Pyramid Schemes... you in one?

[NotADcotor]

I knew this guy who got suckered into one of those back in the 90's. I pointed out that obvious pyramid scheme was obvious. The brochures he had literally had pyramid structures on them. When he couldn't get me in, the fucker gave my phone number to his boss. I tried to play it cool because I didn't want to fuck it up for him because then he would get pissed at me as he was still a true believer then. It really pissed me off. Soon enough he figured it out for himself.

That's the problem with most people in sales they tend to become annoying insufferable cunts to the people they know. I applied for a life insurance job at one of the major companies. They had a questionnaire I filled out. Nothing or almost nothing on actual insurance, loads of questions on how big your social circle was though. They never called me back but it was obvious they were looking for people to annoy their large social circles.

I applied to a gig selling vacum cleaners door to door. Buddy called me up almost begging me to take the job. Not a pyrimid scheme but I am glad I didn't take it, looked it up later when the internet became bigger and those guys were total fucking cunts in a don't take no for an answer.

 

[onomatopoeia]

Does the CPP count?

Some say it’s a Ponzi scheme

In many respects it is a scheme. Money is pooled and payments end when you die, unless you have a surviving spouse.
You could unfortunately die young and never collect your contributions. There is only a $2500 death benefit.
Frankly if I was single and knew the end was near I would try to get some deserving lady the CPP pension for life just to even the playing field.

Absolutely !

In the Canada Pension Plan, and in most defined benefit pension plans, the Employee contributions made are largely used to fund the pensions of people who have already retired. Government or Employer contributions fund the difference between the plan assets and its liabilities, (I worked in pension plan administration for about 15 years).

CPP was introduced in 1966, and anyone already working in Canada at that time received 'past service' credit for years worked through 1965. Since then, the average life expectancy in Canada has increased by about ten years, which is an increase in the benefit payment period of more than 250%.

This graph shows Canadian population by age as of 2020, in five year groups. The largest is age 55-59, and the size of the age 60-64 group is almost 97% as large as the age 30-34 group, which is the second largest. The average income of the age 55-64 group is probably significantly higher than those 25-35 years younger. There aren't a lot of 60 year old baristas.

All pyramid schemes rely on the size of the base being significantly larger than the size of the point. There aren't enough young people working now to support all of the older people at or near retirement age, for the rest of their lives. I can see the well running dry before anyone currently under age 40 gets to wet their beak, and probably a long time before that.

 

[glamphotographer]

Anyone who has fiat currency is in a pyramid scheme, so that's practically everyone.

 

[Ceiling Cat]

Back in the 2008 recession, I knew a guy that was selling Amway. He was a guy that was in his mid 30s in a mundane rat race job that was looking for a way to get rich fast. He was pulling every scam they gave him in his Amway scam book. He made himself unwelcome in many places by trying to pitch his over priced products. If his victims did not buy anything, ask them to just buy one item to help him out. The lowest priced item was a bar of soap for $5. This gave him a foot in the door to deliver the soap and pitch on a second occasion. This guy did this for two years before he gave up on getting rich on Amway products.

 

[Charlemagne]

Was she trying to get her money back?

She was more of a gold digger.

 

[Robert Mugabe]

NVDA

 

[benstt]

In the Canada Pension Plan, and in most defined benefit pension plans, the Employee contributions made are largely used to fund the pensions of people who have already retired. Government or Employer contributions fund the difference between the plan assets and its liabilities, (I worked in pension plan administration for about 15 years).

It is not accurate to generally describe defined benefit pensions as pyramid schemes. It depends on how they are funded.

A fully funded pension has enough assets to pay for all future pensions whether or not new contributions are made. ie in solvency all the payments are protected. Something like 90% of defined benefit plans in Ontario are fully funded, and regulatory scrutiny is kept on those that are underfunded. If you work for a company that has unfunded liabilities, you pay attention to their financial health. (eg Eatons retirees got screwed.)

My understanding is the US government pensions have huge unfunded liabilities, operating as a pay as you go. People hear commentators talk about the US and assume that the CPP is also the same, but no.

The CPP was switched away from a pay as you go model in the 1990's to a hybrid funded model, building up a reserve fund to handle the demographic shock of the baby boomers retiring. That is why the CPPIB manages such a huge investment fund for the CPP, and the CPP is projected to be stable for at least 75 years.

 

[dotdotdot69]

" A fully funded pension has enough assets to pay for all future pensions whether or not new contributions are made."

This is key and things are a lot different in the States than here. I'd say most stocks/shares tend to lean towards pyramid schemes unless it's backed with legit assets too. People pumping and dumping are the obvious schemes, but most legit companies have value and are backed up.

 

[craig_hoxton]

If someone tells you they're with World Financial Group, run the other way!

 

[SexB]

Primerica tried to recruit me a couple of times. If you ever want to piss off people who work in insurance, mention that MLM.

I also have a family member whose ex-girlfriend was a Scentsy Hun. I saw her trying to recruit his mother at one point.

 

[Zoot Allures]

Betting on Zero is a 2016 documentary. It investigates the allegation that Herbalife is a pyramid scheme, and follows Bill Ackman's short investment in Herbalife, which is ostensibly a billion-dollar bet that the company will soon collapse.

The documentary follows hedge fund titan Bill Ackman .
Ackman takes a billion-dollar short position in Herbalife, alleging it is a pyramid scheme destined to collapse.

Bill Ackman lost his billion dollar bet going by short on Herbalife.

Going short is betting against another trader who accepts the bet that comes due on a due date

You pay any money that is above the strike price, what it is today, on due date and the other guy pays you any money below the strike price


Herbalife’s stock topped out about a year after Ackman exited his short
and has since been on a steady decline.

Herbalife highest price ever was in Jan 2019 at $60 today it is $6.95

Two valuable life lessons

1 Never go short. Your biggest possible win is the stock goes to zero.
Your loses are unlimited as price going up has no limit

Ackman would of won the bet but after a billion dollar loss he tapped out,
You need very deep pockets and nerves of steel
to stay in a short as you wait, and wait and wait for the stock to drop meanwhile
you are losing money and lots of it


2 Like all MLM schemes, Herbalife targets the uneducated, the poor and
the naive with get rich quick schemes but even the educated and wealthy
get sucked into pyramid invertment schemes as greed takes hold

 

[Ponderling]

No one dare say Crypto might have a lot of pyramid in it?

 

[Zoot Allures]

No one dare say Crypto might have a lot of pyramid in it?

Excellent question

IMHO, the answer is not all crypto is a pyramid scheme

Beware any new crypto schemes as they use pump and dump. They hype their new coin then
as soon as the price goes up the creators sell at a profit and the value collapses.

The key difference between a legitimate crypto project and a crypto pyramid scheme is how they generate revenue.
In real projects, value comes from innovation and service quality.
Pyramid schemes, on the other hand, rely solely on new investments to keep running.

Not all crypto is a pyramid scheme, but all cyrpto has no underlying value.
I avoid them all and invest in compainies with a real product not a AI created value