What is a Pyramid Scheme?
Pyramid schemes are a non-sustainable business model where the original investors earn income by recruiting others rather than selling actual goods or products. The scheme is based on asking new investors to pay an initial payment in order that they can be a part of the scheme. The money collected from new investors is used to pay early investors. New members are given a guaranteed income if they can bring more participants to join the scheme. Although the principle of pyramid schemes may sound straightforward, they are typically presented to investors disguisedly. Therefore, it is crucial to understand the way it operates and the various ways it could be presented. How Pyramid Schemes Work The name implies it follows the form of a pyramid. It begins with one person, the recruiter, who is at the highest point of the pyramid. The person recruits one individual and they are required to put in a certain quantity of funds. The initial amount is given to the person who recruited you. In
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