The "Ponzi scheme" created by Ponzi is not clever, so why can it succeed so often?

Ponzi scheme is a fraud method that we are very familiar with. If we use a popular analogy, this scam is basically demolishing the east wall to repair the west wall. If the east wall is finally demolished, then initiate The perpetrator took the money and ran away, eventually leaving all the victims' money in vain. The reason why Ponzi schemes are so successful is actually very simple. The first is the concealment of the Ponzi scheme. People who invested in the early stage were unable to discover the fundamental purpose of the Ponzi scheme and did not know that it was a Ponzi scheme. By the time they discovered it, it was too late. Secondly, the Ponzi scheme defrauds not the early investors’ money, but the later investors’ money. It can be said that early investors can even get benefits. Finally, there is the instability factor of the Ponzi scheme. Neither investors nor scammers know when the east wall will be dismantled, and when it will be dismantled.

The first is the concealment of the Ponzi scheme. People who invested in the early stage were unable to discover the fundamental purpose of the Ponzi scheme, and they did not know that it was a Ponzi scheme. By the time they discovered it, it was too late. The author gives the simplest example of the so-called Ponzi scheme. For example, I find 10 people and tell them that each of you will give me 100 yuan, and after 7 days you can earn 10 yuan. In the first month, I used the money in my hand to pay each investor 40 yuan. Then after investors get benefits, they will definitely introduce people around them to join. Slowly I started to have more money. 10 people join in investing every month. If no one joins in investing after one year, it means that my capital chain is broken. Then I will take the money and run away. In the end, only me and a few early investors really made money. If you consider the principal, then I am the only one who really makes money. This is basically a simple Ponzi scheme.

Secondly, the Ponzi scheme defrauds not the early investors’ money, but the later investors’ money. It can be said that early investors can even get benefits. The example I gave just now proves that after I finally ran away with the money, what I took with me was the money of subsequent investors. In fact, in a Ponzi scheme, the money of later investors is used as benefits to early investors. When no investors join, the foundation of a Ponzi scheme is shaken. Slowly the nature of the scam became apparent.

Finally, there is the instability factor of the Ponzi scheme. Neither investors nor scammers know when the east wall will be dismantled, and when it will be dismantled. Because no one knows when the investors will disappear completely, neither the initiators nor the investors know when the east wall will be demolished. By the time the investors discover something is wrong, the initiators and the money have all disappeared.