Scams and Pyramids? So what! make some money and run
To be able to determine whether MLM (or a specific MLM company) is or is not a pyramid, scam, Ponzi scheme, or chain letter, you will need to understand each of them. Only then can you differentiate between them. And in future newsletters, I will give you some very good background on each of these specifically.
Today, we're going to take a look these areas more broadly and look at being able to see some critical differences so let me tell a story first.
How Are They Different, How Are They Alike?
When my son was young I would point out a car and say the word “car.” He soon picked it up and would point to a car and say, “Car.” Then he pointed to a bus and said, “Car.” I said, “No, bus.” He didn’t believe me. Why? Because he had assumed that a bus “looked” like a car - therefore it was a car. Specifically, anything that moved on wheels was, in his mind, a car!
To solve this, I found a bus and a car that were parked side by side and pointed out those things that make them different from each other and those things that make them like each other. Only then could my son determine if what he was looking at was a car or a bus. If someone cannot see how things are different and how things are alike, they are dumb on that subject.
What I’ve just described is how the media (and many people) have confused the world about MLM and pyramids - because they can’t differentiate between them. They have lumped them into the same category, evidently thinking that anything that pays on multiple levels must be a pyramid. If that were true, franchising would be a pyramid.
What I’ve just described is how the media (and many people) have confused the world about MLM and pyramids - because they can’t differentiate between them. They have lumped them into the same category, evidently thinking that anything that pays on multiple levels must be a pyramid. If that were true, franchising would be a pyramid.
Let’s start with a couple of definitions, since many people do not really know correct definitions to these words.
Scheme
1. Someone’s plan for achieving something.
2. A secret or devious plan.
Scheme comes from Latin word schema, which means figure.
Therefore, a scheme can mean either a plan for something good or something devious.
Scam
A fraudulent scheme.
Fraudulent comes from the Latin word fraud, which means deceit.
Deceiving someone means to trick them.
FACT: There is no industry (including stocks, charities, legal, medical, religion, MLM and government) that does not have a history of fraudulent activities. The fraudulent activities of some people in an industry does NOT constitute a fraudulent industry.
In looking at scams, it is important to locate the actual source that is carrying out the scam; there is ALWAYS at least ONE person.
Source
One that causes, creates, or initiates; a maker. (May I remind you of the recent attack Herbalife suffered at the hands of one man bent on making his own personal profit with Herbalife stocks?)
If a person kills someone with a rock, don’t blame the rock! The rock isn’t the source and didn’t kill the person. A person with bad intention is the source and USED a rock to do damage.
If a scammer uses telemarketing to seduce its victims into a scam, don’t blame the telephone. The scammer (a person) is the source and USED a telephone to deploy his scam.
If a scammer (a person) uses MLM to deploy his scam, don’t blame MLM.
An industry can’t be a scam as it’s not capable of tricking people. People are the only ones capable of tricking people.
MLM is not the culprit in scams, pyramids, investment fraud, chain letters or Ponzi schemes. The culprit is the unethical activities of a person or a group of people.
The reason scams sometimes use MLM is because MLM is a powerful way to distribute anything. Just as a telephone or the Internet is a powerful way to reach people.
Pyramid Schemes & Scams- Part Two
Last week we left off with a discussion about identifying the source of something. This article picks up from that point. If you need a quick refresher on this topic you can immediately view last week's article here:
Confusion and Perspective - how these concepts have been twisted
Bear with me a moment as I define both words:
Confused
1. Being unable to think with clarity or act with understanding and intelligence.
2. Lacking logical order or sense.
The government and the media have done a fantastic job of confusing people on the subject of pyramids and their association to MLM. The government (FTC - Federal Trade Commission) has publicly sued companies for running an illegal pyramid scheme and announced it to media; then the media has announced it to the public with very accusative statements like, “(Name of company) is an illegal pyramid scheme - ACTION IMMINENT!”
