Ponzi's, Pyramids and other Scams

P.T. Barnum, the famous circus entrepreneur supposedly said that "there was a sucker born every minute". However, I believe P.T. was being somewhat generous in his statement because it appears as if there are several born every second. In any event, it seems as if the idea of quick cash turns many of us into completely irrational beings. It doesn't seem to matter how much we are told "if it sounds too good to be true, it probably is", many of us still fall prey to the quick buck hustlers and scam artists. I'm not trying to preach because I've been guilty of chasing the fast buck from time to time myself. Why is it that many of us throw caution to the wind when it comes to these money schemes?

Back in the early 1900's, a man named Charles Ponzi was working a plan that made him rich, infamous and later landed him in jail. What this enterprising young man was doing was promising fantastic rates of return to 'investors' willing to hand over their money to him. He made claims such as being able to double your money in 90 days. The high returns were supposed to come from exchanging international postal reply coupons or some such thing. Before Mr. Ponzi was brought to justice, about 40,000 people had gotten involved in this scam. The main reason these things collapse is because there really is no product or earnings from which to reap profits from. Still, it did prove to be very profitable for individuals who got into it early, but at the expense of people who got involved later in the game. These type of scams have been around forever in various forms, and new variations arise from time to time.

Speaking of doubling your money, just a few short years ago, 'Doublers' were all the rage on the Internet. So called advertising entities and other types sprung up promising that you could double your money by investing in advertising, email leads or some other type of generally useless product. The way most of them were setup was that you would join the 'matrix' and once you cycle through the matrix, you would receive double your money. Again, getting in early was the key. As more people joined, the matrix in time became so large that the cycling time became extremely long and people stopped investing money and the matrix stalled. Most of the people were left with lots of money sitting in a line that eventually collapsed. That's the thing about these types of programs; some people do make lots of money, but it's the few who originate the program and the ones who get in early.

Many of these programs or money games are really hybrids of Ponzi and Pyramid schemes. While many appear legitimate, the thing that sets most of them apart is that there really is no 'real' product, but what matters is that your success and ability to make any money is contingent on you recruiting other participants or suckers into the program. Eventually the numbers needed to make this type of program work become unsustainable because it's based on a multilevel structure where you have to recruit 'X' number of people through numerous levels and rely on others to do the same. In order to make the money advertised, you and everyone else would have to have about 6 million people in your network.

Unfortunately, all of these scams have given a legitimate form of business known as Multi Level Marketing, a bad rap that is hard to overcome. Having belonged to a couple of Network Marketing or MLM companies, I can't recall the number of times I have had prospects say to me, "that's not a Multi Level Marketing program, is it?," with a look as if they have just seen Lucifer incarnate. With all the scammers out there, it is sometimes difficult to tell the difference; just remember that legitimate MLM companies offer REAL products and the income you make with them isn't based solely on recruiting others into the business.

One thing you can say about scammers is that they are very flexible in that they have adapted to the technology of the Internet very well. I must receive 10-20 emails a day telling me that someone in some little place like Timbuktu wants to send me 7 million dollars or so if I just give them my bank account information. Between that and all the lotteries I'm winning, I shouldn't have to be spending hours each day staring at this computer screen trying to eke out a living. Hmm...

About the Author

Bill Thomas is actively engaged in E-Commerce and Internet Marketing. His current website is..Learn How to Generate Thousands of Dollars Monthly With..Secret Affiliate Marketing System ... Download Bill's Free Ebook on Building Traffic at...Free Traffic Secrets

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