Pyramid Schemes are often concealed as investment opportunities. And they are not always easy to stop. They are for sure not called anything with the word pyramid in them.

The hallmarks of Pyramid Schemes are often that you are told to buy (invest) in some project that has extremely promising potential, and there is some possibility of earning extra if you get other people to also invest. What this almost always ends up in is that the project that was so promising demises, and that focus becomes to get new people to join. The only thing that keeps it afloat is that there is a constant flow of new members.

The most elaborate Schemes also set up systems that allow you to withdraw money or buy and sell shares of this scheme. Money is always difficult to get withdrawal, and common excuse in all pyramid games is that it is just around the corner, but as time goes it drags out.

Pyramid Schemes are always a bad investment for the people downwards in the system. For the people on the very top the usually manage to get away with some money. The end for these projects are always collapse, the question is not if they will collapse, but when they will collapse. When they do the people down the pyramid loses their money.

The reason for the collapse is that the pyramid schemes are dependent on the greater fool, that there is an unlimited amount of people and money willing to “invest”. At some point it is not possible to recruit more people, everybody has joined up their uncle, mother, grandparents, kids, friends and job colleagues. Then it starts to collapse when people want their money, and everybody realizes that it was no fundamental value to the project.

The thing is that often people when they have been burned on one Pyramid Schemes they are unable to learn from their mistakes, and join other pyramid schemes that have even greater lies and promises.