How to Avoid Becoming the Next "Not So Legitimate" Investment Victim?

Who is open minded here? Who wants to be part of this breakthrough? Who wants to drive his dream car?

Me! Me! Me! 

Who would not want to live a better life? We all want it. But how do you make yourself pick the right opportunity or avoid the opposite one?

I will be very direct with you. I have seen a LOT in the world filled with promising opportunities and I was fortunate to have found the one right for me. 

I must tell you throw an opportunity and I will listen and might be part of it now as long as it's legal, ethical and sustainable.

In writing this I do not want to judge those people who are hopping from one opportunity to another. And also I do not want to give you that fear that your company might not be a good investment option. I am just here to show you the possible signs and good questions to ask before investing in the opportunities presented to you.

Your friends are maybe already in it. Or someone from your office or your family can still be guided.

Let me begin by answering this question, Is direct selling or network marketing legal?

YES! It's a business model that is widely accepted globally and legally allowed. Most countries have different regulations set for companies who choose direct selling as their business model. 

And before they are allowed to operate and given their business permits, they were checked.  Their marketing plan, products and standards are checked to ensure that they follow government regulations and meet the specified standards for the products or services that they are offering.

(This 1:44 minutes video explainer by Investopedia might help you.)

Most people mistakenly generalized Direct Selling as  Ponzi Scheme or Pyramiding. The Philippine Direct Selling Association defines it this way;

Direct Selling is face-to-face selling to the consumers through independent distributors or sales people. It is a legitimate marketing medium that is used to sell practically anything.

Pyramiding is an illegal money scam often confused with legitimate network marketing plans, where people are convinced to pay money for a chance to profit from the payments of others who might join later.  (This is unfair.)

How to differentiate a legitimate direct selling company from pyramiding using the 8-Point Test According to Philippine Direct Selling Association?

1. Is there a product?
2. Are commissions paid on sale of products and not on registration/entry fees?
3. Is the intent to sell a product not a position?
4. Is there no direct correlation between the number of recruits and compensation?
5. If recruitment were to be stopped today, will the participants still make money?
6.  Is there a reasonable product return policy?
7. Do products have fair market value?
8. Is there a compelling reason to buy?

If you want to know more about Direct Selling or Network Marketing these websites might help you:

World Federation of Direct Selling Association

Warning: Because of the media sensation about Bitcoin, you might be exploited by some people who are taking advantage of the timing with it's popularity and they might present themselves as another "Network Marketing Company."

Be careful and do your own research:

1. Please check with your country's Security and Exchange Commission or specific government office / website if the company that you are joining in is registered or allowed to collect investment for Bitcoin, Gold Currency or any other models.

2. Do you trust the person sharing you this opportunity? Well trust can be a good factor to consider but what if the person presenting to you is sincerely misinformed? Are you ready to take the risk?  Again use step step #1.

3. How long is the company operational? Do they have the office? Who is managing it? Check the track record of that company. Any investment is a risk but it is more risky to invest in a newly opened, less transparent and business with questionable background. 

4. "You earn without working." Ok if this is the case then how do they make money? Why is your money doubling or even increasing to 1000% ROI in 100-500 days? 

Well Bitcoin did 3 folds increase 6 months ago. But are you ready to risk? Some might offer it to you in this way - BITCOIN MINING, impressive! If you have the technical skills, the computers and the software go ahead do the mining and be rewarded. 

It can be tricky but it can work. Others offer a fee and they will do the mining for you. Just be careful.

There is market volatility and always consider that your investment is not guaranteed just like normal investment. The bigger the return, the higher the risk.

Let me clarify, Cryptocurrency or digital money can be the future and I would love see it do it or even be part of the owner or user of a digital currency. 

Disclosure: I believe in Network Marketing that it is a working business model. It takes effort and commitment to be successful just like any other business or job. I have been involved in the industry for 5 years now.

I also monitor the movement of Bitcoin and if you choose to invest in it - invest at your own risk and PLEASE find the right company that is allowed in your country, at least you are protected. :-) 

P.S. In writing this, my pure intention is to help you make smarter questions and decisions. It's entirely your personal choice to follow them, it may or may not save your financial future. But remember this - The Future Favors the Bold and the Brave and the of course the INFORMED ;-)

What do you think? I would love to see your comment below or if you have a topic you want to share please drop me an email. I also welcome request for the next topic or question to be discussed on this blog. See you!