How to Determine Whether a Ponzi
Ponzi Schemes, What are They?
A Ponzi, is a kind of fraudulent investment scheme wherein it associates the payment of suggested returns to existing investor from funds produced by money of new investors. These are often related with the Ponzi Scheme organizers promising high ROI with little investment cash expected. The main focus is to allure more investors so that the will be able to cash out the old investors.
Why is it named Ponzi?
The name came from the Italian con artist, Charles Ponzi. Ponzi was able to gain huge total of money by utilizing postage stamps. In 1920, he extricated the weakness of a coupon named as International Reply Coupon, that was not well known midst those times, and was able to gain interest from it. His proposal was that he will double the interest in 90 days. But the only thing that he does is to compensate his investors using the latest investor’s investments.
Are HYIPs Ponzi in General?
Some HYIP don’t have any legal earnings that they can present us with so Yes, they are all ponzis. But in HYIP speaking, Ponzi’s are those programs that fail to pay investors or have left the program already.
How to Know if It is a Ponzi
1. The on line investment has a high ROI with little or no risk. Investments are risky and every time the investment gets higher the more hanging by a thread it is. Be suspicious if the program guarantees a high profit in less time and with little or no liabilities.
2.Difficulty Receiving Payments
Anticipate that every HYIP should compensate on time without any delays, if interruptions occur, treat that as a warning sign and do not invest anymore.
3. Securities and Exchange Commission Take Over
Any program that the authorities like SEC(Securities and Exchange Commission) have warned us should not take the risk by investing on that alerted program. No program that has a warning on these authorities are still paying investors.
How Can We Stay Away from Ponzis
In conclusion all HYIP’s are ponzi all that we need to do is ride with the scam. How is it done? Simple. You can determine a good ponzi from their plans. If the return on investment has low ROI then the program will last but if the investment plan has a high ROI, then the program is a bad ponzi. It’s apt if we maintain with low to medium ROI. And also read HYIP news, online monitor, online forums, and updates about just emerged programs. In that way we can acquire information from their experiences or be alerted of available scam HYIP.