Lesson:How a Ponzi Scheme works/ExerciseL1

Listening Exercise

Watch the video and complete the text according to what you can understand.

So, you may have about Ponzi Schemes in the news. Everybody they're illegal but you might not how they work. So, Ben is here to show us. To start off, Ben a few people to invest their money with him. At end of the year he those clients amazing returns that beats every other in the market. Needless to say the investors are thrilled. In fact they're so ecstatic all the money they're making that they tell all friends and family about it too; who tell their friends, who tell their friends. In the market, most investors make money some years and money others. But Ben's Ponzi Scheme, yeah, it never loses money. In fact, it beats the market by a huge margin, but the returns he pays to these people aren't from profits. He just takes the money, these new guys invest and gives it to these guys. But as he can't get enough new money from this group to pay these people then the pyramid starts to crumble. Because they're not getting paid . Ben and these guys who invested first made a killing but these lost all their money. So, the next time a guy like Ben to get you to invest in something that sounds too good to be , it probably is. Just ask Ben.