To Ponzi or not..

Comments keep surfacing in the newsletters and emails talking about online fraudsters and Ponzi schemes.

So, just what was a Ponzi scheme. According to WIKI “A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments to investors.”

We have the example of Charles Ponzi back in the early 1920′s with his postage stamp scheme, and of more recent times Bernard Madoff who ran the biggest financial investor ponzi scheme ever from the 1980′s to December 2008 with an estimated fraud value of $21 billion.
But, we have to point the finger at Charles Dickens as the originator of the scheme idea in his 1857 book “Little Dorrit” – not that the esteemed author had any intention of defrauding others outside of the pages of that book!

Well, that sets the background somewhat.

What are often referred to as Ponzi scams online are probably more simply described as schemes to confound, confuse, befuddle with aimless detail, to provide insufficient information for a clear process to be engaged, constantly offering upgrades to get the better result, and similar processes attached to an initial “sounds good” invitation to get involved. In other words a scam designed to extract as much money from the aspiring on-line marketer as possible before the scheme is cast aside and the hunt goes on for the next inviting proposal.
Oh, and let us not forget those offers of coaching using OPM (other people’s money – aka your credit card). The author is not saying there are no genuine offers out there, just that without due diligence you are going to be helping fill the coffers of the unscrupulous.

Which brings the author to his personal stand – if it’s so good, why not a Joint Venture! Always the answer – we don’t do JV’s – tells you a lot, huh!