The Many Faces of Get-Rich-Quick Schemes
Updated: 2021-08-16T04:05:13Z

 

You've been thought since childhood that wealth requires hard work, skills, patience, and time.

 

The Many Faces of Get-Rich-Quick Schemes
"colorful-shopping-business-money" by Angie Reyes is licensed under CC0

 

However, because of technology giving you access to information instantly, you've been slowly conditioned that wealth or getting rich must also come in an instant. This is the reason why we tend to fall into scams.

 

 

The Different Kinds of How to "Get Rich Quick" Schemes

 

 

Ponzi Scheme

 

How it works: Early investors are paid by getting the money from the new investors.

 

Example: Michael will be paid by getting money from Jordan.

 

 

Pyramid Scheme

 

This is sometimes referred to as Ponzi scheme but Pyramid works with slight difference.

 

How it works: Pay early investors if they can recruit new investors. This is the difference between the two. The pure Ponzi framework doesn't involve proactively recruiting, unlike pyramid.

 

Example: Michael will be paid if he can convince Jordan to join the scheme. If Jordan can recruit Lebron, Both Jordan and Michael will get a commission.

 

 

Pump and Dump Scheme

 

This usually happens in the stock market and cryptocurrency arena.

 

How it works: Insiders will release rumors that a hot stock or cryptocurrency will be flying to the moon. Insiders will then buy to pump the price. Retail investors will then go along with the hype/bandwagon, increasing the price more. Then the insiders will do a mass selling (dump), driving the price down, leaving investors at a loss.

 

 

Coaching Scheme

 

Not all teachers are the same. Only a few are legitimate and are out there to help. Bo Sanchez, my mentor (via his talks and books), is one of them. Unfortunately, there are some so-called gurus out there that are not practicing what they teach.

 

How it works: They bait you to attend courses (with a fee) that teach you knowledge and skills, promising you wealth beyond your wildest dreams.

 

 However, such programs don't work. And you will be baited again to attend an "advance" course, with a much higher fee. 

 

 

Multilevel Marketing (MLM)

 

The pure MLM framework is not a scheme per se.

 

How it works: Early members sell products to customers and will also (if they want to) recruit their customers (potential new members) to join and also be a seller.

 

MLM sadly has a bad rap because it is viewed as either a Ponzi or Pyramid scheme. But in reality, this is the most legitimate one (in terms of business) because the money comes from outside customers who bought the product and not from its members.

 

 

Takeaway

 

We all want that dream to earn wealth as quickly as possible. We are now wired (because of technology) to expect things to happen at a snap of a finger. However, wealth accumulation is not like that. You will be experiencing many setbacks, failures as you journey your way to success.

 

 

 

Quote

 

"Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick."
Warren Buffettl
 
 
 
- Your Life In Perspective by ÆlfRæd (Elf Counsel)
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