Pyramid Schemes

In the Philippines, people fall for pyramid schemes ALL THE TIME.

I've never really understood why. To me it's like handing your watch to a stranger who asks for it, and expecting him to return it.

Someone comes up to you and says, "I can give you 40% return on your investment."

Now think about it.

The biggest companies in the world post after tax profits of 10-20%. These guys make planes or fly planes or make can openers, build bridges. Actual business enterprises and they make only 10-20% from their capital. And it's not just capital. There's people, there's know-how, there's industry. Billions of dollars and they can only make 10-20%.

Now how can you and your measely P50,000 make 40%?

Think about it for one minute. Just one uninterrupted minute.

From time to time friends ask me for advice on investing their money and my response is the same all the time, "if it is too good to be true, it's probably not."

People say these schemes prey on those who want to get rich quick. Try those who want to get poor quick.