In this video tutorial, we explain all about pyramid schemes, their meaning, how they function, their characteristics, and how to spot them?
What is a Pyramid Scheme?
A Pyramid Scheme is a fraudulent system that involves recruiting an increasing number of investors and making money. Initially, a single promoter recruits an investor and makes him invest a certain amount. In order to make a profit the investor has to recruit more investors into the scheme where he will be paid a certain percentage from the new investment. And the cycle goes on to prepare the group of the initial promoter.
Advantages of pyramid schemes.
– Good returns
– Product marketing at a lower cost
– Easily can accumulate donations.
– Higher profit
– Team building
Disadvantages of pyramid scheme
– High risk of losing your money.
– Have many unidentified loopholes.
– No guarantee of long-term returns.
– Very unstable.
How to Spot a Pyramid Scheme?
– Higher time constrains
– Unrealistic high ROI
– Focus more on recruitment
– No proof of revenue generated
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For more details, you can refer to our article – https://www.wallstreetmojo.com/pyramid-scheme/
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