Ponzi Scheme Tierlist

Short video about a few Ponzi schemes and whether or not I would have fallen for them

Kofi link: https://ko-fi.com/stoicstick

Ponzi Scheme Tierlist Transcript:

Ponzi schemes are fraudulent investment opportunities that promise exceedingly high returns in a very short time-span, but most people would like to believe that they wouldn’t fall for one if they were presented the opportunity, well that’s what we will be looking at today, I will be going through a list of some popular ponzi schemes over the years and ranking them based on how convincing they are and how likely I would be to invest in these scams. And before you chime in with a Well I would never invest in a ponzi scheme I can make a pretty safe bet that you have already invested quite a few shekels into one of if not the largest ponzi schemes, but more on that later, the tierlist we have will consist of 5 levels, starting with Would Bet Against, Wouldn’t Invest, Would Invest and YOLO my life savings. for now lets start with the origin of the name of the ponzi scheme.
Charles Ponzi although not the first to create a ponzi scheme was the person who popularised the name. He grew to notieriety from his postal arbitrage investment, now for those of you who arent experts in investing like me, (lost 1.4k in 5 seconds) arbitrage is where you buy a product at one price in one market and look to sell it for a higher price in a secondary market, and the profit is the difference in prices. Charles claimed he was buying international postal-reply coupons from Italy which because of world war 1 were severely underpriced compared to the equivalent in the US, with this arbitrage he claimed he could make around 400% returns after exchange rates etc. and this was actually true based on the differences in prices of the stamps. So Charles setup a company and started taking in investor money claiming he could double their investment within 90 days which he did, and continued to do with all the new money coming in from new investors. There was a small problem though, you cant actually redeem those international reply coupons for money and he knew that too so he didn’t buy any. But with all the money coming in from other investors it was easy to pay back the returns for earliest investors especially when most people who invested, chose to reinvest any profits that they made. His scheme ran for around 8 months before someone decided to actually check and see if all the money that Charles was depositing into banks was still there, and sure enough most of it wasn’t. Obviously this led to the implosion of his scheme and the fallout from his scam cost his investors on average 70% of all the money they invested as well as causing 6 banks to fail. In the end he plead guilty to 86 counts of fraud and was sentenced to 5 years in federal prison of which he only served 3 and a half. So he enjoyed quite a luxurious lifestyle for about 6 months and all it cost him was around 3 and half years, but it cost his investors about 300 million in todays money. I would probably say most people myself included would have invested with Charles, seeing his primary investors paid out and the ridiculous hype surrounding him would have had most people fomoing in very quickly and would probably lead me to doing the same so its going to go into the YOLO my life savings tier.
Next we have the Yilishen Tianxi Group Ponzi or more colloquially known as the ant farm ponzi. The Yilishen Tianxi group manufactured traditional Chinese medicines, including an aphoridisiac that required a lot of a certain species of ant. The group offered the opportunity to buy some ant farms in a box, and if you fed them and grew them the company offered to buy the ants back in about a year for around a 30% profit. For reference most Chinese families mostly invest in gold or property that only have a yield of around 8% a year so 30% was a lot. I don’t know if you need me to tell you this but similar to ivory tusks, medicine made from crushed ants don’t actually work, so the aphrodisiac product was a commercial failure and the profits payed out to investors in good ponzi fashion was only paid out from the investment of later investors. The scheme ran from 1999 to 2007 and eventually went up in flames like they all do, with around 200,000 people being affected with a total of $1.2 billion invested in the scheme. The mastermind behind the scheme was called Wang Fengyou, which I mean, the guy selling ant Viagra being called wang is just comedic gold. Wang when caught was sentenced to dth and most of his company managers were also sentenced to long prison sentences, say what you want about China but they definitely know how to apply the dth penalty, just imagine if the US also was this hard on financial crimes, Sam Bankman Fried and Caroline Ellison definitely deserve the dth penalty for the $10 billion hole they created and if not for the crimes I think just for being such an affront to the eyes they deserve it.