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View Full Version : Why do they call them "pyramid SCHEMES" ??



littleroundman
03-24-2012, 01:11 AM
HYIP ponzi players and MLMers try and confuse people with regard to what constitutes a pyramid SCHEME

They say things like "all companies are pyramids" and "our MLM isn't a pyramid because all the money doesn't flow to the top" or "everyone has a chance to earn"

THEY ARE TRYING TO MISLEAD YOU.

It's not about the pyramid SHAPE, it's not about the money, IT'S ABOUT THE NUMBERS OF PEOPLE REQUIRED TO SUSTAIN THE PYRAMID

Have a look at the numbers of people required to keep a pyramid SCHEME going:

Let's start off with a "you only need to recruit 6 others to become rich" pyramid SCHEME:

http://i218.photobucket.com/albums/cc153/thelittleroundman/pyramidscheme.jpg

There you go, only 13 layers deep and you need more people than exist on the planet.

How about we do a "10 people who get 10 people" example:

http://i218.photobucket.com/albums/cc153/thelittleroundman/pyramid.jpgthere you go, 1 turns into 100,000,000 in only 11 layers.

Only need 6 people in YOUR downline ??

What happens if all 6 of them get 6 people each:

http://i218.photobucket.com/albums/cc153/thelittleroundman/pyramid-scheme-2.gif

What does the SEC have to say about pyramid SCHEMES ??

http://i218.photobucket.com/albums/cc153/thelittleroundman/secpyramid.jpg

Here's a perfect example of how they try to trick you.

This is a HYIP ponzi pimp on Talkgold explaining how a potential victim could earn $6250 by only having to recruit 5 people:

http://i218.photobucket.com/albums/cc153/thelittleroundman/5x5.jpg

What he DOESN'T say is where the potential victim will be on the pyramid how many people would be required to sustain the pyramid before the victim can earn anything;

5 people who recruit 5 people who all recruit 5 people means you need 15,625 new "referrals" to make $6250" and that's IF you were at position number 1.

What happens if you're on the 5th level ???

How many "referrals" would be needed for everyone from level 5 down to make $6250 ??

If you joined at level 10, there would have to be 48,828,125 new "recruits" for you to be eligible to earn $6250.

Before you sign up for the next SCHEME, ask yourself, where am I on the pyramid, and how many people do I have to find AND enroll to make any money??

Lil Ol' Radical Me
03-24-2012, 10:11 AM
Thanks for posting this LRM.

It makes it very clear what the difference is between a company with a heirachy and a pyramid scheme. In the first, the number of people employed depend on the amount of money available to pay them. No money from sales, no new employees. In a pyramid style operation, people pay to play - with money and/or time and their earnings depend on how many unpaid people join after them.