Education·7 February 2026·5 min read
The Ponzi scheme — the fraud that never dies
You pay old investors' returns with new investors' money. It works — until it collapses.
A Ponzi scheme (after Charles Ponzi, 1920s) promises big, fast returns. But there's no real investment: new entrants' money is used to pay the old ones.
Why it always collapses
The scheme needs ever more new money to work. The moment not enough comes in, it all collapses and the last entrants lose everything. The golden rule: if a return seems too good to be true, it is.
No real investment pays huge guaranteed returns. Whoever promises that pays you from the next victim's pocket.
