Some words about a financial pyramid

Some words about a financial pyramid

Some words about a financial pyramid

Each of us at least once heard about such concept as «a financial pyramid». Nevertheless, not each of us knows that this concept designates actually and what exactly it means by itself. So, financial, or the investment pyramid is way of providing the income to participants of structure because money are constantly involved. The income is paid to the first participants of this pyramid for the account of deposits of all subsequent clients which take part in a financial pyramid. In most cases the true participant of obtaining the income, as a rule, is not disclosed.

In an investment pyramid profitability which it is impossible to hold too long time is often promised, repayment of obligations to all participants of a pyramid becomes obviously impossible.

Rather often financial pyramids are registered as commercial structures or establishments and involve money for financing often the doubtful project. In case real profitability is much lower, than that which is promised investors, or in general is absent, means, the lion’s share of means of new investors leaves on paying the income. A natural result of similar succession of events is bankruptcy of the project, and also losses of the last investors. Unfortunately, in our country there is no direct ban on this sort of activity.

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