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11/17/2013 5:40:06 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


I created this topic to see if people REALLY know what a pyramid scheme is, which is illegal! What exactly is illegal about it, is it the structure of a pyramid or what?

I ask this question because most people have a negative stigma towards network marketing/MLM or home based businesses that use a similar structure....but does that make them illegal or even unethical?

Since every year the number of people who are starting a network marketing business/home based business/MLM continues to grow at an accelerated rate, I wanted to see if people out there were really educated about an industry that has created more millionaires than ANY other industry in world, including, the stock market, real estate. sports, music and acting, yet still, get's bad press about how it's illegal or a scam.


I think if people really understood the industry and compared apples to apples, they will see that it's a legitimate industry that reward those that are the most productive, much like how car salesmen or real estate agents or any other sales professionals that get paid by commission. The top producers in those industries can earn an impressive 6 figure income and in some cases a 7 figure income, but we don't call those businesses scams.

So what is it about this lucrative industry that turns so many people off???

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1/22/2014 2:57:10 PM Does anyone know the difference between a pyramid scheme and MLM ???  
rhondamaze
Phoenix, AZ
54, joined Dec. 2013




1/28/2014 6:50:39 PM Does anyone know the difference between a pyramid scheme and MLM ???  

gamerman17
Over 4,000 Posts! (6,552)
New York, NY
30, joined Apr. 2010


Risky investment, perhaps to the financial markets. Sure the demand of this type of industry market is high due to it's profitability and liquidity of the company all of a sudden decides to go out of business, but if the expected risk and return within the market just isn't sustainable for them actually pursue going within that particular market, no investors would be interested and since they possibly provide resources of advertising and marketing that particular industry business, no one will ever know about or have doubts about it's longevity and efficiency within the financial market. I consider it a wonderful venue of business to earn a good, hard earned profit, but variables such as product, marketability, and consumers play a huge factor.....gamer

2/3/2014 6:45:37 AM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from nightthunder:
I work for Primerica Financial Services and I see people getting promoted and making so nice and huge money, so yes it's a MLM.People have to understand how business gets started.The secret to that was the people never gave up on their dreams and are not rich from it. Failure is only a minor set back ,but a path to success.




I appreciate your comment Nightthunder, But my question was do people outside of our industry really know the difference between a Pyramid scheme and MLM/network marketing businesses?

Do you know what the difference is my friend?

2/3/2014 7:20:08 AM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from gamerman17:
Risky investment, perhaps to the financial markets. Sure the demand of this type of industry market is high due to it's profitability and liquidity of the company all of a sudden decides to go out of business, but if the expected risk and return within the market just isn't sustainable for them actually pursue going within that particular market, no investors would be interested and since they possibly provide resources of advertising and marketing that particular industry business, no one will ever know about or have doubts about it's longevity and efficiency within the financial market. I consider it a wonderful venue of business to earn a good, hard earned profit, but variables such as product, marketability, and consumers play a huge factor.....gamer



Gamer, I am partial to some of what you said...specifically the last few lines. However, I don't agree that MLM's are risky investments because they are not investments, they are businesses that are inexpensive to start up with a very low overhead in comparison to traditional businesses. For instance, think of a pizza shop, dry cleaner or a Mc Donald's. Those are all tradition businesses, but to open one of those businesses would require A-1 business credit and some start up capital that could range into the millions for some. Those are huge investments that only 5% of the population can afford. Whereas MLM's are set up for the average person who has the entrepreneurial drive to start for a few hundreds of dollars or less and in most times, there overhead could be covered within the first month or so.

I think the main reason why people fail in these businesses is because they don't treat it like a business, they treat it like a hobby that if they don't see success fairly quickly, they tend to give up on it and label it as a scam because it only cost them a little bit of money. But would a person who put up a million dollars for their biz be so quick to throw in the towel??? I think not! So i believe the one of the biggest problem that people who join a MLM biz have is first Educating themselves about the industry and looking at the industry as a "Get Rich Quick Scheme" which in fact it is a business that requires work. And because people join these biz for the wrong reasons, they never see it through or take the time to "LEARN" their business!

