UPDATE: Wednesday, 08-Mar-2006 1:31 PM

From time to time I am amazed at what people pitch for network marketing programs. Then there are the various "other" types of programs that claim not to be a network marketing programs, but are basically ponzi schemes when it comes down to it.

If you are wondering what a "ponzi scheme" is and where to get more information, check out this excellent explanation at Wikipedia:
http://en.wikipedia.org/wiki/Ponzi_Scheme >>

While the above resources and definitions page is excellent for ponzi schemes, there is another page that addresses "pyramid schemes" and that is found here:
http://en.wikipedia.org/wiki/Pyramid_scheme >>

What has bothered me for 20 years is that mathematically neither can exist, but the largest ponzi scheme in the United States is sanctioned by the Government since I think 1933. Most people call it the Social Security Fund. I have been a participant in it for more than half my life, but I don't expect any return from it. I just get an annual statement.

Anyway, when the the social security fund was setup, for every one person receiving benefits, there were about 30 people working. However, now that ratio is down to around 2 or 1 --there are two people working for every person getting a benefit. There's more bad news. In order to pay much of the federal debt, the US Government has kept borrowing from the Social Security Fund, and what was paid by my parents and myself into it, may not be there in real cash. It is there in promissory notes by the Fed.

The other type of scheme that I will not get into is the lottery, and once again the state governments are using it to pay various programs, but at a very heavy price, because it almost always hurts the people who can least afford it.

Now on to why I brought much of this into the discussion in the first place. The reason is that there are scheme after scheme that are put together by rather smart people with one objective in mind: To aide the parting of your money from your wallet to their coffers.

One of the programs that I have been hearing a lot about lately is one that say "Earn or Make $500.00 a day". So, a while back I followed a link and filled in the form and got the program information. Indeed the recruiting was "slick" and done well for a product selling at $597. It was an "information package" that would help everyone "get thru the clutter" and make tens of thousands per month. So, here is a product that paid about 85% of it's sales price out in commissions and then turned around and asked the buyer to do the same as the seller --sell more of the product.

Humm, when you take a look at the above pages, you can easily define such a product and company. The problem once again is that the first few dozens or even hundreds will make some money. Some will make a lot, but in the end a lot will lose their shirts in the money buying the product and then a lot more advertising the product.

And in the entire test of the situation I don't think anyone asked this questions: Can I participate and earn from your company *without* buying the product?

IF the answer is YES, often once can assume that this is a legitimate network marketing program. IF the answer is NO I'd bet that it's a matter of time before an Attorney General of some state will send a cease and desist letter to the owner of the company.

Folks, I hate to tell this but 9 out of 10 income opportunity and investment opportunity programs on the Internet are either a ponzi or pyramid scheme. Sadly, such arrogant and blatant dismissal of the law makes everyone look bad and keeps a lot of people from discovering that there is a way to start out small, and build a very nice business.

I spent a lot of time pondering what to do -- Do I go the route of the $500 dollar per day income claim or do I take the time and effort to build a company that legitimately helps people learn and grow a business. In the end a very simple test resolved this issue, and I call it the dinner table conversation. The test goes like this:

1> Can I explain what I am doing at the computer to my oldest son?

2> Would I share with him what can be done with the product?

In the end, the answers to both of them were "yes" and I like to keep life simple.

Speaking of the main product that we are to debut this month --the world's first global discount card(TM), the Maxsimo Card(TM) I need to get to working on it. Yes, some people really like to work.

Carpe Diem, Sam out.

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