Where does the payout money come from?
This is the one question that separates an investment from a return trap. If a scheme promises to pay more than it earns, the difference has to arrive as new deposits. The numbers below show how quickly that becomes recruitment work rather than investing.
Enter the numbers
Above the best long-run professional record
No supervised product guarantees this. To pay it, somebody has to take market risk, use leverage, or use new deposits. Once it is advertised as fixed or risk-free, the arithmetic and the promise are no longer the same thing.
| Schedule running for | Payouts owed in total | Against the pool |
|---|---|---|
| 1 month in | $1.5K | 0.01x the money ever collected |
| 6 months in | $9.0K | 0.09x the money ever collected |
| 12 months in | $18.0K | 0.18x the money ever collected |
| 24 months in | $36.0K | 0.36x the money ever collected |
| 60 months in | $90.0K | 0.90x the money ever collected |
Nothing here produces a return. The 'profit' paid to earlier depositors is the deposit made by the next one; the schedule works exactly as long as recruitment keeps up, and it always fails the moment it does not.
Payout per period = pool x rate. Fresh deposits needed = payout / average deposit.
The red line
A guaranteed return higher than a Treasury bill or an insured deposit cannot exist. Every dollar paid above the risk-free rate is paid for with risk, leverage, or other people's deposits. A published promise of a fixed return above the risk-free rate is the definition of a return trap.
Reading the result
- The model is deliberately minimal: no trading, no revenue, only the pool of deposits and the payment schedule. Any scheme that also earns money would show up as a smaller funding gap; none of the entries on this register get close.
- The last metric is the one to remember. A turnover above 1x a year means the scheme must collect more in fresh deposits every year than it has ever collected, just to pay the interest.
Questions this calculator answers
- What is a Ponzi structure, in one sentence?A structure that pays earlier depositors with money taken from later ones, which works only while the number of new depositors keeps growing.
- How is this different from early investors in a real company?A real company's payments come from revenue or from a buyer paying for the business. Here the money comes from the next depositor's principal, and the schedule has no source other than recruitment.
- Why do these schemes sometimes pay for months?Because paying on time is the cheapest advertising they can buy. Regular payments recruit the next round and let the operator raise the withdrawal limits and lock-up periods before the collapse.
These are arithmetic tools, not investment advice, and no calculator can tell you whether a particular operator is honest. What the arithmetic does show is whether the advertised return could come from a supervised product at all. To see the returns that are being promised in the wild, read the register, or the method and math page for how entries are built.