May 11, 2014

Pyramid: Lose your Friends or Lose your Money?

People now a day are thinking of different ways to earn money. Some are engaged in business, others are looking for a job. Sometimes, legality is no longer a question as long as you are earning for a living. People tend to forget that providing goods and services should be for the betterment of the society; for common good and not for the benefit of the few.

There is a well-known business model called Pyramid that is prohibited by the law. This business model is an effective quick rich cash cow method which uses networking. People are enticed to join the network because of promising high return on investment. In turn, the newly recruited investor gets the privilege of using the company name and company dummy products to enticed newbie investors. The objective of pyramid is not really to sell goods and services but to sell (illegal) investment model.

Pyramid is illegal because you are earning at the expense of other people which is the contradiction of the principle of doing good business. When an investor puts his money on an investment, the person has the assumption that he will be able to grow his money and not to lose it. In a pyramid investment, you either earn a lot from your investment or you go home with empty pockets. This is because; the profitability in Pyramid Investment depends on the number of person being recruited in the network. The sustainability of a Pyramid organization depends on the number of person who will believe that they will be quickly rich because of the said investment method.

In fact, a lot of people became rich because of the Pyramid business model. Let say that the person was able to get investment from his close friends and relatives, surely the return on his investment will double. Yet, what if his friends and relatives were not able to get any single investor?

This goes with the saying that, in Pyramid business, you either lose your money or you lose your friends.

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