A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!
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Author:  johnson1010 [ Wed Apr 27, 2011 9:34 pm ]
Post subject:  A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

Today, an actual Pyramid Scheme came right to my door… !!

How awesome is that!?

I think that people like me must be the worst type of people to try to induct into a pyramid scam.

I’ll lay it all out for you.

Here is the group that weaseled its way into my wife’s family, and sent a representative to our door with her poor old aunt in tow.

The presentation was about an hour long. We knew going into it, that it could only be something shady, and it became evident very early on that we were right. For 45 minutes, we had no idea what it was that they were trying to sell to us. Only that it involved self help, health, and building a team. Towards the middle, some mention was made of their extensive list of motivational and self-help lectures to be found on CD and book. (motivational packages to be sold at around 200 dollar a pop). It was only later that we discovered that the end product seemed to be the selling of “health drinks” or “energy drinks” (30 dollars a bottle… HA! Selling like hot-cakes, I’m sure.) which allegedly could cure almost any disease you could name.

Effectively, they were selling snake oil. Man, how I relish that this actually went down in my house…

But, here’s the beauty part. They went to great lengths to push down the notion that you would actually have to sell any of this health juice. What this was REALLY all about, and how you REALLY make money, was by building a team. You get more and more team members on board with you, then you get those team members to get more people on board
(reminding you of anything? /\ ) and everyone contributes to the team’s success. Just how they contribute was left to our imagination, as they made no effort at any point in this process to get us on board with actually selling the juice. It was all about how we could be on this team of go-getters who are somehow, somewhere generating money and success for eachother.

It got to the point that I had to stop them and ask what exactly was meant to be driving the income. Was it the juice? Was it the self-help materials? This was dismissed with a quick admission that the health juice was meant to drive sales, but “that’s not what we are concentrating on.”

We were just supposed to get on board with this exciting, Dynamic new team model ( I won’t get into the details, but it was a pyramid scheme, drawn in a strait line, rather than in that red alarm shape we all know means bad business).

She didn’t like us. We asked too many questions. We doubted the business model. We doubted the price point of the health juice. We cast suspicious eyes on the motivational packages. We asked for FDA verification of the health juice’s claims. We doubted how two tea spoons of some acai could equal 13 servings of fruit.

The whole time I was sitting there, one word kept rolling in my head. Scam. Scam. Scam.

I held my peace, for the most part. Restraining my urge to shit on the whole thing from ten feet up, instead just asking those needling questions that earned me red-faced insistence that the team would indeed generate money, and that nobody would be asked to sell juice…

Haha… wow.

I can’t believe I have to explain things like this to people. Don’t join a pyramid scheme.

Author:  Dexter [ Wed Apr 27, 2011 9:59 pm ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

Did you listen to the whole thing just out of curiosity?

I assume you would have to pay something to be on the team?

Author:  johnson1010 [ Wed Apr 27, 2011 10:16 pm ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

My wife's great aunt was there as part of the thing. We were still working out how to break it to her that she was part of a pyramid scheme without causing some kind of screaming match with her... sponsor, or whatever.

That would have just meant that there would be a whole car ride and whatever else where the sponsor could just drill her on "team spirit".

We are working to get her out before she drops her retirement on them.

Author:  patrickt [ Thu Apr 28, 2011 7:57 am ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

That was a multi-level marketing scam. That's different from a Ponzi Scheme. In a Ponzi Scheme you are promised amazing returns on an investment. The early "investors" and the well-known, well-placed investors who can bring in more suckers also get wonderful returns on their "investment". But these amazing returns are paid by money invested by new investors. Frequently, the crook will pay investors a premium if they bring in new investors. The base grows large and large, as does the top, of the pyramid and at some point the crook is supposed to skip town with the money safely in off-shore banks. We had one of these guys work our town and he had two private jets he was using to ferry money to the Bahamas, with his secretary. Social Security is another Ponzi Scheme but it's the only one in the U.S. that legal. It has the same flaw that all Ponzi Schemes share so it will fail, too. All other Ponzi Schemes are illegal and a lawyer will get wealthy trying to recover the stolen money from wherever it's hidden.

Multi-level marketing is different. There is actually a product you buy and then sell. Some people who really hustle can actually make money. Most don't. You are also encourage to enlist knew people in the program and when you've enlisted enough you move up a notch and you make money on the product your subordinates sell. And, you can keep moving up. That's the multi-level part. Multi-level marketing is not illegal although you can engage in practices that are illegal. The major flaw is that it is amazing how quickly a community is saturated with "salesmen" for the product.

One benefit of doing this has been to cut your taxes. A neighbor got involved with Amway. He was claiming a good portion of his home as office and deducting accordingly. His cocker spaniel was a guard dog for his business and he got deducted, too. The magnetic stick-on signs for his car made it tax deductible. He peeled the signs off when he had a date. Anyway, it worked great until the IRS noticed and then it became an almost automatic audit.

The one real benefit was that you learned who your real friends were. My neighbor quickly found that I was the only neighbor who didn't run and hide when he went for a walk.

Do what you want but I avoid both Ponzi schemes and Multi-level marketing.

Author:  johnson1010 [ Thu Apr 28, 2011 8:59 am ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

I appreciate the clarification on Ponzi schemes.

I never took the time to investigate the specific traits of the two... I never thought one would show up at my door!

Oh, man. Still getting a good laugh out of this.

Author:  patrickt [ Thu Apr 28, 2011 9:29 am ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

I should have mentioned I was a cop for thirty years and got involved with Ponzi Schemes.

Author:  johnson1010 [ Thu Apr 28, 2011 10:10 am ]
Post subject:  Re: A pyramid scheme... RIGHT TO MY FRONT DOOR! YAY!

Good man!

Thanks for helping to save little old ladies from these spineless, scavenging, worm-people.

I thought about being a cop early on, but decided against it.
I feel like i would be compelled to beat on people for being so damned stupid.

a 40 minute freeway chase, endangering dozens of lives and hundreds of thousands of dollars because you stole someone's car for a joy-ride?.... i feel like there's a beating coming your way.

Best i leave that job to others.

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