I think my brother just joined a Ponzi scheme...

[thyme4change]

Social Security is a ponzi scheme.

[Frugal Nurse]

Jun 2, 2011 14:35:58 GMT -5 @sroo4 said:

Jun 2, 2011 14:12:10 GMT -5 midjd said:

Also wanted to add that the first red flag for me was that the second sentence out of my brother's mouth was "It's not a scam or a pyramid scheme or anything..." If you have to clarify it that early in the game, it probably is!

Isn't that the truth... I once went out with a guy on like 3 dates. Then the obsessive phone calls started. All my friends got a laugh out of the one voicemail he left that started... "I'm not a stalker... but I'm going to keep calling until you talk to me"...

Ummm... buddy got a dictionary handy?

Yikes!

This reminds me of working a the law office, we'd get calls from people stating :I'm calling from the mental hospital, but I'm NOT crazy. I'm being held here against my will." Yeah buddy, they typically throw normal people in the psych ward all the time for no reason.

[Frugal Nurse]

i feel bad for your brother, but he is young. Sometimes it is good to make small, stupid mistakes when you're young and have little to lose. Just try not to give him too much crap about it next time you see him!

[MN-Investor]

I have a friend who is a CPA and quite bright and should know better, but she's gotten suckered into a number of things. Typical - she ended up with a trunk full of Beanie Babies.

A number of years ago her DH was laid off from a job he had had for quite a few years. He was at loose ends, and they ended up attending a sales meeting from some MLM company. They signed up. I forgot what they sold, something like water purifiers and educational books for children. By the time they realized that this was not for them, they owned thousands of dollars of product. I don't know if was samples, or if they were required to buy product upfront and then sell it, I remember my dear friend comment about writing it off on her tax return.

So, find out if there are any other moneys your brother might have to pay out. Will he have to pay for samples to show customers? Are there other upfront costs he's not aware of?

[thyme4change]

I don't know if was samples, or if they were required to buy product upfront and then sell it, I remember my dear friend comment about writing it off on her tax return.

I would be shocked if they were free samples. Even more so if they wrote them off on the tax return.

I suspect that he will have to pay up-front for at least some product. They need to know that there is some margin in the sales guy before they pay out that $110 to the upsteam.

[thyme4change]

It looks like those nutracuetical drinks - for energy or weight loss or whatever. They are ranked mediocre by several websites, some pro's, some con's. I think the best way to make money is if you were a personal trainer and you could convince all your clients to buy product, and get some of your better clients with a group of active friends to sign on as your downline. That way you can continue to sell the product.

Does your brother hang out with a lot of people who work out, or do his friends drink a lot of those supplement drinks thinking they are magic? If not, he will probably have a hard time keeping up on the sales that will be required of him. If he lives with roommates, he might have some product slip away on him without him noticing. That will all be out of pocket.

[midjd]

Jun 2, 2011 15:18:59 GMT -5 MN-Investor said:

So, find out if there are any other moneys your brother might have to pay out. Will he have to pay for samples to show customers? Are there other upfront costs he's not aware of?

I'm sure there are... seems like the "consultant" is really the consumer in these types of companies. I'm sure he will be buying the product upfront and then trying to hawk it. We may all get sports drinks and vitamins for Xmas...

Does your brother hang out with a lot of people who work out, or do his friends drink a lot of those supplement drinks thinking they are magic? If not, he will probably have a hard time keeping up on the sales that will be required of him. If he lives with roommates, he might have some product slip away on him without him noticing. That will all be out of pocket.

All his friends are jocks, and he is an excellent salesperson... if anyone could make money at this, it's him. But I don't think anyone usually does (except those at the top). What I gleaned from that Pink Truth website was that you might "make" $100K a year, but you spend $120K. It's all in the Schedule C.

The good news is he has about $20 in his checking account, a job this summer making barely over minimum wage, a beat-to-shit 1992 Bonneville, and that's it - so if they're expecting him to be a solid revenue source they're in for a pretty big disappointment! .

[Mardi Gras Audrey]

A coworker tried to recruit a bunch of us to join his Amway/Quixstar? MLM. I went to a briefing where they pitched how great the company was, how convenient it was, how I would be saving money buying stuff from them (as opposed to Walmart, etc). It just didn't make sense and when I questioned the speaker on it, he seemed to get a little flustered. I pointed out that I don't want to buy toothpaste and toilet paper mail order for several reasons..1. I'm single so buying more than one tube at a time doesn't really work for me 2. I usually buy when I am out/almost out so waiting for the mail to bring me more would be a rough couple of days and 3. Wandering around Walmart people watching and checking out new products is enjoyable for me so I would not be "saving time" by not doing it. I also pointed out that most people I know don't think of going to the grocery/drug store as a fate worse than death so I don't think that angle would work on them. It was crazy...

