Get-rich-quick scheme
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Get-rich-quick schemes promise high rates of return for a small investment. Most such schemes promise this high rate of return while at the same time promising that they are easy and risk-free.
Most get rich schemes also promise that little skill, effort, or time is required. They often assert that wealth can be obtained while also working at home. Legal and quasi legal get-rich-schemes are frequently advertised on infomercials and in magazines and newspapers. Ones that are illegal or scams are often advertised on the Internet through spam or through cold calling.
It is clearly easy to (potentially) get rich quickly if one is prepared to accept very high levels of risk -- this is the premise of the gambling industry. However, gambling offers the near-certainty of completely losing your original stake over the long term, even if it offers regular wins along the way. Economic theory states that risk-free opportunities for profit are not stable, because they will quickly be exploited by arbitrageurs. Nevertheless, many people long for wealth, and find these schemes highly desirable.
Aside from their impossibility, Theodore Roosevelt said, "The things that will destroy America are ... the love of soft living, and the get-rich-quick theory of life."
Legal get-rich-quick schemes
- Multi-level marketing is potentially highly profitable for those who first start the scheme. However, it is mathematically implausible that all the participants in a multi-level marketing scheme will all become rich from selling to one another. Usually, the lowest tiers of the scheme end up losing money.
- Work at home tasks such as stuffing envelopes or assembling trinkets. Essentially cottage work; only small fees are paid per piece, and to make real money vast quantities of work are required.
- Training courses, many get-rich-quick-schemes offer training courses in areas such as real estate, estate auctions, rare coins, or gemstones. Generally they promise that the trainees, after purchasing educational materials costing several thousands of dollars, will be able to locate cheap or discounted items that can then quickly be resold at great profits.
- Gambling software, get-rich-quick schemes often sell software programs for betting on horse racing or other forms of betting, promising that if run properly they will pick winners. They rarely do and most users lose money. This software normally sells for hundreds or even thousands of dollars.
- Selling "miracle products" over the Internet, telephone or to friends and neighbours.
- Many e-books are written about how to get rich quick by selling goods on eBay. The books are rich on irrelevant basic details, but are unlikely to give you advice on which products to sell in order to succeeed.
Illegal get-rich-quick schemes
- When there is no pretence at selling a product, multi-level marketing degenerates into a pyramid scheme or matrix scheme, which is illegal in most countries.
- Ponzi schemes are illegal in most countries.
- Insider trading is illegal in most countries.
- Advance fee fraud
- Credit card fraud
- In general, if it seems too good to be true, there is usually a catch. Many apparent get-rich-quick schemes are the work of confidence tricksters.
See also
- Forex scams
- make money fast
- Scam
- TANSTAAFL
- Matthew Lesko
- Robert G. Allen (real estate charlatan)
External links
- [Get Rich Quick Schemes - South Australian Office and Consumer and Business Affairs]
- [Washington Monthly - Money for Nothing]
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