Selling Jesus - The Ultimate Pyramid Scheme

[handmade34]

13. in my email this morning...

it fits...

5 Key Elements of a Ponzi Scheme

The Benefit: A promise that the investment will achieve an above normal rate of return. The rate of return is often specified. The promised rate of return has to be high enough to be worthwhile to the investor but not so high as to be unbelievable.

The Setup: A relatively plausible explanation of how the investment can achieve these above normal rates of return. One often-used explanation is that the investor is skilled or has some inside information. Another possible explanation is that the investor has access to an investment opportunity not otherwise available to the general public.

Initial Credibility: The person running the scheme needs to be believable enough to convince the initial investors to leave their money with him.

Initial Investors Paid Off: For at least a few periods the investors need to make at least the promised rate of return — if not better.

Communicated Successes: Other investors need to hear about the payoffs, such that their numbers grow exponentially. At the very least more money needs to be coming in than is being paid back to investors.