It starts when your brother-in-law, in his suave, reassuringly confident way, casually mentions a promising investment opportunity while at a family barbecue. As you stand there flipping burgers and rolling Ball Park Franks in your flip-flops and a man-apron that loudly proclaims 'King of the Grill' in ketchup red, he muses on his investments in real estate. High-end rentals, specifically. Penthouses, villas, beachfront condos—all with words like 'exotic' and 'luxury' in the listing titles. Nonchalant as he sips his microbrewed IPA, he throws a few numbers around. Big numbers. The kind that make an otherwise skeptical person envision paying off their mortgage a decade early and sending their kids to an Ivy League school. Maybe take the wife on a cruise down the Danube or upgrade that rusty sedan to something loud and fast.
The hooks are in, but the good salesman doesn't get too eager. He has to make this seem like he's let a secret slip. As though this exclusive club doesn't accept investments from just anyone. "Oh, I was just talking shop. Look at these kids. They grow up so fast!" But interest piqued, you pursue. Later, when the wine comes out and the kids are in bed, he pulls you aside for a more clandestine conversation about the details. Nothing too big. A couple grand gets you in at the ground level. That's barely a risk considering the earning potential, you think. Besides, you've known this guy forever. He's family. More importantly, he drives a Maserati and has a closet full of bespoke suits crafted of silk harvested from biologically superior Italian silkworms. The guy even smells rich—that exclusive bouquet of French cologne, boutique hair products, and professionally laundered undergarments.
You cut him a check that night.
The first of the returns arrive. And sweet, merciful Jesus H. Christ they're big. We're talking nineties Silicon Valley tech startup-level earnings. Enron board of directors golden parachute money.
The check clears. You're flush with cash. Fanciful images of Blohm+Voss yachts and gated communities surrounding exclusive golf courses begin to take clear shape in your mind. An appetizer this delicious can only mean an even more satisfying entrée, so you start rummaging beneath the couch cushions, scavenging for lost dimes to invest. Honey, dump the 401(k), the IRA, and the mutual funds. Penalties? Who cares! Hell, sell the furniture. We'll get better stuff with the next check. Something fancy-sounding like a divan or a credenza.
Your brother-in-law—now personal financial consultant and best buddy—pours it on, emailing listings of rental properties 'the firm' has just purchased. They're nicer than your home. So nice, you want to live there. With this influx of money, maybe you will soon. Confident and trusting now, you tell him to keep reinvesting your share. You get monthly paper statements you show your wife and want to carry in your wallet like a proud father carries photos of his kids. Of course, it would be selfish to keep such a boon to yourself. It's not a zero-sum game, after all. More carefully vetted investors, your besty assures you, means bigger returns for everyone.
So you start selling this plan like Girl Scout cookies—anywhere and everywhere. The gym, the office, hell, the dentist looks like a guy with some serious capital burning a hole in his lab coat. You become downright evangelical, singing praises and inviting others to share in your glorious salvation.
Then the day arrives when you're ready to withdraw. Cash out. Exchange your chips for that obnoxiously loud, fast car; for a stack of greenbacks certain to give you back problems from sitting lopsided on an engorged wallet.
But there's been a minor administrative error.
It'll take a few days to get that much cash around.
You wait.
Two weeks later, you've become concerned. You try calling your pal—two, three times a day—but he's out of town. Away on business. Voicemail doesn't say when he plans to be back. Then, one morning while shaving, staring at yourself in the mirror, it dawns on you in its full, ruthless glory.
You've been fucked.
The money you entrusted to your brother-in-law—instantly and forever no longer best buddy—played an instrumental role in what is colloquially known as a Ponzi scheme. The initial returns that had dazzled you so completely weren't returns at all, but the funds from other hapless investors making their way around the circuit. At some point, your money touched their hands, too. Just long enough for them to fondle it, to make it real. To make them believe like you did.
Because the profits were so good, of course you reinvested them. What kind of fool pockets his winnings and leaves the table at the beginning of a hot streak? Then you got comfortable. Careless. Satisfied with paper statements a child could have forged, you became a paper millionaire. Sure, it felt good, but the high was as brief and superficial as a twenty-dollar lap dance.
The vivid hues of your Technicolor dreams leach away. The images of Malibu mansions and fountains pumping gallons of Pol Roger vanish, replaced by visions of crowded trailer parks, cobweb-laced floral drapes, and peeling wood paneling. You feel cold. Gut seized by the sinking feeling of losing control. But mostly, you feel irredeemably stupid. You've been conned like a senior citizen new to the internet. And you've dragged everyone you know and love down with you.
You'll have to find a new dentist, now.
