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| MMM Nigeria |
What Is A Ponzi Scheme? Business Dictionary aptly defines a Ponzi scheme as a SCAM in which a GULLIBLE
group is enticed with the promise of very high returns in a very short time,
but is actually based on paying off the early 'investors' from the cash from
(hopefully ever increasing number of) new 'investors.' Investopedia reconciles a Ponzi scheme with a pyramid
scheme in that both are based on using new ‘investors'
funds to pay earlier participants. Essentially, such schemes are synonymous
with ‘’Robbing
Peter to Pay Paul’’. A typical Ponzi scheme flops when the cash
outflow exceeds the cash inflow. Ponzi scheme is named after Charles Ponzi
(1882-1949), an Italian immigrant to the United States who, during 1919-20
collected more than fifteen million dollars from some 40,000 enthusiastic depositors
by promising to double their investment in 90 days.
