Nothing much to do with Pyramids, more related to Chain Letters

Also see Get Rich Schemes

Pyramid Schemes
What they are, how they work, and how to beware of them! The whole thing explained...

You might sooner or later receive a message offering you a business opportunity which is a Pyramid Scheme. You will be offered the chance of making a huge amount of money, and the method is detailed in an explanation. If you think about it a bit, it may seem plausible. Plus, there are ways of making a fortune, but there is a problem with pyramid schemes and I will explain why, after I've explained what a pyramid scheme is.

WHAT IS A PYRAMID SCHEME?

You have to pay a small sum to someone first. This is sometimes connected with a deal involving signing up with some kind of money e-mailing company or sometimes it's a matter of sending cash. You pay the money to Person1 on the list. The list has three (or more) people on it, and then you move everyone along the list by one, put your own name on the list, and wait for the money to come rolling in. The letter will tell you that this is a sure way for everyone to make a fortune, and the explanation seems convincing. After all, if you have been convinced by it and sent the money, others will, so sooner or later an increasingly large number of people will be paying YOU money. So, brilliant, eh?

WHAT'S WRONG WITH PYRAMID SCHEMES?

Well, let's not knock an idea just because it promises to make a fortune. That would be ignorant, as there ARE ways to make a fortune, some of which have not been discovered. It pays to not be too sceptical! Also, with pyramid schemes, SOME people WILL make a fortune. So, what's wrong with pyramid schemes and why should you avoid them? The problem is the mathematics, which can be explained logically and the problem exposed. You don't need Advanced Level Exam mathematics to see this, but O-level helps. Part of the trouble is that the purveyors of pyramid schemes will try to distract you from the mathematical fault. Here, as clearly as can be explained, is the fault: For every person in the scheme who makes money, a preset number (n) will have to pay out money. For any level of the scheme, an ever-increasing next-level will be required. So, even though YOU might make money, sooner or later a lot of people will be sold a deal which will LOSE MONEY. So, you might make money, but others will lose. The problem is that it is very likely that this over-the-hill point has already occurred, so YOU will LOSE MONEY! If this sounds too complex to understand, a simpler explanation is this: As no money is being actually generated and it's just being moved about, there is no real money to be made, at least not long term, by everyone.

So, to sum it up, although a few people may get rich, the chances are it won't be you. Furthermore, whether you make money or not, a very large number of other people will lose money. It's a mathematical fact about the system.

The reason why pyramid schemes fool a lot of people into paying money into them is because, like the Impossible Triangle, it looks convincing from any angle. Most people aren't clever enough to suss out the whole picture and see the fundamental fault in it.

Pyramids schemes are illegal in some countries and not in some other countries, but it's largely irrelevant. People should be educated about the hazards and should not need to be protected by law against folly.

Pyramid schemes are sometimes disguised as MLM / Multi-Level Marketing, and often appear in the background as a sales method for a real product. So, when the whole thing collapses you may end up with a load of soap or some reports or some such thing; well it's better than nothing. However, for any scheme, you should check how much of it is about a real product and how much of it is just blather.

Also, when considering any testimonials, it's worth noting that these are likely to be TRUE. People really DO make money out of pyramid schemes. However, the same is true of gambling, there will be some winners who will have made a fortune on the gambling and be able to speak well of a MIRACLE, and yet you know that a lot of people will have lost and not said anything.

The fact is though, that you are extremely unlikely to make any money out of a pyramid scheme. The people who generally win are those who start the pyramid scheme in the first place. This is best avoided too, for various reasons!

Anyway, here is an e-mail which is typical of a multi-level-marketing approach, and is presented here without prejudice, for information only, and shall not be construed in any way to be anything whatsoever etc etc...

(personal info has been edited out just in case the addresses were genuine)