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Sunday, August 4, 2013

Why are People Quick to Call it a Ponzi?

It's valid question I've had for quite some time. Why is it that outside of MLM, Network Marketing, Affiliate Marketing, Home Businesses... Etc.. People are too swift to call the businesses we all strenuously build, a Ponzi scheme? Let's start to understand what the term means. Here's a link from
Wikipedia on the definition.

http://en.m.wikipedia.org/wiki/Ponzi_scheme

This is the definition from that link:

"Operation that pays returns to its investors from their own money or the money paid by subsequent investorsGg, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going."

Here's another definition of a pyramid scheme, which is really the same thing. This definition comes from my home business Prosper With Integrity.

" Is This A Pyramid?
Not at all. A pyramid is associated with an
investment scheme, a company or a business.
We are a Products Company and our main
priority is the sale and use of these products.
We make sales, we sell products and product
packages and we do not have an ever-widening
base to the structure, which just keeps going and
going. A pyramid never allows anyone coming
in on the bottom to ever reach the top.
Everyone has the right to buy a product package
and their value is in the products themselves,
on the Compensation Plan that we have,
EVERYONE on the product sales team that
people put into place works together in a team
and receives the same product packages and
benefits. In a pyramid, only those at the top
profit while those at the bottom never reach the
top. In a pyramid, people can and have lost
their money."

So, if there are solid home businesses that have compensation plans that reward their members or affiliates very well, then why do people get the wrong ideas? There are solid businesses that have products and certainly give people reward, bonuses, and money equally. The new recruits have plenty of chances to advance or move up.

Is it ignorance or is it the bad impressions from bad companies that folded due to unethical business practices? Whatever the real reason may be, it's a genuine shame. If we use the two definitions I've already given, we can virtually call out a lot of corporate businesses a Ponzi scheme. In many corporate offices you'll find that the top people make a great deal more money than the people doing the medial work. In a lot of cases the employees are slighted due to politics or nepotism.

I'm also of the humble opinion that people will be quick to verbally target MLM type business a Ponzi scheme because they have been taught since childhood they must get an education, get a job, then work hard, long hours to move up. So, when a real home business is presented to them, they react in a skeptical behavior. It should not be forced for these skeptics. That will only reaffirm the ridiculous notion. Slowly, with patience, these close-minded people will see the ethics, and genuine care we have others.

My plan of action for us all, is to act with integrity, honesty or truthfulness. Be the best you, you can be. Even when others aren't watching. Be a person of character, a person of value. Be an example, so that we may gain more respect from the skeptics and doubters.

1910 police mugshot of Charles Ponzi, the namesake of the scheme





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