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Ever wonder what a Ponzi Scheme could look like?

Dr. Jim Dahle of White Coat Investor received an email from a reader in which they outlined what seemed like an investment opportunity that was simply too good to miss.

After just two minutes, Jim decided it was pretty fishy. And if you follow his analysis, it definitely looks suspicious.

Don’t Invest in ‘Too Good to Be True’ — Lessons Learned from an Alleged Ponzi Scheme [White Coat Investor] – “‘I don’t know anything about it. Feels too good to be true, doesn’t it? I wouldn’t invest for that reason alone. I mean . . . if you get a 100% return every 18 months, that’s the equivalent of an annualized return of 59%. At 59% returns, you would own the entire world in less than a lifetime. But the pro-forma shows a 29% average return. Still pretty darn high. With those sorts of returns, a doctor saving half his income could retire in like three years.'”

Turns out the whole operation may have been a ponzi scheme!

The lessons learned section (near the bottom of the post) are solid bits of wisdom.