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Referral based business or Pyramid Schemes?

David Aladegbaiye Patricks

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It started among a few friends and then it has become a miracle call for many hoping to make extra income. My friend told me about a “financial opportunity.” I was invited to invest R3,500, and in a few days I’d stand to get back R 750. I only had to get two other people to invest too. This would be easy, because they could make so much money.

A few years ago, I remember many people playing The Invest and reward scheme, and they were all waiting to get bonus payout. What happened? Why did that scheme stop? Did everyone eventually become a millionaire and cash out their millions?

The “Investing schemes,” “financial networking” “golden circle” “Friends Network,” “pyramid games”: they’re all the same. They’re also called “ponzi schemes,” named after Charles Ponzi, a man who perfected the game in 1919. No matter what they”re called, pyramids are a lie, a scam, and they really do not work.

You see these ponzi artists, show off cars and houses and you get motivated to conquer the world. The problem is that no one really tells you the truth, that you will have to get the fat boss more points before you can really harvest. It get’s really frustrating and sometimes demeaning and the saddest part is that these schemes prowls on the low income house holds.

The fact about these referral schemes is that , the meal has already been served and shared before these hopefuls even started and they would keep filling in points for the fat cats.

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The lie

All ponzi schemes work the same way, regardless of the particular details of any one game: they pay off old investors with the money from new investors. Paying off old investors with the money from new investors is a dishonest way to make money, because no money actually gets “made.”

There are two ways to make money. To sell money, or sell stuff.

Selling money:

Banks and other usurers who sell money pay depositors a fee, called interest, which is much, much, less than the fee they charge other people who buy money (take out loans). For example, saving accounts currently pay 2% while personal unsecured loans cost 10%. This difference between 2 and 10 percent is the profit the bank makes after it pays off your investment. You are at the top of this “pyramid,”but the amount you take out of the bank is four times less than the amount that stays in and makes the bank directors rich. “New money” comes into this “pyramid”from people who eventually pay much more back on their loans than they take out.

Gambling casinos make money the same way, paying out much less to winners than they keep from losers.

Selling stuff:

The other way to make money is to invest with a company that sells something: a service, information, or objects. If your investment is successful, then the company has found consumers for its things, and received more money than it must pay back to you. New money comes from consumers who are willing to pay a marked-up price. As an investor you take a risk that the company will be able to pay you interest with its profits from the added value consumers create.3

With a ponzi scheme, there is no earned interest or added value. The only profit comes from having an ever-increasing number of players. New money to pay off old investors comes from new investors. No degree of wishful thinking will make money out of no money. If anyone tells you different, they are lying. New investors must be found, or the game collapses.

The Scam

Oh, but there will always be new people, I’m told. In fact, I’m told many things:

This game is different. people are responsible to those below them, they’re re-investing their money; they buy the slots of the people below them; they’re helping their friends take advantage of this great opportunity.

This doesn’t change the fact that new money comes from new investors. This practice will prolong the game, because there are more “slots” on the pyramids than people playing, but reality still holds. Unless the “winners” are reinvesting every dollar of what they “win,” (which they don’t) someone is going to eventually lose.

Because money is always being taken out of the game by winners, the winners can’t help everybody. So who gets helped? The people who are liked, the people who have friends. Who gets left out? The very people who get screwed in most social groups: the misfits, the difficult people, the people with few friends. And this is supposed to help our diverse community?

If people work hard at getting more investors, they will get their money; if people don’t work hard, then they deserve to lose what they invested.

This sounds familiar, like those other scams that put people into a situation where they might fail, and certainly many people will fail, and when people do fail, they are told it is their fault. This is a common political tool to make people feel worthless. The tool is only more insidious when it’s wielded by women we trust.

These are people we know. They have gotten their money. They’re helping other people get theirs.

The trust part, I hate that. Pyramids are a con game and that means confidence. Ponzi schemes thrive in homogeneous communities of people who trust and care about each other. In fact, the tighter the community, the better it works, and therefore the more damage it does when it collapses. I’ve seen specialized ponzis first-hand as a partner. I’ve read articles about how they run through the African communities, and I’m sure every group has its own con artists. Ponzi schemes wouldn’t work if people didn’t trust each other. Would you give R 2500 to some stranger on the corner who said she would pay you back R 20 000 in three days?

