A poor boy born into an ordinary family, through the summer vacation to earn $5,000 to open a company, and then with their own ingenuity quickly rose on Wall Street, and successfully attracted the attention of the world's top rich, everyone lined up to ask him to help manage funds, no one asked him how to operate, no one asked him the principle of making money, no one asked where the funds went, tens of billions of dollars of money was given for more than 20 years, no one ever doubted.
The boy is almost zero cost, he easily leveraged the wealth of the world's richest people, changed his life against the sky at an unimaginable speed, reversed the trajectory of life, and finally the beauty was in his arms, sitting on hundreds of billions of assets, enjoying a reputation all over the world, fame and fortune, and becoming an "investment god" with the same name as "stock god" Buffett.
Seeing this introduction, did you think you were reading a synopsis of a yy novel? In fact, this is the real experience of Bernard Madoff, a legendary man on Wall Street in the United States.
In more than 20 years, through good word of mouth, mysterious image, stable returns, he created an earth-shattering scam, playing well-known banks, famous fund companies, and global investment tycoons in various countries, with a fraud amount of up to $65 billion, if it were not for the "subprime mortgage crisis" in 2007, his scam would not have been exposed to death. Today I will tell you about the legendary life of Madoff.
In 1938, Madoff was born in New York, the United States, an ordinary Jewish family, and when he came of age, he happened to encounter the golden age of the economic development of the United States after World War II, and there were opportunities to make money everywhere, and Wall Street also woke up from the previous depression.
Wall Street is full of gods, and it is difficult for an obscure little person like Madoff to get ahead, but he inadvertently finds a shortcut to getting rich. Stocks in that era were all manual, very slow to do, and needed to hire a lot of traders, which invisibly increased the transaction cost.
▲ Stock of Stu warner Air Conditioning Company in the United States in 1963
Madoff found this problem, he spent 250,000 US dollars to upgrade the computer equipment, through the computer system to complete the stock transaction, greatly improving the efficiency of the transaction, and he also proposed the "order rebate" so that people involved in stock trading can make more money, so his business continued to flow, and soon became a wall Street celebrity.
This money-making model is very stable, occasionally encounter the US stock market plunge, he can also make a small profit, for the average person, becoming a well-known trader on Wall Street may be satisfied, but Madoff is not just an ordinary person, he was the chairman of the NASDAQ for 3 years, the heart began to swell, feel that the money earned is not worthy of his fame, so he began to sword away, want to play a big one!
How can I get money fast? He thought about it.
Obviously, if you only earn the little commission of retail investors in the stock market, it is impossible to become rich, and if you want to become a world-famous person, you must make money from rich people, and you have to be the money of the world's top richest people.
But how do you get these billionaires to believe in themselves?
At this time, Madoff began to show his Jewish marketing talents, first he threw dinners on his yachts and invited a large number of celebrities to attend.
This is a very common method, but the cow is in the cow, he himself opened a dinner party but always does not show up, has always let his good friends to entertain guests, many people the first time did not see the master, there is a little annoyed, the second time to go and did not see the master, it is a little unconvinced, the third time to go, the result of the master has not yet appeared, at this time they have a strong interest in Madoff, they think, I would like to see how good this Nasdaq chairman really is?
When everyone's appetite was lifted, Madoff's friend stepped forward and told everyone in the scene, "I know Madoff, and I can help you get in touch with him." In this way, Madoff's body was shrouded in a mysterious atmosphere, even the forced grid was raised a lot, under the word of mouth of high society, and before long, Madoff, the chairman of nasdaq, became a "person you don't want to meet"!
This is not the end, after hanging everyone's appetite, you still have to give those rich people a chance to find you, otherwise you will simply become a mysterious person. So Madoff went to the famous "Palm Beach" in the United States to buy a villa. Why choose this place? Because palm beach has a very mysterious club, called Palm Beach Country Club, the name sounds very earthy, but the people inside are very cattle, in the 50s of the last century, the annual membership fee received 300,000 US dollars! What was the concept of $300,000 in the '50s? At that time, the Bretton Woods system had not yet collapsed, the dollar was directly bound to gold, 35 us dollars is equal to an ounce of gold, an ounce is 0.02835 kg, 300,000 US dollars is equivalent to 243 kg of gold, which translates to 91 million yuan to today. Therefore, those who can join this club are either rich or expensive.
Madoff held a lot of parties in Palm Beach and promised the rich people present that as long as you give me the money, I can give you a steady income of 1%-2% every month, no matter how difficult the economic situation, there will be a growth rate of 10% to 15% every year.
The rich people present were moved, because this is undoubtedly a very crazy promise, after all, even buffett, the god of stocks, does not dare to guarantee a stable annual return of 10% to 15%.
In order to facilitate everyone's understanding, I will list the yield of mainstream financial tools for you to compare.
The annual income of Yu'e Bao is about 2%; the income of bank fixed deposits for 1 year is about 1.75%, and the income of 5 years is 2.75%.
So, more than 1/3 of the richest people in this club decided to give the money to Madoff to take care of. At first, some people will be suspicious, but later found that everyone who joins can really get a dividend of 10%-15 per year, which makes people who are watching begin to be moved, a large number of people and institutions choose to join, including many well-known big institutions and big figures, such as the famous American director Spielberg, China's "working emperor" Tang Jun, BNP Paribas, Swiss Bank, Spanish International Bank, New York Met boss Wilburn, famous actor Kevin Bakken... In the end, according to the data, 37,000 people in 136 countries around the world were defrauded, and the amount involved was as high as 65 billion US dollars.
As for how Madoff managed to give 10%-15% profit every year?
In fact, it is a very simple "Ponzi scheme", which I explain to you in the easiest way to understand.
If you are Madoff, opened an investment company, a gave you a million to let you help invest, a year later, you gave a hundred thousand yuan of profits, and said to a, your 1 million principal if needed, you can give you at any time, a taste of sweetness, certainly will not take out the principal, and he will also pull relatives and friends to invest together, as the number of people joining is increasing, Madoff began to sell members, join the threshold of 1 million, do not ask me the direction of investment, do not ask me how to operate, do not ask me where the funds go, You can claim profits every year, if you ask too much, then direct refund does not take you to play.
Where does the profit distributed to members each year come from? It is very simple to say that the profit of the first year after a join is 100,000 yuan, b joins and then gives 1 million, and then takes out the money of b to 100,000 to a, as long as a steady stream of people join, you can always play like this, unlimited nesting dolls. Until one day no new people join, or encounter a financial crisis, everyone withdraws at the same time, and the game is over.
So, in December 2008, when the "subprime mortgage crisis" swept the world and a customer offered to withdraw $7 billion, Madoff knew his game was over.
In order not to implicate his relatives, Madoff called his two sons to his side one night, and he said to his son: "Son, in fact, dad will not invest at all, all this is a lie for more than 20 years..."
Madoff's two sons were deeply shocked, and then they reported their father and saved themselves. The whole of Wall Street was shocked, although it had experienced the financial crisis, but when people heard that the "god of investment" with Buffett was actually a liar, it was still impossible to calm down for a long time.
The rich who were deceived suffered, but the most miserable thing was the middle class, who gave their lives to Madoff, and lost everything overnight, and ended up living on the streets.
This incident also gives a wake-up call to all those who are eager to get rich overnight, there is no free dinner in the world, there is no business that makes no money in the world, in my experience, if someone tells you that there is a financial means that can guarantee that you have more than 5% of the annual income, you must carefully consider, because high returns will coexist with high risks, and it is absolutely impossible to make a lot of money in a business that can make a lot of money.