Pyramid Scheme

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Dictionary Says

Definition of 'Pyramid Scheme'

An illegal investment scam based on a hierarchical setup. New recruits make up the base of the pyramid and provide the funding, or so-called returns, given to the earlier investors/recruits above them.
Investopedia Says

Investopedia explains 'Pyramid Scheme'

A pyramid scheme is initiated by an individual or a company that starts recruiting investors with an offer of guaranteed high returns. As the scheme begins, the earliest investors do receive a high rate of return, but these gains are paid for by new recruits and are not a return on any real investment.

From the day the scam is initiated, a pyramid scheme’s liabilities exceed its assets. The only way it can generate wealth is by promising extraordinary returns to new recruits; the only way these returns can be paid is by getting additional investors. Invariably these schemes lose steam and the pyramid collapses.

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'Pyramid Scheme'

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    http://www.investopedia.com/video/play/what-is-a-pyramid-scheme
    Videos /. What Is A Pyramid Scheme? Next video: How To Calculate The Tax You Owe.
    Find out how this financial scam works and why you should watch out. ...

  • What Is A Pyramid Scheme?

    http://www.investopedia.com/articles/04/042104.asp
    What Is A Pyramid Scheme? December ... It is estimated that 90% of people who get
    involved in a pyramid scheme will lose their money. (Lower ...

  • What is the difference between a Ponzi and a pyramid scheme?

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    ... What is the difference between a Ponzi and a pyramid scheme? Pyramid ... products.
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  • 6 Red Flags Of A Financial Scam Slideshow | Investopedia

    http://www.investopedia.com/slide-show/6-red-flags-financial-scam/pyramid-scheme.aspx
    ... right? These promises are hollow, and the scams often have you recruit
    more people to post ads, and so on - a pyramid scheme. If ...

  • The Ghouls And Monsters On Wall Street

    http://www.investopedia.com/articles/06/monstersonwallstreet.asp
    ... While this smacks of what we have come to think of as a pyramid scheme, it is actually
    a creature of a different breed – what is now called the Ponzi scheme. ...

  • Affinity Fraud: No Safety In Numbers

    http://www.investopedia.com/articles/pf/09/avoiding-affinity-fraud.asp
    ... Many leaders of these groups trust the scammer and unfortunately help spread the
    scammer's message. A Ponzi scheme is similar to a pyramid scheme. ...

  • 6 Red Flags Of A Financial Scam - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1110/6-Red-Flags-Of-A-Financial-Scam.aspx
    ... right? These promises are hollow, and the scams often have you recruit
    more people to post ads, and so on - a pyramid scheme. If ...

  • Benefit From A Winning Investment Club

    http://www.investopedia.com/articles/younginvestors/09/investment-clubs.asp
    ... raised and lost 20% of the clubs funds. (Read What Is A Pyramid Scheme? before
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  • 4 History-Making Wall Street Crooks

    http://www.investopedia.com/articles/stocks/09/criminals-of-wall-street.asp
    ... portfolio. Learn more in High Yield, Or Just High Risk?). But what he was doing
    was nothing more than creating a complex pyramid scheme. ...

  • What Is A Ponzi Scheme?

    http://www.investopedia.com/video/play/What-Is-A-Ponzi-Scheme
    Videos /. What Is A Ponzi Scheme? ... Tax Evasion. Protect yourself from scams by
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