Most people will get in...get excited...ask a few people to join them...get told know by a handful of people then quit before they even learn the FIRST and most important thing to know about this industry! and that is...THIS WILL NOT HAPPEN OVERNIGHT!!! But if you focus on becoming a professional and learning your business and commit to giving your business atleast 12 months, you WILL be successful!

Because I made a decision and committed to becoming a professional, I now earn a decent monthly residual income that is steadily growing, and I help/teach others how to do the same!

2/4/2014 4:43:19 PM Does anyone know the difference between a pyramid scheme and MLM ???  

gamerman17
Over 4,000 Posts! (6,552)
New York, NY
30, joined Apr. 2010


Quote from romellohot:
Gamer, I am partial to some of what you said...specifically the last few lines. However, I don't agree that MLM's are risky investments because they are not investments, they are businesses that are inexpensive to start up with a very low overhead in comparison to traditional businesses. For instance, think of a pizza shop, dry cleaner or a Mc Donald's. Those are all tradition businesses, but to open one of those businesses would require A-1 business credit and some start up capital that could range into the millions for some. Those are huge investments that only 5% of the population can afford. Whereas MLM's are set up for the average person who has the entrepreneurial drive to start for a few hundreds of dollars or less and in most times, there overhead could be covered within the first month or so.

I think the main reason why people fail in these businesses is because they don't treat it like a business, they treat it like a hobby that if they don't see success fairly quickly, they tend to give up on it and label it as a scam because it only cost them a little bit of money. But would a person who put up a million dollars for their biz be so quick to throw in the towel??? I think not! So i believe the one of the biggest problem that people who join a MLM biz have is first Educating themselves about the industry and looking at the industry as a "Get Rich Quick Scheme" which in fact it is a business that requires work. And because people join these biz for the wrong reasons, they never see it through or take the time to "LEARN" their business!

Most people will get in...get excited...ask a few people to join them...get told know by a handful of people then quit before they even learn the FIRST and most important thing to know about this industry! and that is...THIS WILL NOT HAPPEN OVERNIGHT!!! But if you focus on becoming a professional and learning your business and commit to giving your business atleast 12 months, you WILL be successful!

Because I made a decision and committed to becoming a professional, I now earn a decent monthly residual income that is steadily growing, and I help/teach others how to do the same!


Point noted. But within the corporate world, people WILL see opening a business as an investment in terms of profit and expect return. If those two variables aren't there, then investors are less like to put their assets within a business. I do agree that peole making this type of business isn't proactive enough for the business to succeed and perhaps I should have taken that into account during my last post. Best of luck if you are pursuing this type of business.....gamer

2/5/2014 8:29:52 AM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from amack305:
I agree. Folks become business owners believing they will be rich overnight. I have seen people come and go in my business. The money is here. Consistency is the key to it all. If they knew the history to companies like McDonald's and Starbucks, they would have staying power.



I agree 100% Amack! And what type of business are you in if you don't mind sharing?

2/5/2014 8:58:09 AM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from gamerman17:
Point noted. But within the corporate world, people WILL see opening a business as an investment in terms of profit and expect return. If those two variables aren't there, then investors are less like to put their assets within a business. I do agree that peole making this type of business isn't proactive enough for the business to succeed and perhaps I should have taken that into account during my last post. Best of luck if you are pursuing this type of business.....gamer




I agree Gamer! However, education is the key factor investment in terms of ROI's.

I also dabble in day trading, but I use an automated system that turns itself on in the morning, trades all day, then shuts itself off after market hours.


Thanks for the well wishes Gamer!

2/6/2014 5:50:15 AM Does anyone know the difference between a pyramid scheme and MLM ???  
rhondamaze
Phoenix, AZ
54, joined Dec. 2013


No, there is no difference. Scheme or scam? That's a difference.

2/6/2014 11:20:32 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from rhondamaze:
No, there is no difference. Scheme or scam? That's a difference.




