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Simple English definitions for legal terms

Investor Protection Guide: Pyramid Scheme

Read a random definition: Higher Education and Vocational Training

A quick definition of Investor Protection Guide: Pyramid Scheme:

A pyramid scheme is an illegal business model where people are promised high returns on their investment. The scheme works by recruiting new members who must also invest money or pay membership fees. The initial recruiter and early investors are paid from the principals of investments or membership fees from the later investors. As the membership size grows, the pyramid eventually collapses because later investors are unable to recruit more members. Only the initial recruiter and a few early investors make money while the rest lose money. Pyramid schemes are unsustainable and investors should watch for warning signs such as promises of unrealistic returns, high upfront fees, and no clear descriptions of products or investments being offered.

A more thorough explanation:

A pyramid scheme is an illegal business model that promises high returns on investment but is unsustainable. It works by recruiting investors who must pay membership fees or invest money. The initial recruiter is at the top of the pyramid, and investors become members at lower levels. Members must recruit new members to make their returns, and the initial recruiter and early investors are paid from the principals of investments or membership fees from later investors. The pyramid eventually collapses because later investors are unable to recruit more members, and only the initial recruiter and a few early investors make money while the rest lose money.

For example, if an initial recruiter devises a pyramid scheme where each member must recruit nine new members, the number of members required to sustain the pyramid at level 9 would be 387 million or more than the population of the United States. This is unsustainable and shows how pyramid schemes are destined to fail.

Legitimate multi-level marketing (MLM) is often confused with pyramid schemes because MLM offers a tiered compensation system whereby a member who recruits a new member will get a cut of that new member's sales commissions. However, MLM can be distinguished from a pyramid scheme by determining the source of the returns. Returns from real product sales or investment gains are likely to be legitimate, while returns from principals of investments from later investors are likely to involve illegal pyramid schemes.

Investors should watch for warning signs of pyramid schemes, such as promises of unrealistic returns on investment, high upfront fees or investments, no clear descriptions of products, services, or investments being offered, and no real underlying investment.

For more information, see:

Investor Protection Guide: Promissory Note Scam | Investor Protection Guide: Systematic Investment Plan (SIP)

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20:07
I am semi proficient in spanish.
20:08
nice same. This sounds bad but I do not like how spanish sounds.
20:09
or english for that matter
20:09
There is nothing wrong with that. I like all the languages. It is tones that annoy me.
20:10
and fabrics
20:14
@GalenMeric: Sorry, tones is what I meant. Are you a wool fabric fan?
20:40
I think my only wool piece is my suits, and I like those quite a bit.
21:11
Wool is the best fabric
21:12
I only buy wool, denim, leather, and loop wheel cotton
21:31
@NemoPropheta: Im on that polyester, nylon, spandex, rayon, and fleece grind fam
21:32
jk but fr: I was watching how to fold dress shirts so they do not wrinkle, and the dude did his folding on a wool blanket so that the wool fibers grabbed the cotton shirt (like velcro), that is smart asf
21:32
That is smart
21:33
I want a weatherwool blanket
21:33
But I hang my shirts but Ive heard arguments against it
21:34
Generally I fold knitwear and hang everything else
21:35
Cant wait to get that big law money and spend it all on clothes 🙏
21:37
@NemoPropheta: his point was to protect the collar at all costs, therefore fold most shirts. I HATE when collars be acting out, so I will adpot his method: https://www.youtube.com/shorts/QaVKudd36zc?feature=share
21:38
oh fr wearin a suit is so fun t. someone who wears a suit seldomly
21:40
Yeah that makes sense, I do hate when my collar stick out at the sides, I cant figure out how to iron them so they maintain their shape
21:48
collar stays may be the answer. also, shirt stays are goated
21:50
@NemoPropheta: those look so nice, but i feel like one spec of dirt or one crease will ruin ur week, even if the money means nothing?
23:18
Idk I like worm i
23:19
bruh
23:19
I like worn in leather, and dirt is easy enough to clean off*
OrangeThing
23:27
Am I still muted on here
OrangeThing
23:27
Oh I guess not
OrangeThing
23:27
Hello all
f$ll to MarqU baby
Ur-
0:34
@OrangeThing: Welcome back Renard99
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