Don't mess with the Ponz...

Charles Ponzi was a very creative businessman. His approach to business earned him millions, and allowed him to live like a king for years. Unfortunately, his creativity and success also earned him time in jail, and a penniless death in a charity hospital. His business model resembled a pyramid, where dividends are paid to early investors with the funds received from later investors. Hm. Sounds a LOT like our Social Security System.

I remember those pyramid investment schemes. By the 1970's, the collapse of Ponzi's pyramid was long forgotten, and people were once again investing in them like crazy. Although I knew many who were doing the investing, I never knew anyone who actually received any money. The schemes faded as quickly as they'd appeared, and someone walked off with a LOT of money. But even as recently as 2001 I was getting invitations to invest in one of these schemes - from my super-smart sister Barbara, of all people. She'd been talked into the scheme by her low-life, blood-sucking, good-for-nothing husband. And really, I'm being overly kind. This guy hadn't worked in years, and had his own little pyramid scheme going - luring financially independent women to marry him, care for his kids and pay his bills for a few years. Then pay him alimony.

But enough people are aware of the pitfalls of pyramid investing to avoid it like the plague. To fix this image problem, these schemes have gone upscale, and today its called "Network Marketing". Sounds like a term you might hear in a board room - like "Channel Sales" or "Integrated Vertical Marketing". Sounds like something you might associate with an Ivy-League MBA.

Nah... its just Tupperware.

Recently, my Doctor tried to turn me onto "Network Marketing". She actually wrote me a reminder, on her prescription pad, to go purchase a book called "Multiple Streams of Income". Its one of those "earn money at home part-time" deals. But from my doctor? Sensing my obvious lack of any marketable skills, she must have figured that this was her best shot at getting me into a position to pay my doctor's bills.

There are many "network Marketing" models out there. Avon, Amway, Mary Kay, Arbonne, PartyLite, Pampered Chef, to name a few. The whole thing is based on selling a product to friends and neighbors, then recruiting them into your "organization" to sell for you. You might be recruited as a salesperson (hound your friends to buy the product), or a party host (hound your friends to sell the product), or a marketer (just hound your friends). I really think that most people who do this actually believe they are providing a good product or service, and they have convinced themselves that their friends will all benefit from their efforts. Really. I think they rationalize that their friends actually need this product, and that they're going to buy it somewhere (candles, dish detergent, hand soap, perfume), so why not keep all that money circulating among friends? The problem is that most of these products are purchased using the "just in time" model. I don't know anyone who stockpiles perfume, or buys dish detergent from a catalog. So in order to sell it to your friends, you've gotta be at the right place, at the right time.

We used to have a neighbor who sold Avon. Sitting across the street and observing the way we spend money, she certainly knew that she'd found the right place. Finding the right time, however, was a little more difficult to figure out. So she decided the best way to get our money was to show up at our door EVERY DAY with a catalog. She was determined to be on the scene the next time we developed an urgent need for Derek Jeter's personal line of Eau de Toilette sprays. "Oh, thank goodness you're here! Quick, we have an urgent hygiene situation. Do you take third-party, out-of-state checks?"

Another network marketing model involves sex toys. Ok, now we're getting somewhere. Here is a product that could get interesting. It is, after all, tied to an activity typically associated with an urgent need. But being there at the right time? That might prove to be a bit awkward, especially with neighbors. "Oh, thank goodness you're here! As you can see, I certainly have an urgent need. Wait! WAIT! Come BACK!"

Recently, several of these networks have attempted to recruit my adult daughter to sell for them. She is unemployed - are you seeing a pattern here? Obviously, the only reliable way to avoid these recruiters is to have a real job. Lacking that, my daughter has been solicited to sell everything from perfume to cosmetics to candles. For just a small investment of time and/or money, she could be on a career path to financial independence. Visually, she is standing at a life intersection. Do I get my degree, or do I go sell cosmetics at little cocktail parties? Obviously, there's only one answer to that question, and I intend to make her go to college instead.

People should beware whenever they see promises of making $10,000 per month in your spare time. This breaks the golden rule of network marketing - to be successful, you must sell "part time", not "spare time". And what they mean by "part time" is that if you really, REALLY want to make $10,000 dollars per month, you will, in fact, have a little time to eat and go to the bathroom.

I don't know. To me, the whole thing seems designed to divest a person of all their friends. Unless, of course, you were indeed providing a product, or a service, that truly - and I mean TRULY - benefited your friends. For example, I'd consider a friend to be a real valuable pal if they'd show up at the right place, at the exactly the right time, with a cold amber ale and a hot dog with relish and whole-grain dijon style mustard on a perfectly toasted bun. mmm... SOLD!