Man, Mother and a Ponzi

Thirteen (13) months before a PONZI offering 10% crashed, a man invested $100,000. Each month he logged on an showed his mother his returns. Every day he pressured his mother to put in  $100,000, telling her that she should only invest what she could lose.

Tired of the pressure, she relented and 3 months before it crashed she invested $100,000. She opted to compound it too as her son had shown her “his big pay day” in a couple months. One (1) month before the PONZI crashed, the man encashed his interest ($213,842.84) and redeemed his principal of $100,000. The next month the the PONZI crashed.

Then he was heard telling his mother “don’t worry, things happen, you win some you lose some”. Only invest what you can afford to lose. Pity he did not know that his mother’s $100,000 investment helped to pay for his interest payment.


Time Line illustrated:

  • Month 01 – Man invests $100,000
  • Month 10 – Mother invests $100,000
  • Month 12 – Man collects $100,000 + $213,842.84 
  • Month 13 – Crash:  No – Payments,  Excuses: Banks, FSC, Due Diligence, Media and Bad Mind
After a few months of excuses the truth is told: PONZI crashed in Month 13
  • Month 16 – Scheme declared Dead- We are unable to pay, Receiver steps in
  • Month 17 – Receiver finds that payments to investors  were being made by money taken from other investors. (see What Happens to the Money in a Ponzi Scheme? )

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