If people don’t play the game early, then it’s their fault, they just didn’t luck out like we did.

The odds of winning get worse and worse the longer the game is played. Some people think this recent pyramid is just a form of gambling, but no. It’s a game for suckers and crooks. Encouraging your friends to gamble in a game where their odds of winning their money is worse than yours were, because you got in the game first, should make you feel uncomfortable. Oh, but that must be why winners “help” those on the pyramid below them.

Well, I signed something when I put in my money, saying it was a gift, and I didn’t expect anything back in return.

This is a new twist, to protect the people already in the game from criminal prosecution and civil lawsuits. Early ponzis had one person at the top who raked in the cash. These “new age”pyramids turn our friends into criminals who must be protected by lies on paper. If this game is so good for communication in our community, why must we lie to our friends immediately upon entering the game?

This is a great opportunity to talk about our money stuff.

If you want to deal with “money stuff,”try buying a house with your friends. Or loan someone a large sum of money. Or borrow a large sum. Co-sign a loan. Start a business with a friend. There are companies that are selling shares and securities to companies, as well as investment brokers. These are real opportunities to learn what  taught you about money, and discover how you can do it differently. Scamming your friends is diminishing, not revolutionary.

It won’t work.

I am the Co-founder of NativityConcepts,SA , acting Brands Manager for Maphorisa initiatives, Shareholder of empowerprojects, Psychologist at Lovefoundation, Mentoring partner for Mzanidirectories. A business mind, a playful soul and a fan of life. I love to share my experiences and feelings in a practical way, hence i ended up with a hobby for writing.

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Veolia signs landmark B-BBEE deal with Ceracue

Metrosmag,SA

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“Veolia was looking for a local development partner with strong project experience in the water treatment markets,” explains Gunter Rencken, Managing Director, Veolia Water Technologies South Africa. “In Ceracure, with whom we’ve had a less formalised working partnership for about four years, Veolia has a hands-on, active B-BBEE partner with a thorough understanding of our core business and the water treatment market.”

This close alignment in corporate vision lays the basis for a synergistic approach to increased business development in both South Africa and Africa. “With this partnership in place, Veolia can confidently amplify business development avenues and enhance our project reach in the municipal and industrial markets,” Rencken continues.

“In addition to demonstrating Veolia’s seriousness to transformation and social development, it also means we’ll be able to supply water treatment solutions encompassing a broader scope of works,” explains Langa Nxumalo, Managing Director, Ceracure. “Together, we can advance our technical and business capabilities, offering a superior and integrated solution for water treatment projects. This ‘one plus one is equal to three’ strategy will allow better project execution in line with clients requirements, all thanks to a good balance sheet and technical experience by Veolia.”

The partnership will also see Veolia South Africa taking an active approach to expanding Ceracure’s business capabilities. “We are assisting Ceracure with achieving a higher CIDB grading, and have planned for a structured transfer of technology and skills of Veolia’s water treatment expertise to Ceracure,” Rencken explains.

Veolia’s shareholding arrangement with Ceracure represents an important pillar of the company’s new vision that is enhancing the water solutions specialist’s delivery of highly efficient, low-footprint water treatment technologies in South Africa and Africa. Alongside the B-BBEE deal are a range of recent organisational and technological innovations that have streamlined the company’s manufacturing, distribution and service networks across the region. Veolia South Africa is now positioned as a key technology and manufacturing hub for Veolia’s new range of standard engineered products and systems as well the company’s range of Hydrex™ speciality chemicals.

“We are excited to welcome Ceracure on board, and look forward to a fruitful synergy with them as we continue to tackle Africa’s water treatment challenges,” Rencken concludes.

Veolia group is the global leader in optimized resource management. With over 163 000 employees worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them.In 2016, the Veolia group supplied 100 million people with drinking water and 61 million people with wastewater service, produced 54 million megawatt hours of energy and converted 31 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.39 billion in 2016.

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Arduino Education Kit for young students aids technology learning

Metrosmag,SA

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Johannesburg, South Africa – RS Components (RS), the trading brand of Electrocomponents plc (LSE:ECM), the global distributor for engineers, has announced the availability of the Arduino CTC 101 Education Kit, which is a complete e-learning platform enabling young students to learn the fundamentals of electronics, programming and mechatronics. The CTC 101 kit has been designed for teachers and other instructors working in education and is specially tailored for the 13 to 17 age group at secondary schools. Each kit includes enough electronic components for a class of 24 students and a teacher.

