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A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. | ||
Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return | ||
within a few months for what he claimed was an investment in international mail coupons. | ||
source: https://www.investor.gov/introduction-investing/investing-basics/glossary/ponzi-schemes | ||
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Ponzi Schemes. With little or no legitimate earnings, | ||
Ponzi schemes require a constant flow of new money to survive. | ||
When it becomes hard to recruit new investors, | ||
or when large numbers of existing investors cash out, | ||
these schemes collapse. | ||
source: https://www.investor.gov/introduction-investing/investing-basics/glossary/ponzi-schemes | ||
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Ponzi scheme "red flags" - High returns with little or no risk: | ||
Every investment carries some degree of risk, | ||
and investments yielding higher returns typically involve more risk. | ||
Be highly suspicious of any "guaranteed" [number-go-up to-the-moon] "investment" opportunity. | ||
source: https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme | ||
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Ponzi scheme "red flags" - Avoid too-good-to-be-true "investments" with claims like: | ||
- "To the moon! To the mars!" | ||
- "Number go up!" | ||
- "Yearly return of 300+% in 2020!" | ||
- "Could quadruple in 2021 and rally to $100,000!" | ||
soure: https://www.investor.gov |