Career - Invest for 3 years

[Spirits Away]

I've heard that there's a system whereby a startup investor (non-stock related) can bid money (say, $36000) in order to live 2-3 years. The time not working is for them to spend time on their own plan to make money with a high return.

 

Here is how it works. 72 people put $450 in order to accumulate $32400, then the money is placed as a bid. The person who won the bid can get all $32400 to do his own stuff for 3 years. When the 3rd year ends, the person who bid on the money has to pay an addition of $3600 (like interest) for the 72 people who placed the money for the bid.

 

You guys know what these type of bidding is called? Anybody have access to it?

[DN]

Sounds like it should be called 'scam'.

[Spirits Away]

I hope this doesn't diverge into another topic. I'll re-write what i wrote

 

Here is how it works. 72 people put $450 in order to accumulate $32400, then the money is placed as a bid. The person who won the bid can get all $32400 to do his own stuff for 3 years. When the 3rd year ends, the person who bid on the money has to pay an addition of $3600 (like interest) for the 72 people who placed the money for the bid.

[avman]

This is a variation on the classic "Ponzi" scheme. It is an illegal pyramid scam designed to steal your money.

[Spirits Away]

For some reason, it seem very logical.

I just thought if it's legally handled, this would be workable.

[melrich]

Yeah definitely pyramid type scheme. Stay away from it.

[Spirits Away]

okay

[DN]

Basic rule of thumb: if it sounds too good to be true - it is.

[Spirits Away]

I'm still thinking about it... I'm thinking that the reason why it's illegal is because Ponzi didn't keep his words and eventually, the government banned this scheme. It also somehow relates to taking advantage of foreign currencies, which a normal person without any legal knowledge shouldn't play with it.

 

here is the article

 

Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.

 

I'm still wondering if it's the system that's illegal or if it undergoes some legal documents, it would be okay. Cause I heard people are doing this in the US in order to accumulate money for their new business venture. It doesn't sound like a scheme when you're getting basically a 10% return on a 3 year investment. Perhaps it's only done within families & relatives?

[avman]

It's illegal because you are NOT getting a 10% return. What happens is you pay your money, then the person who "bid" on it vanishes. The person who placed the bid is part of the scam.

 

It is a complete fraud. But hey, it's your money.

[Spirits Away]

That's why there are legal documents to handle. Okay, i'll stop thinking. Awesome piece of knowledge to know. Btw DN, i thought you were joking at first, so out went my 2nd post.

[DN]

Legal documents are of no use when the scam artist is living incognito in a luxury hotel in Rio on your money.

 

Remember P.T. Barnum's dictum: "'There's a sucker born every minute."

[arwen]

There is a big case going on in Holland-- a top person in the tennisworld did the same 'trick', and now his debt is 111 milion Euros. You won't believe the companies that invested in this private-- even one of the top hospitals.

 

I work in finances, this IS like a pyramid construction and OF COURSE they will bring it like it is NOT.

 

Don't invest anything in this.

 

Ilse.

[jackknive]

did you ever hear of sticker letters when you were a kid? send 40 stickers and like 50 other kids did too... then when its ur turn... u get 10000 stickers...

 

same basic concept here. I would never try something like that

[lonelyandblue]

Can you say pyramid scam??? Do not just look away....RUN!!!

[Spirits Away]

Another question: what do you guys call those people who lend you money but expects absurdly high interest in return?

[DN]

Criminals

[avman]

Loan Sharks

[benevolent]

Sopranos?

[darkblue]

Yogi bears.. What is wrong with those replies lol.

 

They are loan sharks - which are criminals.

 

This is a pyramid scheme/scam. Tell any of your friends that may be interested too, to stay clear.

[ComputerGuy]

This is whats known as a pyramid scheme. The people at the top get rich, the people at the bottom (you) lose everything.

[skyjuice]

Hi,

 

If you still want pursue into this scheme, it is better for you to ask around first.

 

For example, you could ask the Consumer Association whether there is a report on this scheme or not.

 

To add, you could also ask News Paper to interview them. They would not be scared to be interview if they are legitimate.

 

This is my humble 2 cents. Hope its help.