Utah's plethora of shady business opportunities
Now, all of us have heard the adage, "If it sounds too good to be true, it probably is." but yet so many of us still hearken to the alluring voice of some shady business opportunities.
I was once invited to check out a seminar for one of these. (I love how they're always called 'seminars' and always held in peoples' living rooms or hotel conference rooms) It was a new business that was going to revolutionize the internet. It was a monitored, secure intranet, where every site was approved, so that anyone surfing this intranet would avoid running into any objectionable material.
So all you had to do was pay $500, and you got your own merchant website, a 'store portal' they called it. Everything that was purchased through your site, you got a percentage kickback. And the best part about this whole network, is the new technology they developed of self-expanding bandwidth. When too many people where online at once, the bandwidth automatically doubles, so that internet data-sharing is never slowed down!
Obviously this promised huge returns, and a friend of mine bought into it, along with their entire family, close relatives, and friends. I stayed aloof, kept my $500, and they couldn't believe I didn't want to receive residual checks of tens of thousands of dollars coming to my mailbox for the rest of my life. They were sure to show me when any one of their friends received a check for any dollar amount. To this day, I don't know if any of them have broken even.
Over the summer a guy in my ward wanted me to come with him to check out a business opportunity his friend had introduced him to. I went with him, expecting to help him decide to invest in it or not. We get to this guy's house in Orem and start listening to his 'presentation'. It wasn't long before I realized my friend had already signed up, and wanted me to be one of the guys in his next tier. It was a utilities company with the same idea - when you pay your utilities you get a percentage kickback, and when you have friends sign up you get a kickback from theirs, and their friends', etc.
Everyone needs utilities, right? Why not make money while you're paying your bills?! All you have to do is pay $500 upfront, get all of your friends and family to sign up, and then sit back and watch as huge checks come to your mailbox the rest of your life. We asked to see an example of a check, and the guy asks his friend "Hey - where'd we put mom's check? Is it in my Beamer, or yours?"
We asked how the business operated - they breezed over that part, and reminded us how much money we'd be making. I asked to see financial statements, or company records showing its stability - they showed me testimonials from three former attorneys general. In the end I kept my $500, and I'm sure down the road I will regret actually having to work for the huge checks that I will get.
I've never known anyone personally who has actually received the payout they were promised in any business deal similar to this. While I was working at a bank one time, a guy deposited a check one day for about $3.00 from a company that I knew was a multi-level-marketing company. I asked him about his experience. He prefaced it by introducing himself as the Bishop of his ward, and then talked up the company like it was an untapped gold mine. Of course, he hadn't 'really been working at it lately' so he wasn't seeing the sizable checks he once had. Why is that always the same story?
It is my observation that most people don't even get back the money they put into these companies. If they did, the company wouldn't survive, because those at the top are profiting from those signing up below them. Stock investors look at Return on Investment to determine if an investment is worth making. So if you have less than a 50% chance of even breaking even, or getting a 0% return on your investment, is that a smart investment?
The way I talk about these types of 'business opportunities' makes them sound obviously shady. It's black-and-white that these are usually stupid 'investments'. So then why are we susceptible to their offers? Why do we think that we'll be the exception? That we'll make money when everyone else just loses their initial $500? Utah is especially fond of these types of businesses, and is labeled by some as the MLM capital of the world.
Why do we fall for these schemes? We hear our Mother's voice in our mind, clearly repeating the mantra "If it sounds too good to be true, it probably is", and yet we still take the bait when we see these offers that sound to good to be true. Someone please shed light on this for me.