Hey Rhonda...care to elaborate???

2/9/2014 11:29:22 AM Does anyone know the difference between a pyramid scheme and MLM ???  

justinstrick
Cabot, AR
33, joined Jul. 2013


Everything in life is structured like a pyramid, police department, military, schools, you 9-5 job. There is somebody above you that you don't make more than. A mlm is structured like a pyramid most the time but you yourself can be the top of your section of the pyramid and likewise people below ya can actually be higher up the pyramid than you but not over you.

2/9/2014 1:59:54 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from justinstrick:
Everything in life is structured like a pyramid, police department, military, schools, you 9-5 job. There is somebody above you that you don't make more than. A mlm is structured like a pyramid most the time but you yourself can be the top of your section of the pyramid and likewise people below ya can actually be higher up the pyramid than you but not over you.




I agree Justin, everything in life is structured as a pyramid! Even in the bible!

But my question was, "Does anyone know the difference between a pyramid scheme and MLM/Network marketing?

3/24/2014 8:43:07 PM Does anyone know the difference between a pyramid scheme and MLM ???  

dagobry
Urbana, IL
48, joined Mar. 2012


Ponzi structure only fails when the core operators get Greedy and the inflow of cash/funds doesnt keep up with original investors,an investors wants to pull some/all of funds and thats when the house of cards come down.Mlm,ponzi,regular Business all have some of the same core structures,and its fair to say every where you look someone is wanting that dollar you have,and some of us are looking to get rich quick,so ponzi,mlm are the same cause it feeds off of emotional people in one way or another,be good emotions or bad.There are companies that are mlm and have given people a leg up in life/Business(tuperware,avon,herbalife,)
Ponzi fails when i call you and ask for a withdraw and i have to call you back and you now give me an excuse the sexratary left out 1 digit of my bank routing number.cause your in the presidential suite at palms casino with 5 las vegas working girls doing an ounce of columbian cocaine lol..would make a great movie oh wait they did the wolf of wall street..

3/28/2014 5:16:42 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


You have an interesting take on this tipic. However, I wouldnt call a ponzi scheme which is illegal and doesnt offer tangible products the same as mlm which are legal and have tangible products/service.

I do agree that people join mlm out of emotion and think of it as a side hustle that can put some quick cash in their pocket but when they dont see the success right away, they tend to quit and call it a scam! However, if they would have treated it like the business that it is and.actually developed some business/marketing skills amd gave it time to actually grow....they would have siccess..Some people see others successes and are attracted to that lifestyle but they dont see the struggle behind the scene and the sacrifices that are being made in order to succeed. Like any other business, it wont grow over night! Most traditional business dont see a profit for a couple of years.....my buddy opened a bar/pub about 16 months ago and it is just now starting do well.....before...most nights they were closed by 8pm because only 1 or 2 people showed up that night to play pool....and he told me that business is doing much better....he'll probably making profits in another year or so.

So even though its doing well now, he understand that it will take time to reap the reward. Well the same thing with mlms....they take time to grow....perhaps less then a year for those who take it seriously and treat it like a real business not a hobby! But you dont have to geta $250K koan to be in business

4/9/2014 2:12:42 PM Does anyone know the difference between a pyramid scheme and MLM ???  
miss_cupocheer
Kalamazoo, MI
64, joined Mar. 2014


..."So what is it about this lucrative industry that turns so many people off???"...


ummmm ... The prison term? j/a

4/9/2014 4:26:31 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from miss_cupocheer:
..."So what is it about this lucrative industry that turns so many people off???"...


ummmm ... The prison term? j/a


I think what turns people off is the lack of professionalism that a lot people have when they first get started in this industry! People are so excited..they see the top money earners seem to effortlessly build a huge business but they pay very little attention to their struggles......

If people would treat this like the legitimate business that it is......There would be so many more happy campers!

