The internet is awash with various money making opportunities. But the trick is to be able to distinguish between scams, playing and investments. It's not alwas as easy as it looks.
The internet marvelous source of information -- both bad and the good. It's also a gemstone of profitable possibilities for would-be and veteran shysters and scam artists. Apart from pornography, one of the most prevalent types of content one can find on the web is in the money making category. And I guess, like sex, money has general appeal!
The starting point in getting to grips with this the reality is to realise avarice plays a big part in human nature. Sorry to be so straight-forward, but it seems we're wired for it. You see this played out over and over -- whether it's men and women battling each other to grab the best outfits in a crazy sale, or crazy people queuing up to get financially fleeced in some hair-brained pyramid money game. The motivation is the same. Something for nothing -- or almost nothing. And that desire is supported by avarice.
If you can accept you may have a built-in predisposition to look for the simple route, to get hold of easy money -- and factor that into your decision making -- then you will be in a much better position to more rationally measure various money making opportunities.
There are two main universal scams continually becoming more common on the internet. One is the "advance fee" scam, and the other is the "Ponzi" or pyramid scheme. You are epitomised by the "Nigerian Letter" fraud -- which is essentially a promise of big bucks in return for processing fees to retrieve the money. This often involves receiving a contact asserting you have either inherited or won a lot of money, and that you need to open an ocean going bank account to retrieve it. The strategy is to stink you into the scenario to this extent that you become emotionally wedded to it. Then, when you are asked to put up a fee to make things happen, you are already connected and spend the your hard earned money without a whimper. HB09The marketers then disappear with your cash, never to make sure again.
The ponzi scam is known as after Charles Ponzi who came up with the novel idea of enticing investors with the promise of very big returns -- and paid them out of new investors' money. In the end, of course, the last investors lost their money, and the whole lot was exposed as a complete fraud. Some ponzi schemes are very primitive -- like the original archipelago letter. You'd think we might have increased above that one -- but it keeps on resurfacing. However, nearly all are now more sophisticated, often disguising themselves as an "investment" with unusually high returns.
During the last few years such ponzis have pointed their act, and now promote themselves with smart, professional looking websites -- possible wording and terminology and an enticing sales page. The primary hook, independent of the stated returns, is the affiliate fee -- if you recommend others. In this way, the modern ponzi can harness the viral marketing power of the internet with techniques impossible in the snail mail age.
Now I have nothing against people playing money games as a result (it's their money), provided they know the foundations of the game, and understand the risks. You see, I'm very much of the opinion that people should be allowed to do what they as with their own money. However, when you remove regulatory oversight, you have to take responsibility to your own decisions, and realise what you are getting into.
If you know the risks, then it’s like playing -- where it is clearly understood that there are winners and losers. However, it does appear that some people can't tell the difference between playing (in all its forms), a ponzi, and an investment. And this simple truth is often employed by the authorities as an justification to enact laws to protect people from themselves.
For example, it's imperative to distinguish between ponzi schemes and playing. And it really should not be hard. Playing involves taking a pole in a money game where there are clear rules and directives as to who becomes the winner. Luck is the usual arbiter in playing -- and this is managed in several ways. It could be Lotto, where numbers are drawn from a bat berrel; it could be a lottery where anyone has the lucky ticket number; or it could be horse racing or sports, where you place a bet on the results of the race -- where "form" and luck both play a part. The point is, in playing you know there will be winners and losers, and you know the means by which this will be determined. You have full disclosure
Not so with a pyramid or ponzi. If a ponzi is masked as an investment, then it's probably to offer high returns (to appeal to greed), and use affiliate fees to get individuals to spread the word. Now, the very revealing message is that everyone who joins up will make say 10%, 20% or even 100% per month on their money. However, the truth is only the early birds will catch the earthworm and walk away with the loot. Why? Because the funds to pay out the stated returns come from the new players, and eventually they come to an end.
The pertinent question is, do these new players know they are funding earlier "investors", and do they realise they could lose their shirt? Most likely not. If a money making scheme states that it is a "game", makes no guarantees, and freely claims that your money is paying those before you, then you know the foundations before entering and cannot cry over spilt milk if you lose your money. On the other hand, if money is taken using terms that indicates a legitimate investment is being offered -- which later happens to be a ponzi -- then clearly the participants have been defrauded because they just weren't told the truth facts.
In a situation like this, one should be able to pursue legal action to reclaim the lost funds -- because such money was taken under false pretences. However, such a retroactive course of action does not mean one shouldn't exercise realistic thinking before stepping into any form of investment -- even more so, if exceptional returns and affiliate bonuses are increasingly being paid.
So you have playing, which clearly shows the risks inherent in engaging; ponzi/money games, which usually don't, and are essentially deceptive offersm and finally you have real investments. Of course, putting your money into legitimate investments does not eliminate the risk of losing your money -- it's just that such a structure is not set up with the intention of defrauding you. When you invest your money you should demand full disclosure for the inherent risks of the task. However, no investment is 100% safe. Even government bonds depend finally on the state capacity to forever tax its citizens -- something I know wouldn't want to bet on.
To recap: the fundamental difference between a scam, playing and an investment -- is the "rules of the game" are known in advance, and you participate in the full familiarity with the risk you are taking. A ponzi scam by choice misleads, whereas playing and investing offer disclosure for the risks.
You cannot avoid risk of course -- it is part of life. You will not find a truly risk-free investment. Even money in the bank, in most countries, is deemed "unsecured" -- and therefore in danger, should the bank fall over. So accept risk as part of life and concentrate on weighing in the risk -- according to your own requirements and your psychological respond to such risks -- contrary to the perceived benefits you may receive. And remember, you alone are responsible for the decisions you make. Caveat Emptor! "Let the purchaser beware".
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