STREET DOGS: Lure of Ponzi schemes
The ‘Ponzi’ label, though, wasn’t coined until 1920 when Charles Ponzi’s investment fraud came crashing down
People continue to be lured into Ponzi schemes. There’s better information available to everyone today than at any time before. And yet Ponzi schemes continue to thrive. Why? The reason is simple: They thrive on human nature. Ponzi schemes, at least in some form, probably date back a few hundred years. The "Ponzi" label, though, wasn’t coined until 1920 when Charles Ponzi’s investment fraud came crashing down. His outsized returns on postal reply coupons lured many investors with promises of a 100% return on their money every 90 days. In reality, he was paying old investors with new investors’ money and keeping plenty for himself. It was a scam. The Ponzi label stuck and is still used today. Back to the question, why do so many investors continue to fall for these schemes? To reiterate, human nature is probably to blame. A few thoughts come to mind. Seeking something better is human nature, and it’s not always greed. More money can mean a secure retirement or the ability to pay for ...
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