Madoff scandal in the end of 2008 is another bad news for this economy. It seems that all the ugliness come out when the curtain is open. The people that lost their money in this Ponzi Scheme are financial advisors and bank experts. How come those people can get into deep trap of this ponzi scheme?
“A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned.” from wiki. It looks simple in this summerized one sentence, but it could be really tricky when you get into it. I think these investors of Madoff are not dumb; they should be smart people, otherwise they won’t be so good at their work. For something easy like this Ponzi scheme, they should be able to realize the truth at the back. The problem is that they get blind, when they first see the hugh return and lost themselves. This is one of the weakness of human beings. The desire for more makes people get into bad situation and led them away from the best position. When the executive of the Madoff made the investor believe that they can earn more money, they just put more into this black hole and never seen it come back. The other kinds of scheme are doing the same thing. They draw money from people by taking advantage of their desire for money.
Several my friends joined a financial company that sells financial products to their customers. This company is using multilevel pyramid scheme, which is similar to Ponzi scheme, but this one requires keep developing new members to join in. Under this scheme, the lower level people basically just give their money away to the head. The most disgusting thing is that they only take international people. I think because some international people are not very familiar with this scheme and they also need more money. But they should target at students. That is just wrong. Another thing about this scheme is that they have some power that close to religion. They make their staff really believe what they are doing and let them try to get more people, so they go out and talk to families. That is why I don’t like this scheme. It not only takes away money, but also your mind is controlled.
Take a deep breath and have a clear mind; We need to know when we should stop chasing for money. Now I think what we learn in class about “Keeping a skeptical mind” is very practical. This is very important to most people, not only the Madoff guy.