5/21/2014 5:32:19 PM Does anyone know the difference between a pyramid scheme and MLM ???  

letsplay54143
Over 2,000 Posts (2,787)
Marinette, WI
69, joined Apr. 2009


To put it simply, MLMs give you a piece of the sales of everyone you recruit. There are real products and sales of those products involved. Pyramids have no product and meerly pay one investor with another investors money. I have seen it done with a circle to. As more people join the outer circle you move to an inner circle and then get paid. Still a pyramid scheme even if it is round.

5/24/2014 7:58:17 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from letsplay54143:
To put it simply, MLMs give you a piece of the sales of everyone you recruit. There are real products and sales of those products involved. Pyramids have no product and meerly pay one investor with another investors money. I have seen it done with a circle to. As more people join the outer circle you move to an inner circle and then get paid. Still a pyramid scheme even if it is round.




Absolutely! Well said! Pyramid schemes offer no tangible products or services. MLM's are companies that use word of mouth marketing to reach the consumers instead of paying for advertisements like traditional business. Traditional businesses will spend millions of dollars in ad campaigns...with MLMs, they use the millions of dollars to pay the affiliates to reach the consumers.

It's actually pretty cool if you think about it....The more you produce, the more you earn it's really that simple!

6/6/2014 7:30:33 PM Does anyone know the difference between a pyramid scheme and MLM ???  

istillimagin2
Germantown, WI
57, joined Apr. 2012


My thoughts on this one.: Pyramid Scheme no tangible product or service and or you can't move up, basically like at your 8-4 you can't become Supervisor because there is already a Supervisor, you have to wait till they move on whether it's to a new position, retire etc.
I shouldn't say an 8-4 is a Pyramid Scheme, it's just a Pyramid, period. Also you have to buy so much product, and try to sell it at a higher price to make a profit......
MLM or Network Marketing: You have a product or service to offer, tangible. Yes you get residual, commissions and over-rides. You do not get a commission for recruiting someone. And the new Associate can pass the Associate that brought them on board..... How crazy great is that? So MLM/ Network Marketing is NOT a Pyaramid by any means.....

6/6/2014 10:39:54 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from istillimagin2:
My thoughts on this one.: Pyramid Scheme no tangible product or service and or you can't move up, basically like at your 8-4 you can't become Supervisor because there is already a Supervisor, you have to wait till they move on whether it's to a new position, retire etc.
I shouldn't say an 8-4 is a Pyramid Scheme, it's just a Pyramid, period. Also you have to buy so much product, and try to sell it at a higher price to make a profit......
MLM or Network Marketing: You have a product or service to offer, tangible. Yes you get residual, commissions and over-rides. You do not get a commission for recruiting someone. And the new Associate can pass the Associate that brought them on board..... How crazy great is that? So MLM/ Network Marketing is NOT a Pyaramid by any means.....





I agree 100%!!!

6/24/2014 9:59:54 AM Does anyone know the difference between a pyramid scheme and MLM ???  
kerolina
Over 4,000 Posts! (4,158)
Pittsburgh, PA
32, joined Jan. 2013


Pyramids to get into you give money for nothing except to get in. It all goes to the guy on top. Once its full it splits and the 2nd level ppl move up and become top ppl of their own pyramid.
And more ppl pay. Well when it wears out the ppl that never made it to the top get screwed. And lose out.

I just recently got into network marketing. I signed up for a power company. Ppl switching electric.
It was 100% free to get in and do

Ive made good money so far. Been in about 3 weeks and have made about $600 so far.
Im 6 ppl away from making my next $1000.00.

So in about a month of work. Ive made about $1600.00. On the side. With not much work into it. And no start up fees or cost.

So i like network marketing!!!

6/24/2014 8:49:52 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from kerolina:
Pyramids to get into you give money for nothing except to get in. It all goes to the guy on top. Once its full it splits and the 2nd level ppl move up and become top ppl of their own pyramid.
And more ppl pay. Well when it wears out the ppl that never made it to the top get screwed. And lose out.

