Ponzi

So, one of my friends is very interested in making money. He jumps at the chance and has a tendency to get involved in get-rich-quick schemes. You know how you can sometimes get a deal at the grocery store, like $6 off admission to a theme park? Well, he recently noticed a deal, and has been selling the free gift on eBay, and getting about a 1/3rd profit on his investment... plus, he now has hundreds of cans of Coke sitting around. So, I'll say that these deals can sometimes be good for people who have a little extra time. One day we're having lunch, and I ask him about his plans after college. "I'm gonna work a few years, then I'm gonna retire." Retire? After just a few years? I could not resist asking... turns out, he's in on this pyramid scheme...it's a little different from the old fahioned ones. In this one, the cashflow supposedly comes from the money that would be used for marketing for products the group members buy. Sounds simple enough, he even convinced me to give it a try. However, I'm afraid of being brainwashed into a cult: 2 other people had told me about this, and they used remarkably similar language: "Oh, we sell products every household needs: soap, energy drinks..." I can't remember the last time I needed an energy drink. Other than being brainwashed, my only concern is that the products can be found cheaper at Walmart or something. My friend tells me that they're at a substantial discount, so I'd just have to see. However, I am cautious of even getting near this organization, as it has all the warning signs of a pyramid scheme (and a cult): you pay into the system, you do all the advertising work by getting "referrals", they make you feel emotionally tied into it, by saying that "you own the business", they memorized a certain speel (the same language that I'd heard from 2 of the guys, the only two I actually talked to), and, last but not least, they convince you that every household needs energy drinks. One irresitible claim, however, is that the guy above my friend makes $300,000 a year in passive income, which is crazy. If I actually see some proof of this, I think I will give it a try. I won't spend any money unless it's the lowest price for the product and I actually need it. I'm not gonna let myself get too absorbed or spend too much time, either, and I won't risk screwing over my friends with this unless it's real!

Oh, and in case you're wondering: Ponzi had a pyramd scheme in 1920. He claimed to be able to double people's money in 90 days. People could not resist giving him some money, and he was able to pay back the initial crowd. As word-of-mouth spread about the validity of his claim, he got more and more customers, and he was able to pay people back with the ever increasing money paid into his system. However, the government had their eye on him, and soon enough, they audited him and found he was bankrupt. He managed to pay enough people back to have fans till the day he was deported, with several criminal charges from that and similar schemes, 7 years later.