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If It’s Too Good…
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There is something about the prospect of quick and easy money that can put a glint in the eyes of even the most saintly person you know.

I was listening to Clark Howard on the radio the other day. Clark prides himself on giving good financial advice. A man called in with a money-making deal that had been promoted to him by his brother—one of those schemes where you get your money (supposedly) by recruiting other people to join the sales force and they recruit even others. (It’s called a Pyramid or Ponzi Scheme.) Most of these require a layout of money from the new recruit to “set them up in business.”

Admittedly, the topic caught my attention more readily because someone from my church recently tried recruiting me to a Pyramid Scheme where not only was I going to fulfill my dreams but I was going to help fulfill her dreams as well. She wanted to build a school in her homeland of Africa. It was like a missionary appeal to join her and her friends in this marketing plan. The sparkle in her eyes, the enthusiasm of the partners/fellow recruiters with her. It almost caught me up—were it not for the “red flags” popping up in my mind.

Red Flags

1—The focus was on recruiting other sales people, not on the product itself.
2—It required start-up money from the new recruit—money that was not refundable even though this scheme was selling a service, not a product.
3—It required attendance at weekly regional meetings. “Everyone is so happy and excited,” said my friend. “The meetings are so much fun and they even pray.” (Meetings are geared to the interests of the particular group. A group of religious, recruiting their friends and fellow church members, will be welcomed with hymns and prayers and “glory to God” talk. The leaders know how to work a crowd.)
4—It all sounded so good--too good. “Go to your neighbors, your family, your friends, your church. Everybody is going to be happy to sign up for the services you offer, and they are going to want to recruit their friends also.”

As the saying goes: “If it’s too good to be true, it’s not.” If someone offers a higher rate of return on your money if you invest with them, your best answer is, “no, thanks.” There are a fair number of people in jail right now or under trial for cheating their trusting customers out of millions of dollars. Look up “Ponzi Scheme” or “Pyramid Scheme” on the Internet.

If someone approaches you with an “offer you can’t refuse,” listen well but sign nothing, commit to nothing. Check it on the Internet first and see what others have to say about it.

“If it’s too good to be true—it’s probably not!”

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By Lois Pecce. Copyright © 2013 by GraceNotes. All rights reserved. Use of this material is subject to usage guidelines.

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