I just recently got into network marketing. I signed up for a power company. Ppl switching electric.
It was 100% free to get in and do

Ive made good money so far. Been in about 3 weeks and have made about $600 so far.
Im 6 ppl away from making my next $1000.00.

So in about a month of work. Ive made about $1600.00. On the side. With not much work into it. And no start up fees or cost.

So i like network marketing!!!



Congrats to you friend!

8/12/2014 9:21:04 PM Does anyone know the difference between a pyramid scheme and MLM ???  
stephisicated
Over 1,000 Posts (1,113)
Teaneck, NJ
34, joined Jan. 2013


Very simple. A pyramid is a program where there is money that trickles up to one or a select few number of people. It's considered illegal because he receives a cut out of every entrant. Mlms have the same concept it's just that there is a product being sold and the person at top makes money up until a certain point.

9/11/2014 8:02:16 PM Does anyone know the difference between a pyramid scheme and MLM ???  

romellohot
Abingdon, MD
42, joined Jan. 2013


Quote from stephisicated:
Very simple. A pyramid is a program where there is money that trickles up to one or a select few number of people. It's considered illegal because he receives a cut out of every entrant. Mlms have the same concept it's just that there is a product being sold and the person at top makes money up until a certain point.



I agree about the pyramid part but not about your definition of MLM. M.L.M stands for multi level marketing meaning that you get paid on multiple levels. Though it seems similar to a pyramid, it's actually very different. in MLM, everyone has the same amount to gain, whether a person gets started early in the business or years later in the business, that person still has the potential to earn as much or even MORE money then the person who got in first. And that's because MLM pays for productivity. The person who brings inthe most customers to the company will earn the most and that is a fair way to do business if you ask me. How often do you go to work and see the slouchers in the company who only do enough to keep their job and slack off every chance they get and while you are busting your tail..they are making the same money as you are! Now does that seem fair?

12/27/2014 10:38:23 AM Does anyone know the difference between a pyramid scheme and MLM ???  

letsplay54143
Over 2,000 Posts (2,787)
Marinette, WI
69, joined Apr. 2009


There are some huge MLM companies out there. One of the big ones that everyone has heard pf is Avon Beauty Products. A completely ligitiment company selling products through private vendors. If you are a vendor you get a percentage of the sales of every one you recruit and a lesser percentage of the sales of everyone they recruit, and on and on and on. Of course after a short period in the business all of your friends turn and run when they see you coming because they have all of your product they can use for the next ten years and everyone you recruited is competing against you for sales and they don't want you to try and recruit them.

12/27/2014 7:12:25 PM Does anyone know the difference between a pyramid scheme and MLM ???  
realdeal0007
Suwanee, GA
46, joined Mar. 2012


The answer is simple...a pyramid or Ponzi scheme DOES NOT offer of provide a product or a service. Its that simple. if somebody is trying to get you into a network marketing or MLM program / company, in order for it to be legitimate it has to offer a product or a service.

1/6/2015 5:27:23 AM Does anyone know the difference between a pyramid scheme and MLM ???  

gamerman17
Over 4,000 Posts! (6,552)
New York, NY
30, joined Apr. 2010


Quote from romellohot:
Absolutely! Well said! Pyramid schemes offer no tangible products or services. MLM's are companies that use word of mouth marketing to reach the consumers instead of paying for advertisements like traditional business. Traditional businesses will spend millions of dollars in ad campaigns...with MLMs, they use the millions of dollars to pay the affiliates to reach the consumers.

It's actually pretty cool if you think about it....The more you produce, the more you earn it's really that simple!


Never thought of the pyramid scheme that particular way. It basically cuts off the middle man and you will get to preserve more of the profits you have gained from your marketing revenue. Quite impressive when you think about it actually. The only downside to this is that your customers you come in contact with ACTUALLY have to be contributors to this sort of scheme unless this implementation of strategy will not work. Frankly, Id consider doing a SWOT Analysis and a bit of market evaluation and penetration before starting t his scheme, but that is just me. But the pyramid scheme definitely sounds like it will work given the environment.....gamer