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GOODBYE FOREVER TO PASSIVE MLM, AKA "LEGAL PYRAMID SCHEMES." (Posted June 9, 1999.)

Money Masters, probably the best "passive MLM" operation that has ever existed, has now suddenly declared all of its obligations null and void. The manner in which they have done this should eliminate any idea that "pyramid schemes" can be a viable opportunity.

The reason given is that Money Masters "has been contacted by the attorney generals of two states (Michigan and Oregon) and ordered to cease and desist all operations." Money Masters then states summarily that: "...as we have corporate offices in at least one of those states, we have no choice but to comply with the law and cease all operations."

I am no lawyer, but it seems to me absurd that Money Masters can no longer function anywhere just because they are no longer legal in 2 states. Furthermore----although I can't say that it seems to have anything to do with anything----it seems to me a strange phrasing to say, "We have corporate offices in at least one of those two states." Why "at least?" You mean they don't know for sure where they have and do not have a corporate office? Very strange.

No matter what the real reason, this is no doubt the most brilliant and convenient method possible to shut down a pyramid scheme. An operation the size of Money Masters is certain to receive legal challenges. When the pyramid has run its course, all they need to do, then, is instruct their own defense lawyers to "go to bed early, and get up late."

Then all that remains is a brief message to all their true believers: "I am sorry, my children----sob,sob----it isn't our fault at all----sob, sob----we were doing very, very well----your check was ready to be mailed----but we have been delared illegal in two states----sob, sob----and so, my children, we regret to inform you that we must keep all of your money for ourselves..."

Money Masters expresses their boundless grief thus: "To say we are saddened and disappointed would, of course, be an understatement..." Fortunately, I had my Kleenex handy. The brief letter then closes with a shameless plug for their new "Sudden Impact Seminars." No mention of even a 10% discount toward these if you just lost $500 in Money Masters.

Money Masters was briefly listed by MoneyData as the "latest hit in legal pyramids." This listing was under the "caution sign" signifying, "Good for a few, a waste for most." One reason that Money Masters had the best chance to succeed was its product: seminars. Seminars are a popular product which it is normal to pay at least $500.00 to attend, and which cost little more than hot air to produce. Thus----although a sensible person can be excused for the opinion that "all seminars are humbug"----nonetheless, Money Masters was drawing in a large amount of hard capital based on a product sold at "market value." Compare this to other "pyramid schemes" where you ostensibly buy a prepaid calling card for $200.00, no different from what you can pick up at any Post Office for less than $20.00. In every case the product is "just an excuse to make it legal." Only in the case of Money Masters was this "excuse" actually at market value.

What can we now conclude about "passive MLM," aka "legal pyramid schemes?" We can conclude that if this is how you are treated with "the best," you can hardly expect anything worthwhile from any of them. The demise of Money Masters now paves the way for an "easy way out" for every pyramid scheme. Therefore, what was once "marginal" is now completely foolhardy. Consequently, no pure-blooded pyramid scheme, "legal" or otherwise, will ever again be featured on MoneyData.

One last word is needed to clarify the difference between "passive MLM," a "pyramid scheme" and a "chain letter." "Passive MLM" is the most outrageous because it claims that "everyone will make money." Whereas, with a normal pyramid scheme or chain letter, it is understood that those who successfully recruit a "downline" will be the winners, and everyone else will pay for it. In this they have a claim to reality.

Please note that none of this necessarily applies to Stockgeneration (http://maxpages.com/moneydata/VIRTUAL_STOCKS) parts of which can loosely be called a "pyramid scheme." The New York Stock Exchange and even human life can similarly be called a "pyramid scheme" because, in the present method of organization is the deceptive implication that "anyone who works hard will win" and that everything can keep expanding forever. There is a clear difference in the degree of deception, and in the possibility of continuity even after the inevitable "crash." Nonetheless, when you take an objective look at the way just about everything in this world is run, it becomes less and less astonishing that a few people are "gullible enough" to join a pyramid scheme. Before you condemn them outright, please ask yourself first to, "Look who's talking."

OVERVIEW OF PASSIVE MLM. (Posted April, 1999.)

High-powered hustlers are now using law firms and putting together successful schemes which operate on the principles of "chain letters" but are legal. For example: one such scheme is made "legal" by ostensibly selling its members "seminar tickets" to worthless seminars that do take place, and which many people do seem to enjoy, thus generating a certain degree of hard revenue. Of course it is not necessary to attend a single seminar in order to cash in! These schemes make money when they are new and popular, and then inevitably must go bust. If you understand this it is not difficult to make money. The difficulty is in catching the "latest gimmick" when it is still fresh. MoneyData is designed to help make this possible.

Problems with "legal chain letters."

1) They all say "This is legal" and "This is not a chain letter," but seldom is this true.

2) Rarely do they speak plain English or give any coherent explanation.

3) Always they evade the issue that "the gravy has to stop flowing sometime."

4) Even an expert could not find the time to wade through all the "money schemes" now available. Often an entire day is needed just to "decipher what is going on" in a single scheme. One answer is to join a "co-operative input" situation such as subscribing to the MoneyData e-mail newsletter. (http://maxpages.com/moneydata/NEWSLETTER)

Conclusion: Just like Blackjack and Poker, money schemes can and do produce an overall positive return if--unlike the average player--you know what you are doing. "Passive multi-level" does not require work, expertise, or a down line, but depends rather on the aggressiveness and "hot air, greed and hysteria" generating abilities of its founder. Thus the founder does the work, and can be seen as a gifted entertainer, for which he or she is of course grandly compensated. Passive multi-level also is rather egalitarian in that each member is randomly assigned to the equivalent of a down-line, and thus all down-lines are filled or not filled directly from the general pool of new members. Thus it is rather like buying a lottery ticket with the odds in your favor--so long as you choose wisely, at the right time, and do not over-buy. (CORRECTION: NO LONGER EVER WISE. PLEASE READ THE ABOVE ARTICLE, "GOODBYE FOREVER TO PASSIVE MLM.")

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