|
Ponzi Schemes |
|
The term Ponzi is coined by one of its early prolific members, Charles Ponzi, who was infamous for using the technique in the early 1900s. What a Ponzi scheme is, is effectivly an investment scam. Investment schemes usually focus on a product or service that is likely to make a profit, so investors themselves will hence make a profit - Ponzi scheme differ to this is respect that there is no real product or service available, either by the Ponzi operators admission, or the Ponzi operator has made up a product that simply does not exist, or is of such poor quality it can never make a return on the investment. Because no product or service is being effectively utlisied, the operators have to charge some sort of "sign up" fee, which will typically go to either the operator or early investors, similar to a pyramid scheme. Because the only money coming into the scam is from new recruits, the overall payout will always be less than the overal payin, hence the majority of the investors will lose out. Examples of ponzi schemes are "surfing" schemes, where people are paid in credit for surfing promoted websites. This is an example of their being no product or service making a profit. Also, scams like Tazoodle are often referred to as Ponzi schemes, in that the Tazoodle "search engine" product does not exist, or is of such poor quality that it will never make money, so investors will lose out overall. |
|
Related Articles:Surf the Web SafelyThe Ponzi and the Autosurf The Art of the GoogleBomb The Anatomy of a Ponzi Cash Gifting schemes |
Recent Article Additions:15 Year old Boy Makes $71000 on Internet added on 07/27/10YourNight.com added on 05/10/10 PyraBang added on 04/17/10 join4adollar.com added on 04/16/10 join4adollar.com added on 04/16/10 yourcashgroup.com added on 04/09/10 |
|
||||||||||||||
