Would you feel better if you lost money from a legal pyramid scheme or an illegal scheme? It is kind of a stupid question because it doesn’t matter you still lose money whether it is legal or not. I would not feel any better to lose two thousand dollars in a multilevel marketing or a Ponzi scheme.
The structures are completely the same. There is a person on top and many people supporting the top person by buying into a product or network. The only difference is the network marketing is suppose to have a product to sell and the pyramid doesn’t.
What are the odds to make money in either? I guess they are about the same because the structure is the same. The first thing I’d ask before getting into a business or investment is how do the people in this business or investment make money off of me.
In the case of a bank savings account it is easy to figure out. You deposit money the bank loans the money out at a higher interest rate then they give you. When you purchase annuities the penalty is figured on the commission of the salesman who sold you the policy. In multi-level marketing and pyramids the person who gets you to invest makes money if you join. The multi-level marketing says it is there to sell products, but the reality is most people in multi-level marketing companies don’t sell much and try and rely upon the people they recruit to increase their income.
The odds of someone joining an illegal pyramid to make any money is greater than joining a multi-level marketing company. The reason that pyramids are illegal is there comes a point in which there is no new people to join and no new money invested so the pyramid collapses and if you put in more money they you’ve made you now lost your money. All pyramids are guaranteed to have losers that is why they are illegal.