Then, after researching the company, the government drops the case because of no wrongdoing. But the media doesn’t announce this - therefore the public continues to think that a particular company is a pyramid scheme when it’s not. Pretty soon people just generally think that all MLM companies are pyramids when they are not.
This is the primary reason for the “controversy” around MLM. The controversy comes from people being confused on what is a legal and ethical MLM business and what is a pyramid. I will remove the confusion below.
Perspective
----The ability to perceive things in their actual comparative importance.
How “fraudulent” is one industry compared to another industry? To try and calculate this you’d have to ask the question, “What is the damage done by the fraud?” In the case of pyramids it would be loss of money. So in order to quantify how fraudulent one industry is, you’d have to compare it to another or other industries where people lose money. A news reporter can claim, “People have lost millions of dollars in these pyramid schemes.” Is
that a lot? Compared to what?
NOTE: I am not discussing MLM here, I’m discussing illegal pyramids.
In the US during the 2000’s, I was able to find:
TC vs. BigSmart - $5 million
Gifting Clubs - $16 million
Professional Resource Systems - $13 million
FTC vs. Skybiz - $20 million
That totals about $54 million.
Is that bad? If so, how bad? Let’s compare it to some other “losses.”
The largest financial losses to mankind in the 21st century (and throughout history) have been in the US stock market.
The stock market lost 9 TRILLION dollars of people’s money (January 2001 to October 2002)!
Seattle Times reported that, “According to Census Bureau statistics, the number of older Americans in the workforce grew by as much as 50 percent between 1980 and 2002. These older workers are seeking career changes, such as opening small businesses, and others are returning to work after huge stock market losses reduced their retirement funds.”
Even though the losses are well known and documented, the government continues to let the stock exchanges do business. If the FTC’s stated purpose is to protect people against deceptive business practices that cause financial loss of their money, why, oh, why would they be focused on pyramids when the stock market in ONE DAY lost $663 billion dollars (October 27, 1997) of Mom and Pops’ life savings? How can that business be allowed to stay in operation? I do not have an axe to grind with the stock market. I’m bringing this up as an example of perspective. Intelligent people can and DO put things in perspective by comparing them.
When you compare the losses in the stock market, lotteries, and gambling to the losses caused by pyramids, it is clear that pyramids do not cause nearly the amount of damage as other industries. In 2003, the average household in the U.S. spent $372 on state lottery tickets - that’s 42 billion dollars in losses (not counting the handful that won). Americans “legally” gambled more than 1.1 trillion dollars (2006). Put a trillion into perspective.
I am by no means advocating or defending pyramids!
I want all scams and unethical business practices stopped. Period. (Author: Not me mate)
One of the main reasons for this newsletter series is to educate people about how to tell the difference between MLM and pyramids so they never get involved in a pyramid or an MLM that is doing business in an illegal or unethical way.
My comments above merely suggest that if people (government, media, anti-MLM people) are going to scream fraud, then they should put the fraud into proper perspective of what’s causing the most financial damage. To do otherwise clearly demonstrates stupidity on the subject, or personal bias.
At some point in every presentation you will be asked, "Yah, but isn't that a pyramid?" (or some version of that).
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(All the above was nicked/pinched from the Internet and if the person who did that wishes me to remove it I will gladly do so, what's the point of me repeating what has already been said and If I knew where it actually came from I would give it a credit)
Further to scams or ponzi's I have found over the years that thousands have made money on them and I also know so many miss the boat in even making 1 cent let alone $100 a month in anything.
So I have started a ponzi skype room where we join ponzi schemes and go full blast into making money. We do have our legal and proper network marketing biz and thats all good but for quick buck money and lots of it, ponzi's here we come. Contact me on skype gerald.longman or facebook https://www.facebook.com/gerald.ballantyne if your interested and join the ponzi group. Or stay broke, that's up to you.
PS Your government and everyone in them is doing something illegal and you can bet money is involved in some way. And you want to save the world and be a martyr? not me, I am going for the money.
