The Ponzi Scheme — Returns from nowhere

The first investors always get paid. That is the bait. They tell friends, who tell friends. The pool grows. But no business generates the promised returns. New investors' money flows to old investors. When new money slows, the structure collapses. The maths guarantees it.

• The Saradha scam in India (2013) took about 2,500 crore rupees from millions of depositors.
• If anyone promises returns above the bank rate with no risk, ask one question: where does the money come from?