Why Do Filipinos Prefer Get-Rich-Quick Pyramid Schemes Rather Than Starting A Business?
By Alyanna Therese Tagamolila
Pyramid schemes have become increasingly rampant in the Philippines with about 4 million Filipinos having engaged in it since 2015 PNA data – while it may seem harmless, the fact that the economic classes CDE are the ones primarily affected by Pyramid schemes make it a societal problem rather than an asset in any way.
Pyramid schemes along with other money schemes such as Ponzi schemes are classified as “get rich quick” schemes that use different products to classify as a commodity-providing business when the truth of the matter is that members of pyramid scheme organizations get profit by recruiting new members. New membership fees make up for almost all of their profit and their products for sale are just a front.
Why do Filipinos fall for this?
In an article by the Philippine Daily Inquirer a few years ago, Understanding pyramid scams in PH | Inquirer Business, it was noted that Pyramid scams and get rich quick schemes appeal to the public because it seems to good to be true. Unlike the effort, time and financial backing needed to build a legitimate business, pyramid schemes seemingly only require the following:
- A minimal entrance fee that does not seem to be a significant amount compared to the promised return of investment
- A required number of people to recruit per month
- To use the script and already existing business tactic of the scheme when making sales or recruiting individuals – this results in little to no logistical effort for the one joining
These 3 seemingly easy steps look too good to be true with the profit that Pyramid schemes promise to those who joins them, however, the problems start to occur when one stops being able to recruit; there is a limit to how many people a person knows right?
Once you are unable to meet their terms, previous assets gotten through the pyramid schemes (cars, property that you are using but is named after the scheme) will be rescinded and your profit share from recruits dwindled – this is how it slowly turns from becoming a get quick rich scheme to a scheme that actually puts the ordinary Filipino into debt as one shells out more and more money to try and keep up with the terms agreed upon with the pyramid scheme.
In the Long Run
We at RBMC understand the appeal of getting your return of investment at 10 times over as quick as possible, who wouldn’t want to be rich or even just economically stable? However, in a realistic world, the best way to earn money is through sound and legal business practices that may seem like having no reward at the start but with the right planning and effort put into it, will profit more and more throughout the years.
Engaging in legitimate business practices may seem too slow when compared to the promises made by recruiters from pyramid schemes but, getting into a stable business set you up for a long time. Money earned quickly and through illegal means oftentimes become more of a liability than an asset, you spend it too fast, have to always think about protecting yourself along with other problems. Putting your money in a business however, steadily give you profit year by year with several opportunities for expansion, advancement and innovation to increase the profit without having to recruit other people.
To make sure that you are engaging in a sound means to earn income, here’s three things you should be looking for:
1. If it’s too good to be true, it probably is
Although we all would like to earn as quick as possible, it will require a lot more effort – in this world, work is needed first before we start to enjoy the fruits of our labor. So when you are presented with opportunities to get rich quick: if it’s too good to be true, it probably is.
2. Profit shouldn’t have to come from recruiting other people
The truth of the matter is, if you need to recruit people to earn your own profit and cannot guarantee to them their earnings – it mostly means you are scamming them as much as you are scamming yourself. Remember, pyramid schemes work by exploiting individuals and using their money for you to profit. Stop the cycle of endless exploitation brought by pyramid schemes and don’t recruit people into something wherein you cannot guarantee their profit or earnings.
3. Consult business professionals
The primarily appeal of pyramid schemes is that you don’t have to exert time and effort in researching and building up a business from the ground up. This is completely understandable as setting up a business is daunting especially if you don’t have the knowledge and experience needed to successfully launch a business. What we can tell you is this, we do know that it requires effort, but just because of this, do not fall for pyramid schemes, instead consult business professionals such as us here at RBMC and we will be able to help you start a business without the hassle and effort that discouraged you to do so in the first place.
You can book an appointment with us here Book an Appointment | RBM Consultancy if you want to get started!