Greedy greedy...

It's very ironic:

When presented with a legitimate Network Marketing opportunity, one of the most common objections you get is "eee...it's a pyramid scam lar"

But...

When the same person comes across one...promising high returns without effort in a short amount of time? "but it's a fixed payout! and stable returns! don't need to recruit/stock-up!"

Then...

When it's finally over, they ask why'd they do it in the first place.

Remember people..greed breeds stupidity.

So be smart.
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With regards to such schemes...I was talking to a few of my friends and we agreed on one thing: if other people's gonna fall for it, it's always better to let their money fall into your hands.

Note the difference in attitude. It's about diverting the money to you...since it's got to be diverted elsewhere anyway. You can always do something good with that money.

This is purely for 1. those who wish to participate and 2. in schemes that have yet to mature.

Sunshine Empire - Newsflash

Guys..

Remember what I warned about Sunshine Empire?

It was announced on The Straits Times, 24/10/07, that it has been listed on the Monetary Authority of Singapore's (MAS) 'Warning' list for operating a potentially illegal pyramid.

I have been to the presentations.

I am in fact very impressed by their concept.

However a few things bug me, mainly:

* Essentially 'guaranteed' profits (you can give it many names.)

* Nothing wrong with an investment company, but paying out profits when the 'investments' are still incuring costs and have not even generated revenue?

* An over-priced callback service

* An understated emphasis on stocking up on 'callback service credits' to produce more profits.

* It's almost as if the callback service is just an excuse for people to put their money in. "We do have a product!"

Update, 29/01/08: - It seems like they have had quite a few products over the years. I've heard of them selling health products, and even shampoo. Fancy buying $10,000 worth of shampoo! Anyway, here's my point - it seems like their ultimate focus is to simply make money, evident in their changing of products. Nothing wrong with that, though it makes you a little uneasy isn't it?

* They recently increased their entry pricing and reduced their payouts. They say that this is to ensure longevity of the company. Which is hypocritical because:-
1. It goes against one of the basic principals of MLM, which is that everyone is given an 'equal chance' to reach the top. This act has essentially made it more difficult for newer distributors to join and grow.
2. It just proves the point that payout is made from continued recruitment of people.

* It looks and feels uncannily like a Ponzi Scheme

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That being said, I also know of a quote, which basically says that truth comes in 3 stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self evident.

So I concede: despite the MAS warning listing, it is still possible that it is in fact a revolutionary concept in doing business. It is also possible that it's similarities with previous pyramids have cast a light of doubt over it.

Then comes another sticking problem: if it is too good to be true, it probably is.

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update : 25/10/07

check the comments section for Sunshine Empire's point of view

What is a Pyramid/Ponzi Scheme?

There are, in fact, quite a few articles that differenciate legal MLMs from such money games.

I'll link one of them here:

http://www.marketwaveinc.com/articles/Pyramid.asp

I would also like to highlight one portion of another article, which is basically a case study:

"1991: Cooper is the National Director of Training for American Gold Eagle, a gold coin MLM, and one of the early pioneers of the binary compensation plan. AGE is eventually shut down for securities and pyramid violations (they claimed the Gold Eagle coins were a great "investment"). The pyramid label was due mainly to AGE reps buying product solely to acquire additional income positions in the compensation plan (the emphasis was on recruitment, not actual sales of the products - keep that in mind for later)."

Sounds familiar to some of you?

Here's the link:

http://www.marketwaveinc.com/articles/TTP.asp

With so many companies nowadays coming up with smarter ways to work around rules that instantly qualify them as an illegal operation, we, as potential business builders, must have due diligence in making sure thatour choices don't burn us in the future.

P.S. To those in Sunshine Empire, start thinking long term. Such companies have been around since the early 1900s and are generally called 'Ponzi Schemes'. So thread lightly, and carry a big gun (hehehe)

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Update 29/10/07

Here are some more links with regards to pyramids, ponzis and legal MLMs

http://www.sec.gov/answers/pyramid.htm
http://www.ftc.gov/bcp/conline/pubs/alerts/pyrdalrt.shtm
http://www.ftc.gov/bcp/conline/pubs/alerts/lotionalrt.shtm