House Of Cards | Ponzi Schemes

Recent news has carried two high profile accusations of fraud against  well respected, high profile and succesful members of the business world. The cases of Bernie Madoff and Allen Stanford shocked the globe with the sheer magnitude of alleged fraudulent activities. For those not in the know, both men have been accused of running a so called 'Ponzi Scheme'. In such a scheme investors are lured with a high (unrealistic) return but upon maturity of the investment, this is paid with the money of new investors. It's an old system and like it's close friend, the 'pyramid scheme', it is destined to fail at some point.

Lessons to be Learned

Obviously the newspapers and TV stations are running plenty "buyer beware" stories and the mantra being oft repeated is "If something seems too good to be true, It probably is".

I however would like to make a more basic point, though one that is vital to everybody who wishes to accumulate large personal wealth. Long term financial success can only be based on honesty. Sure there may be circumstances where you may be forced into telling a 'white' lie, but there is no chance for people who are deliberately dishonest. Given time, lies catch up with those who tell them and it is NEVER worth risking reputation or freedom to do so.

In all your day to day dealings, try to be as honest, open and trustworhty as possible. For those that manage this, the road to riches and lasting happiness will be smoother than you think.