[bean29]

thyme, do you have a link to the ratings you refer to?

I would be interested in seeing them.

Thanks.

[thyme4change]

www.dietspotlight.com/nussentials-review/

I'm having trouble finding the others I found before.

But midwestern - you might want to show this video to your brother.

www.viddler.com/explore/mnbvcxz11/videos/43/

I also grabbed this paragraph from someone - I liked the description:

In short, this business focuses on providing nutritional supplements and products related to health and wellness. I’m not a scientist, but the types of nutritional products offered by this company seem to be sound, but not groundbreaking. By that I mean that the products are not particularly unique or drastically beneficial, but they do seem to be somewhat helpful for a person’s overall health. I could not seem to figure out the exact cost of the products, but my guess is that many of them are fairly overpriced.

[midjd]

Thanks, Thyme!

[thyme4change]

The company's website said you should generate 25 - 50 leads PER DAY! Gulp! You might want to ask him just how many friends he has. Even if I talked to everyone I knew, I would run out of people before the week was up. Is he the type of guy that would approach neighbors and people in grocery stores and the guy walking his dog, and the guy at the weight machine next to him, and the lady that is digging through her purse for keys?

Frankly, I'd rather be a desk jockey than do that - even if I do make less money. {{shudder}}

[midjd]

Yeah, he is pretty gregarious and has never met a stranger, but I don't think ANYONE could keep up that level of cold-calling every day! Given his penchant for doing the least amount of work possible in order to get by, I don't foresee this lasting very long if he does join. He may find that his "real" job is less work

The next time we're together in person, I do plan on having a talk with him about the interrelationship between risk, reward, and time... hopefully I can get across the concept that there is no way to get rich "quick" without incurring tremendous risk (unless you're talking about the lottery (or an inheritance, but that's not an issue in our family ))

[skubikky]

midwesternjd:

I'd suggest scouring the "yenta" net for reviews and comments on this and perhaps share them with your brother or have your sister talk to him.

The thought of someone "preying" on a college kid is truly awful.

[thyme4change]

Well - it seems as if you can recruit 15 good people you have the opportunity to start making money. But all 15 of them have to be on-board and going.

[Opti]

This reminds me of working a the law office, we'd get calls from people stating :I'm calling from the mental hospital, but I'm NOT crazy. I'm being held here against my will." Yeah buddy, they typically throw normal people in the psych ward all the time for no reason.

Frugal, I know this is OT, but I felt the need to comment. Normal people do get put in psych wards all the time although admittedly not to the degree those who need to be there are. Not sure of the time, maybe the 80's but there was a big scam in various mental hospitals including 4 in NJ where people would get others committed to these institutions because of the big money of having them there. Some were basically kidnapped against their will. You add in spouses who know the rules and side effects that mimic mental illness and you get some people who shouldn't be there but can not get out on their own. Some food additives and medications have side effects that mimic mental illness but few psychiatrists I've met would even guess that was the issue let alone diagnose that there is no problem just stop taking X.

[NomoreDramaQ1015]

I think they prey on people they know will be easy targets. If you don't acknowledge them they generally pass you up, if you seem interested they know you are a potential target.

In general college students probably are a pretty wide pool to choose victims from, just like the elderly.

Her brother though has been given information from the OP about how this is a ponzi scheme and he STILL is choosing to go along with it, so at this point, IMO, he's not a victim, he's choosing to go with the explaination that tells him what he wants to hear: earn lots of money with little to no work involved.

I used to think that way with my brother "How dare someone X", but my brother is 21 years old now and has had plenty of people on the other side try to tell him the opposite and he will stand there and argue with you till you feel like beating your head into a brick wall.

Some people just don't get it. And those people are easy marks for ponzi schemes.

[2kids10horses]

One thing they don't tell you is that you will spend lots of money on promotional materials. Like tapes (or CDs) to hand out to prospects. Or mailers. Or a monthly fee to have an "Official Website" that's guaranteed to attract prospects! Yeah, right.

[NomoreDramaQ1015]

One thing they don't tell you is that you will spend lots of money on promotional materials

MK gets you by letting you purchase the starter kit for 50% of retail cost. Then your next shipment is 90% of retail cost and they expect to buy so much product a month.

My friend bought out her kit and got the hell out of dodge. She wasn't cut out for it and she said despite what they claimed at the party, god help you if you cross into another sale person's turf.

Duh, I could have told you that. I was with her at the party and nearly laughed out loud when they claimed all the sales ladies were friends and would not mind if you crossed over into their sales areas.

Uh, how do I make money if I am letting other chicks into my turf?

They really sold a bill of goods. I was the only one who didn't sign up for it. Drove the rep crazy when I said I had a job, could basically set my own hours (as long as I got 40 in), I hate pink and I already own a car. ;D