Today, Arduino is one of the most popular open-source electronics platforms. Initiated in 2005, the Arduino project targeted the development of low-cost and easy-to-use hardware and software that could be used by non-engineers or simply anyone new to electronics that was interested in creating digital electronic projects.

Building upon this foundation, the Arduino Education programme was set up to empower educators with the necessary hardware and software tools to create a more hands-on and innovative learning experience. As a major element of the initiative, the CTC, or Creative Technologies in the Classroom, is Arduino’s one-of-a-kind STEAM (Science, Technology, Engineering, Arts and Mathematics) programme for upper secondary education.

The CTC enables the introduction of students to the fundamentals of programming, electronics and mechatronics through a series of well-documented projects and easy-to-assemble experiments. Training for the programme is available online and through a combination of recorded lectures, support materials and Q&A forums, via Arduino.

Specifically, the CTC 101 kit supports programming and mechatronics with five themed modules and offers more than 25 hands-on experiments. All the parts in the kit are completely reusable, thereby enabling experiments to be reconfigured in endless combinations and further developed for more advanced students and projects.

Each CTC 101 kit includes enough electronic components for a class of 24 students and a teacher. It includes: six Genuino 101 programmable microcontroller boards; six Arduino Education Shields; a set of sensors and actuators; component modules; breadboards; a wide selection of electronic components, connectors and wires; plus other elements such as servo motors, USB cable, wheels and bearings, batteries and power modules.

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Vodacom Group appoints Jabu Moleketi as Chairman & Saki Macozoma to Board

Metrosmag,SA

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On Thursday, Vodacom Group announced the appointment of Jabu Moleketi (60) as Non-Executive Chairman and Saki Macozoma (60) as a lead Independent Director with effect from 19 July 2017. Jabu Moleketi will succeed Peter Moyo (54), who will have served as Chairman for eight years when he retires and steps down from the Vodacom Board on 18 July 2017. At the same time, Saki Macozoma will fill the role effectively vacated by Jabu Moleketi.

Shameel Joosub, Vodacom Group Chief Executive, says: “I would like to thank Peter for his leadership and dedicated service to the Vodacom Group over the last eight years. I wish him much success in his future endeavours. The appointment of Jabu and Saki is the outcome of an intensive search process coordinated by an external search firm and the Nomination Committee. I look forward to working with Jabu in his new role and welcome Saki to the Vodacom fold. Jabu has deep knowledge of the company and the industry whilst Saki brings with him in-depth financial services experience and corporate governance expertise.”

Jabu Moleketi joined the Vodacom Board in November 2009. Outside of his Vodacom tenure, he has extensive financial services and corporate finance expertise as a director on company boards with interests across multiple industries in the private sector including Remgro, MMI Holdings and Brait. Jabu Moleketi also served as South Africa’s Deputy Minister of Finance between 2004 and 2008. He will assume the role of Chairman of Vodacom’s Nomination Committee while stepping down from the Audit, Risk and Compliance Committee.

Saki Macozoma is a prominent businessman in South Africa and is currently the Chairman of Safika Holdings, Tshipi e Ntle and Ntsimbintle Mining in addition to holding a directorship in Volkswagen South Africa. Saki Macozoma was formerly Chairman of Liberty Holdings, Chairman of Standard Bank and President of Business Leadership South Africa. In 2012 he was recognised for his work in civil society where the University of South Africa (Unisa) bestowed on him one of its highest honours – the Calabash Award – for his fight against oppression during the apartheid regime. He will be appointed to Vodacom’s Audit, Risk and Compliance Committee.

Incoming Vodacom Chairman, Jabu Moleketi, says: “I look forward to taking up the position as Chairman of the Vodacom Group at such an exciting time in the company’s journey. The business is poised to conclude its biggest acquisition in its history, the R35 billion Safaricom transaction, which will make Vodacom a serious financial services player on the continent. It is therefore fitting that Saki Macozoma joins our Board at this time, given the pivotal roles that he played at Liberty Holdings and its parent company Standard Bank. I am confident that we have the right strategy and leadership team in place to deliver on our vision of becoming a leading digital company, empowering a connected society.”

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