It seems the terms "ponzi" and "pyramid" are being tossed around every time someone "believes" that something may be a scam.
First, let me say that, most opportunities that exist today are legitimate and legal. However, there are some things that fall within the "scam" category. But, not every scam is a "pyramid" or "ponzi".
People often mistakenly refer to legitimate network marketing companies as pyramid schemes, because of the organizational shape.
If that's the case, then EVERY organization in EVERY industry, is a pyramid scheme. The company you work for, your local school district, your church, your government, all have "pyramid-shaped" organizational structures.
Pyramid and ponzi schemes each have specific characteristics that make them illegal. And, it has nothing to do with the "shape" of the organization. It has to do with how money is made and passed through the organization.
See, it's not the "shape". Heck, in can be trapezoid shaped and be perfectly legal. It has to do with the activity within the organization.
I'm not going to go into the specific terms and definitions of pyramid and ponzi schemes here.
You can get indepth information by visiting the websites of the FCC and SEC below. Your country may have different laws and regulations.
Since I live in the United States, these are the resources I go by.
FCC Definition of a Pyramid Scheme:
SEC Definition of a Ponzi Scheme:
Now, please remember, you must read and understand the complete definition to know what is determined as a pyramid or ponzi. Most people read just a portion and say "Aha! I knew it. ABC Company is a pyramid scheme!", because they are looking for justification for their accusations. Don't be like those people. Educate yourself, and learn what each term really means.
Getting back to what I was saying before, not every "scam" is a pyramid or ponzi. And, not everything that doesn't work out the way you planned is a scam.
So, the next time you want to scream "scam" at something, read through the following list before making any accusations:
1) Just because you don't make money from something, doesn't make it a scam.
2) Just because something has a pyramid shape, doesn't make it a scam.
3) Just because you don't understand how something works, doesn't make it a scam.
4) Just because you find a random negative post about a company via a Google search, doesn't make that company a scam. (Note: most people believe these posts, because they don't understand how search engines work.)
5) Just because a company is being accused of being a scam, pyramid or ponzi, doesn't necessarily make it so. That's what we have courts for.
6) Just because your Uncle Bob tried network marketing for 2 months, sat on his butt, and made no money, doesn't make it a scam. (And it certainly doesn't make him an authority on the subject.)
7) Just because a company is new, doesn't make it a scam.
8) Just because the opportunity uses a business model you're not familiar with, doesn't make it a scam.
9) Just because your upline reached $10,000 a month after 2 months and you've made nothing for an entire year, doesn't make it a scam.
Whatever opportunity you become involved with, it will take work. It's not a magic solution. It's not a lottery ticket. It's a real business. And the only way to have any success, is to treat this like a real business.
Kurt Tasche is a martial artist, Internet entrepreneur and motivational coach who writes articles and produces videos on the subjects of marketing and personal development. You can connect with him on his Facebook Page here.
Article Source: http://EzineArticles.com/expert/Kurt_A_Tasche/254929
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