What is a Ponzi Scheme & how can you identify it?
I am sure you must have heard about this term before! Well remember Speak Asia?, it was a kind of ponzi scheme which looted many people.
People get driven away as these schemes offer high returns – many a times they will tell you that your money doubles in just one year or even less! Impressive isn’t it? All you will have to do is pay a small amount and start making members under you which may or may not deal with selling of any products. All you have to do is get more people join under you and you keep on getting commissions.
Here is how you can identify a ponzi scheme or in desi term “bogus scheme”:
- Ponzi scheme generally indulges in Multi-Level Marketing (MLM)
- The scheme is not registered with the SEBI or any other regulator for that matter
- The money/ commissions offered by them are too good to be true [Example – double your money in just 6 months, etc]
- Companies registered outside India but have operations in India, without an office in India.
There are various other signals which can help you find out a ponzi scheme. Feel free to comment and share about such signals.
Here is an infographic on Ponzi Scheme:
One should remember this “No pain No Gain” most of the people who are rich have worked very hard and smart to build their empire and there is no shortcut for any one. [ Check out: List of Top 10 richest people in India]