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In a recentblog post, Kiyosaki discussed the dangers of Ponzi schemes and how to protect yourinvestmentsfrom fraud.
One of the Ponzi schemes Kiyosaki discussed was Social Security.
Is there truth in this statement?
What Is a Ponzi Scheme?
The phrase Ponzi scheme dates back well before Bernie Madoff defrauded investors out of $65 billion.
Between 1882 and 1949, Charles Ponzi, an Italian immigrant, found a loophole in currency exchanges.
He promised investors double returns by buying coupons overseas and cashing them in within the United States.
This is the basic principle of a Ponzi scheme: using one persons money to repay another.
How Does Social Security Compare To a Ponzi Scheme?
Wages from the working class are subject to Social Security taxes.
These taxes are then funneled to older generations to supplement their retirements.
Unlike Bernie Madoff and Charles Ponzi, Social Security is a legal program in the United States.
Most Ponzi schemes are not foolproof, with the curtain eventually being pulled back.
The same situation comes off as unfolding with Social Security.
The Social Security Administration predicts that the trust fund will be depleted by 2035.
What Do Others Say?
This established the average age of death as below the 65 years of age required to claim SSI.
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