High Yield Market Research

There are many ways to make money – and lose money – on the Internet. So-called High Yield Investment Programs have attracted thousands and some have bilked a lot of people out of their investments.

Ponzi schemes – also known as pyramid schemes – are not unique to the Internet, but the Worldwide Web has certainly given them a new venue, a new catchment to exploit, and it is sometimes difficult to tell them apart from legitimate money-making programs.

"Caveat Emptor" means "buyer beware," and anyone buying into such money-making offers certainly needs to be wary.

Everyone is familiar with MLM programs. The acronym MLM stands for Multi Level Marketing, and these enterprises rely on participants bringing in a downline of other people, and everyone shares in the income of the enterprise. Hence "MLM" might also stand for "Make Lots of Money." Some people certainly do exactly that.

MLM – whether you love it or hate it as a money-making concept – does appeal to many people.

There is a similarity between MLM and pyramid or so-called Ponzi schemes, and that is that those who get in at the top stand to benefit the most, because their downlines propagate with considerable rapidity as the new venture spreads around the ‘net and perhaps around the world.

Unscrupulous people have taken advantage of this phenomenon by offering what they claim to be high yield investment opportunities which give you extraordinarily high rates of return.

A ponzi scheme relies on taking money from new members to pay those who joined first. Some say the US Social Security program has all the hallmarks of a pyramid scheme - but that's another story. As for the ones we are discussing, eventually the whole thing falls apart and those who came in late lose their money.

Strangely enough, these schemes – at least the ones the author has personal experience of – look on the face of it to be 100 per cent kosher. They have web sites that any major corporation might be proud of, and their terms and conditions read like an investment prospectus.

They may even offer regular conference calls where you can hear one of their leading figures explain how your money is being used in part for a variety of charitable purposes while it is also being invested in stock market or foreign exchange programs under the guidance of professionals.

What they seldom tell you is that other professionals – the ones in the Securities Exchange Commission for example – and those who take money laundering seriously and are doing their best to stamp it out – are also very interested in these "high yield" projects. They see it as their role in life to shut them down, which explains why the genuine programs tend to eventually go totally private.

Sharks and Little Fish

Nevertheless, the Internet has given the scam artists of this world a much bigger pool to swim in, and these sharks know there is always another school of innocent little fish waiting to be devoured. So they do what sharks do so well. They cruise around looking for prey.

On the other hand, the little fish are also cruising around looking for something to eat, and so it is no surprise that they too are looking for easy pickings.

Just like gamblers who hope to win every time they put their money down, the little fish are prepared to gamble on the next so-called "opportunity," even though they know that the last opportunity was a total bust.

The gambler mentality, by the way, is a loser mentality, because gamblers expect to lose more than they win. That’s why those who own the casinos are so wealthy – they know they have a never-ending supply of customers and they will forever cream a percentage off every dollar dropped in any game machine they own.

This is good business.

Now there are people who can not be classified as gamblers by any stretch of the imagination, since they prefer to earn their money the hard way – by working for it – and they are prudent about how they dispose of it. They save some, invest some and have fun with some…like buying the occasional lotto ticket or even a holiday in Vegas where they might make a few dollars, or just have fun watching other people sitting like zombies pumping money into the machines.

These same people have also learned from experience that the next great "opportunity" that comes along out of the blue presents two simple choices. You can choose to participate, or not.

And if participation requires no money down, no product purchase, and no perceivable risk of any sort, then they say to themselves – "well, maybe, just maybe, this is The One."

Baith and Hook

They do it cautiously however. They know the publicity associated with this new deal is likely just bait designed to get their attention. They know there is likely to be some sort of hook inside the bait.

But they can’t help sniffing around; especially if they believe that they can throw the hook. So they take a nibble, have a taste, and are prepared to spit the whole thing out if it shows even the slightest sign of being bad.

Which all brings us to this week’s intriguing "Secret Launch" project which has just hit the Internet. The "secret" is that something is being launched on October 31. But they are not saying what that something is. All they are saying is that you put no money down, and when it all happens you can expect to make millions.

Sound familiar?

A suspicious person would read all the copy, the endorsements, the promises that are not promises, and classify it as hype.

A totally suspicious person would read this article and wonder…what is this author up to? He has appeared to be warning us against ponzi and pyramid schemes and he is obviously aware that there is a lot of hype and almost criminal activity on the Internet (he knows there is, because he has been bilked himself)…so what’s he up to?

The answer is simple. This article is a market research test. The author wants to determine whether after reading a straightforward assessment of the risks involved in online activity some people will nevertheless choose to at least sniff at the bait.

At this juncture there is no way of saying whether this "Secret Launch" is going to deliver its promised millions. In fact, it would be simple to pre-judge it as yet another brilliantly devised scheme to benefit its architects far more than any future participants

So is it possible that this "Secret Launch" thing will deliver the goods?

Who knows.

But … what if this one is for real?

Still want to sniff the bait?

Well, you have been caveat emptored – now check out the link below, even if it’s just for self-education purposes.

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Michael Knight (CEO of www.cuddlysoftware.com ) is author of "Deadeasy Live – See How It Runs," (a review of talking ebook software) and editor of EZTALK – the world’s first talking newsletter.

© 2005 Michael Knight. All Rights Reserved.