Recently, I saw people discussing investment opportunities, and it reminded me of a topic that absolutely has to be talked about—Ponzi schemes. These scams have been around for hundreds of years, and even now they keep changing their tactics to trick people.

When it comes to the origin of Ponzi schemes, you have to mention Italian immigrant Carlo Ponzi. Back in the 1920s, this guy ran a classic case in Boston, claiming that investing in postage stamps could make big money. He told investors that he could buy and sell stamps at prices higher than the market rate—so what happened? There were no real stamp transactions at all. He was simply using money from new investors to pay earlier investors, creating an illusion of “making money.” This trick has been used up to today, which is why it was named after him—схема Понці.

Later, there were other big scammers like Bernie Madoff, who used the same method to defraud tens of thousands of investors out of billions of dollars. In plain terms, the basic pattern of these scams is: first, use new investors’ money to send “returns” to early investors, making them feel like this is legitimate, and then attract even more people to follow the crowd. Once there’s a moment when no new people are coming in, the whole system collapses, and most people end up losing everything.

So how do you identify this kind of scam? Generally, there are several clear signals. First, they always promise ridiculously high rates of return, with risk that’s especially low. Second, they’re vague and evasive about how your money is being used to earn profits. Third, they’ll push you to invest quickly and try to get you to bring in more people, promising that you can earn a cut from it. The final signal is that when you try to withdraw your own money, you’ll run into all kinds of problems.

If you encounter an investment opportunity like this, my advice is simple—run. If it sounds too good to be true, then nine times out of ten, it’s a scam. Real, trustworthy investment opportunities won’t be so eager and won’t make you feel like you’ll miss out if you don’t invest.

The most effective way to protect yourself is to learn more about this. Before putting any money in, make sure you thoroughly understand the company or project—figure out how it operates and who is running it. Don’t invest money you can’t afford to lose. If someone pressures you to recruit new investors, that’s absolutely a danger sign, because Ponzi schemes rely on continuously bringing in new people to keep going.

Most importantly, don’t be greedy. Those “risk-free, high-return” promises are basically traps. Real financial security comes from rational decisions and a thorough understanding of information—not luck. Protect your money and stay away from anything that looks like a схема Понці.