A pyramid scheme is a fraud. This is the most common opinion, also in the world of finance. I can partially agree with it, as most of the fraudulent schemes disguised as investment projects and business startups are ordinary scams.
But there are also schemes designed to make money, they even became a separate investment industry (HYIP). Read on this overview and you will learn about pyramid schemes, how to identify a fraudulent scheme and how to make money on pyramid schemes or multi-level marketing campaigns.
What is a pyramid scheme? An obvious answer is a financial scheme where an old client recruits members and receives a reward. But it is not as obvious as it seems. Remarkably, many people think that a pyramid scheme is a common investment fraud and do not know about the HYIP industry, where one can make real money. Yes, it is difficult.
The word "pyramid" has become a household word; people use it for venture projects, bubbles, any project offering high returns to your investment, etc. People simply don’t understand how the project/startup’s income is generated and how such a scheme works, therefore they call the “pyramid” everything that lies beyond their understanding.
And while some foolishly give money to scammers, others, for fear, don’t invest their funds anywhere and do not let them work, while others squeeze profits from high-risk projects, making money on different types of business, including pyramids.
You will learn from this overview:
Important! I am not going to urge you to invest in various kinds of financial pyramids, and pyramid schemes are illegal in some countries. I am aiming at explaining what it is, how it works, and why you shouldn’t be afraid of what seems incomprehensible.
The review is for informational purposes only; the investor must be able to distinguish fraud from pyramids and high-risk (venture) projects, as well as be able to assess the risks and prospects of income. Continue reading on LiteFinance.