Pyramid

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

In our time in the world there are a huge number of different financial structures that promise their depositors this or that "reward" in the future, as a rule, much more than you can get with a bank deposit. One of these structures is the financial pyramid. Sometimes it is called investment, but this does not change the essence of the matter.

In Russia, there is no direct ban on this kind of activity, although S. Mavrodi once did everything to ensure that the phrase "MMM financial pyramid" was remembered for a long time by many deceived investors. There is an expression "History teaches that it teaches nothing." The new financial pyramid Mavrodi, which he organized in 2011-2012, again found those who wanted to get fast and fabulous profits, and there are still people who believe that MMM is a unique chance to secure their future.

What is a pyramid scheme?

All existing organizations of this kind belong to one of two types:

Ponzi schemes
multilevel pyramids

The Ponzi scheme got its name from the name of the enterprising American Charles Ponzi, who launched such a pyramid scheme in the United States back in the early 1920s. Despite the fact that such schemes were known before that time, it was the financial pyramid of C. Ponzi, due to the participation of a large number of people, that received very wide publicity in the United States.

The principle of its work is that the organizer promises potential participants to invest in the project, while promising a "guaranteed" and very high income in a relatively short time. Participants do not need to attract new partners - they just need to wait a certain period. At the beginning, when the number of people in such a project is small, the organizer pays them money from their own pocket, then satisfied old participants begin to invest again, rumors of incredible profits spread and the number of applicants increases. As soon as the flow of new participants begins to noticeably weaken, the organizer appropriates all the money and hides. According to this principle, the MMM company and the investment firm of B. Medoff were organized.

Multilevel financial pyramid works a little differently. Under this scheme, each newcomer must first make an entrance fee. This amount is immediately divided between the person who invited such a newcomer and the earlier members of the pyramid who invited the already invited one. After the initial payment, the newcomer is required to attract at least two more people, and this process continues fromevery new level. Sooner or later, such a multi-level pyramid also collapses. The reason is quite simple: for such a structure to work, it is necessary that the number of participants grow exponentially, i.e. very fast. For the first 10-15 stages, even the entire population of the country may not be enough. Therefore, about 80-90% of the participants after paying the entry fee are left with nothing.

How to recognize a pyramid?

With the development of the Internet, there are more and more various projects offering quick and guaranteed money, while practically not wasting your time. And there are people who believe these promises, transfer money … and then puzzle over how to get it back. In each of us, deep in our hearts, there is a child who wants to believe in a miracle, freebies and super profits. So this is what happens…

In order not to fall for the bait and lose your savings, you need to check three things with the project you are interested in:

1. Do they promise huge profitability in the project? If the promised profit should be more than 30% per month, then this is the first sign of a pyramid.

2. Powerful advertising and PR. Pyramid organizers always seek to attract as many people as possible at first.

3. Ease and simplicity of logging in, coupled with a small fee.

There are a lot of financial pyramids now, they exist on average no more than five years, and then reappear under a new name or in another place. You can earn in them only if you are lucky to be among the firstparticipants, however, is it worth it at all? I believe not, and I hope you will absolutely agree with me.