The Secrets of
Business and Marketing Wizardry Newsletter
Volume 9, Issue 4, Date 4/5/2005
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The Business & Marketing Wizardry Newsletter
Volume 9 Issue 4 April 2004
Publisher: Joe Trevison MBA/CPA
Co-Publisher/Editor: Cheri Carlson
Co-Editor: Jim Trevison, Student, Edinboro University, English Major
"The Ponzi Scheme"
Joe Trevison, MBA/CPA
"The Ponzi Scheme" By Joe Trevison MBA CPA
The Ponzi scheme is the granddaddy of most twentieth-century cons. Perpetrated in 1919 by Charles Ponzi, this scam spawned generations of pyramid schemes. Everything from chain letters, business opportunity scams and shady MLM transactions can trace their roots back to Ponzi.
So what is the Ponzi Scheme and how did it work? Basically, Charles Ponzi opened a company, the Securities Exchange Company, which issued low-cost ($10) promissory notes, and promised a 90-day repayment plus 50% interest. Well, needless to say, it would be hard for any investor to resist such a phenomenal idea and speedy rate of return.
Ponzi then threw out the second lure in which he repaid the notes in 45 days, instead of the original 90 days promised. The first investors were so thrilled; they re-invested their money and urged others to do the same. Thousands of people followed suite.
Over a period of eight months, Ponzi raked in $15 Million! He was hailed as the "little people's savior" and a great financier. But, as was bound to happen, people started losing money, and Ponzi eventually ended up in jail.
Why? Because Ponzi's scheme was just a dream bound for disaster. Ponzi's company was created out of thin air. He had no start-up money of his own, no operating capital, and no products or services to sell. He was paying off his first investors with monies brought in by the second wave of investors, the second with third, and so on down the line. Eventually, he ended up with more people to pay than people paying in. He was "robbing Peter to pay Paul."
I first wrote this for a web site forum. There were so many people selling a Ponzi scheme. This plus several other people on this forum got these people who were selling this nonsense off of this forum.
This forum may be of interest to you. It asks for advice on some of the guru's you see on infomercials. You can read very intelligent replies from people that tried the program.
http://www.papersourceonline.com/discus/messages/1649/1649.html Try this if you want to learn more about the site. My post is no longer there because of time elements and some of the same people got on it so the whole thing was deleted.
May Issue:
"Did You Even Try Brainstorming?"
Joe Trevison MBA/CPA
P.S You might be interested in some of my book on taxes these are not tax information you can get free at the IRS. These are the things that won't tell you and the ideas are timeless.. There are two tax books and one tax booklet. Prices start at $5.95. Oh I almost forgot http://www.Joetrevison.com/shop
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| Copyright Joseph J. Trevison Not to be reprinted, resold, or
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