When the largest financial fraud in U.S history blown up in 2008, people didn’t imagine that the legend of investment Bernie Madoff could be the actor. Only one man called Harry Marcopolos said: « ahah! I told you guys. I knew it was a Ponzi Scheme, but you didn’t believe me. »
However, that was very obvious. Bernie was offering 10 to 20% yearly income if you invest in his fund. That means, if you call your banker and ask him to move 10 million dollars from your account to Madoff’s account… With an abracadabra, a million of dollars will be added to your fortune at the end of the year. That was too good to be true, but people kept believing in Madoff’s magic.
And the funny thing is; it wasn’t only multimillionaires and billionaires who were investing with Madoff, but also reputed banks and big financial firms…
Well… To understand why people were falling in Madoff’s charm, we should go back to 1962, two years after Bernie Madoff started his small trading company.
This year, the stock market had a crash. All the people who invested on wall street lost their money, but not those who invested with Madoff. Because he bought all their shares with the money he harshly earned during 2 years, and gave back the money to his investors (only $200 left in his pocket after that).
Bernie promised his investors that their money is safe with him, and by doing that, he kept his promise and he became -in people’s eyes- the superhero who navigated the 1962 stock market without losing a dime.
Our friend Bernie invested all the money he made in 2 years to associate “trust” and “qualification” to his name, and after that, he was able to convince 4,800 clients to give him 64.8 billion dollars, and becoming the legend of robing…
When you want to start a new business, you may think to invest in the best material or in renting a local in the best place of the city, or maybe to invest in learning more about your new business. But what Madoff teaches us is:
Sometimes, you don’t have to rent a local in the best place of the city. If you have a good costumer experience, people will come even if your store is at the end of the world.
Sometimes, you don’t have to care about the money to buy the best material. If you keep your promises, your suppliers will give you what you need, because they’re sure you will pay later.
Sometimes, ignoring some fields in your business is okay. If you’re honest, karma will put you with honest people.
And good news, investing in your name with things like: good customer experience, keeping promises and being honest… is free
Now, if you want to start a new successful business or build the next biggest Ponzi Scheme, you know what you have to do.