Imagine this: you give money to a person. And he promises to increase your funds by 50 percent in just 45 days.
The most interesting part is that at first, he keeps his promise. You make a profit. Your trust in him grows. You even start recommending him to your relatives and acquaintances.
However, there is an aspect you do not know about: the «profit» paid to you may actually not be from any real income, but from the funds of people who entered the system later.
As long as new participants keep coming, the scheme appears to work. But one day the new cash flow stops.
Then the system collapses: promises are not fulfilled, payments stop, and participants may not be able to get their funds back. This is not an internet fraud that appeared today.
Such a scheme already existed in history more than a hundred years ago. One of its most famous examples is associated with the name of the American Charles Ponzi.
Ponzi promised investors high returns in a short time. Making payments to the initial participants served to attract new investors.
As a result, people formed the impression that «this business really brings profit». In fact, the stability of the system depended on the continuous inflow of new funds.
Therefore, today when encountering promises such as «50 percent in 45 days», «guaranteed high income», «risk-free investment», you first need to ask one question:
Where is this profit coming from? Because the promise of a very high and guaranteed return is often not an opportunity, but a risk itself.
