I recently got a letter that made me cringe.
There is a pyramid scheme running rampant through my hometown at this moment (called L.I.F.E. or Living Intentionally For Excellence). Even my own husband was roped into it! His friend called him and told him he had a ‘business opportunity” he wanted him to be a part of, but that he (my husband) would need to attend a meeting to become better acquainted with what the opportunity was. My husband, in one day, went from telling his friend that he would attend the meeting but wouldn’t be able to sign up for anything without discussing with me, to joining up and telling me my opinion didn’t matter! The people involved in this pyramid scheme told him, that he would encounter negative people with closed minds that would try to talk him out of this, so when I wasn’t on board, I was labeled a negative person with a closed mind! It wasn’t until he got his credit statement that showed his credit card maxed out…..and not a penny earned (although the guy who signed him promises to be retired after one year!) that he saw this scheme for what it really was. Now, even after hearing our story, my brother is falling for it!
I can’t believe these things are still around and people are still gobbling them up hook, line and sinker. Pyramid schemes date back to Joan Rivers’ first facelift. When a company or an individual recruits investors who then have to recruit other investors, this is usually a pyramid scheme. New recruits provide the funding, or so-called returns, given to the earlier investors/recruits pushing them up the pyramid.
The only way the pyramid scheme can generate returns is to bring in more suckers to feed the bottom tier. When the scheme loses steam, the pyramid collapses. Now this scheme seems to have added the additional dimension of putting credit into the mix. What a recipe for disaster! And if that’s not bad enough, it’s divisive as well.
If you’re approached with a “great deal” and a promise of “fabulous returns” or a “sure thing”, ask these questions before you swallow the hook:
Do you have a brochure? No paper should be a big tip-off.
What exactly am I buying? If you can’t touch it, you shouldn’t buy it.
Who is in charge? That’s the person you want to talk to.
What do I get back for the money I am investing? If the return sounds unbelievable, ask more questions.
Why do I have to recruit someone else? No other investment relies on recruitment.
How is this investment taxed? If it’s not taxed, it’s not an investment.
Why do you need access to my credit card? Don’t be a dope. No one should be able to charge stuff to your credit card that comes as a surprise to you!
How long can I think about this? The sooner you have to make a decision, the more time you should take to think about it.
The old adage is, “There’s a sucker born every minute” has been incorrectly attributed to P.T. Barnum. While the attribution may be incorrect, the sentiment is dead on.
People, there’s no magic to making money, no matter how many get-rich-quick schemes you see out there or how many testimonials there are to a new way to “make money easy and fast”. Having lotsnlotsa money takes hard work and careful management. If you’re looking for an easy way, you’re a sap. It’s only a matter of time before you get taken.