and pyramiding elements. An example of the latter is an

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