New Commodity Called Friends

Dear WordPress,

Of late I have been receiving countless emails / sms / invites through social networking sites from friends and strangers offering me to join some kind of  he multi-level marketing / pyramid / get-rich-quick / 5 figures schemes. Well, first of all, thank you very much for thinking about me first. Friends share the good stuff (in this case is highly unlikely to be so) I’ll say. Secondly, no thank you in return. Don’t take it personally but please shove such thoughts (yes, it doesn’t even come to the offer stage yet) to someone else you may not want to consider as friends.

CHARLES PONZI : Modern Day Schemers Unwittingly “Pay” Tribute to this Fellow (Picture courtesy of Wikipedia)

Being raised in a conventional and conservative family (another ‘yes’, for the getting married thing keeps on coming up too frequently now… sigh!), I believe money, how little or plenty, can only come from pure toil and usually accompanied by sweat and sometime tears or blood. Simply put, hard work and true endeavour is the real way of getting rich. Of course, being smart about it doesn’t necessarily make it a hoax or scam. Basically I believe that any income generating venture must lie upon some solid economically verifiable models. Just think, if it was that easy to receive 5 figures income just by getting dozens of your friends to chuck in RM100 on a one time basis, wouldn’t :

1. Bank Negara be all happy and smiling;
2. the government have to make it a national duty for its citizens to work in the civil service (since everybody is already earning 5 figures income);
3. the IMF be renamed the International Pyramid Fund (IPF);
4. factories, offices, restaurants, manufacturers, financial and educational institutions close shop because there is no one to employ and hence no need for production and education

Everybody is just lying around the house or posing in front of brand new cars or getting their pictures snapped with wads of RM50 notes in their hands and basically doing nothing but spewing countless sms / emails / invites to every single person they know or just gotten to know of. Get real people! Remember the age old saying that “If it is too good to be true then it isn’t so”. It isn’t economically possible, financially viable nor technically feasible. It doesn’t make sense and defies all logic. A classical hogwash indeed. Don’t get me wrong, I plan to retire real early if so possible and do things I want to. To do so, you need lots of money obviously. But I’m neither that dumb nor gullible for a quick and easy way to get rich or at least live comfortably.

Now of course, people will say the proof is in the pudding. But today’s pudding can be made of artificial ingredients and preservatives unlike those of yesteryears where a considerable amount of effort (and love) are put into making puddings by our moms. What you see of the so-called success by these pundits of get-rich-schemers are those who are on top of the pyramid. As the sayings goes “The early bird catches the worm”, these people on the top rake in the profits of the scheme. Similar to fire, it will burn faster and bigger with more combustibles thrown in until there is nothing left to burn it and thereby consuming itself altogether. In other words, new comers to the schemes are just fodder to the fire and have to get more in order to reap the benefits before the whole thing become a victim of its own success.

If we look back into history, this whole scam has been thought up in theory as early as in 1857 by Charles Dickens in his serial satirical novel Little Dorrit. History recorded the first implementation of the theory by men called William F. “520 Percent” Miller, Edward Schlesinger and two others in 1899. They went by their scheme under the enterprising entity of The Franklin Syndicate. It was so successful (in deceiving people that is) that $100,00 flowed into their coffers on a weekly basis. It was reported this scheme managed to hoodwinked people into parting with their money amounting to $1.2 million. After the dusts of the scam has settled, an Italian immigrant began to lay the very foundations to all future monetary ruse in 1919. He was the grandfather of all confidence artist,  Charles Ponzi.

He migrated to the U.S. in November 15, 1903, stepping into the Boston port with only$2.50 in his pockets after being a bit too thrifty in his youth time back in Italy. He struggled doing odd jobs in New York and Florida before going back to Boston in 1917 for a job as a clerk. He went on to marry Rose Gnecco in 1918 and wreck the financials of his father-in-law grocery business. His ingenuity in exploiting man’s faults came to light in August 1919 when he thought of trading postage redemption coupons whilst opening his mail. Basically, he wanted to buy these coupons in countries that have weak economies and later sell it off in countries with stronger currency and thus profiting in the difference of the currency. This idea gave birth to the Securities Exchange Company.

He started small concentrating on friends and acquaintances preying on their gullibility, greed and curiosity. By playing the role of a very busy investor, he would turn up at neighbourhood cafes  and gatherings among friends and pepper them with quality cigars before whisking himself away on the premise of meeting important clients. He never did mention about his ‘scam’ preferring to dangle his successful lifestyle like a carrot in front of friends and waiting for them to pop the question “How can you be so rich?”. He would be only to happy to explain his dealings and invite them to invest with promises of a 50% return in 90 days (and then, he claimed after 45 days). It is of historic importance also to note that most of his marketing ploy is done by agents who were paid 10% commissions. These agents also have sub-agents bagging 5% for bringing in prospective victims.

In the end, Ponzi managed to swindled in excess of $15 million in matter of 8 months involving tens of thousands Boston people. A true feat and testament of mankind’s herd mentality. Ponzi soon after was sentenced to prison on various charges and released from prison in 1934 only to be deported back to Italy since he was never a citizen of the U.S. and therefore regarded as an undesirable alien. His wife divorced him and remarried. Ponzi in Italy took up various occupations before scraping up for a living as an interpreter. In early 1948, he suffered a stroke and left him partially paralysed before breathing his last breath in a charity hospital in Rio de Janeiro on January 18, 1949. He left behind $75 just enough for a burial service. Please read more in the article ran by the Smithsonian Magazine.

In essence, Ponzi’s incredible success laid upon the following:-
1. His ability to disguise and portray a lie as being the truth;
2. Exploiting people’s fondness in wishful thinking;
3. Ill-use of friendship and the immediate community to their detriment;
4. The media’s powerful effect on the perception of truth; and
5.mostly due to people’s total adoption of “Monkey see, monkey do” religion and abandoning logic in toto.

Today’s modern Ponzi scheme is still based on the above-mentioned key concepts but with the added exciting tool of the internet that opened up a whole larger pickings of potential investors/victims for the scheme. Some rely also on the illusion of selling products that costs 5 to 10 times more than similarly available products in the market. But the ‘entering fee’ requirement as well as getting more down liners are the hallmark of this age old scam. Of course, there are some direct selling systems out there that may be legitimate. However, the whole business of getting your pals joining up and then parting with a huge amount of ‘investment’ capital not only sounds fishy but is certainly an abuse of friendship. My humble advice to all of us are :

i. Most people believe in working hard and earning the fruits of labour. Asking them to invest some money in return for a measly sum of dividend whilst making thine self rich isn’t at all that polite to say the least.
ii. If you still have the indignity to propose so, please give face to your fellow friends. Don’t ask straight away, at least follow Mr. Ponzi’s example of his subtle approach (I’m not sure if this is a good advice by the way!)
iii. Last but not least, please don’t treat everything including your friends no matter how close, as plump and ripe opportunities to get rich.

Indeed, as the world runs out of its precious commodities as mankind continue to exploit it wholeheartedly, we must find new sources of growth and wealth to prosper ourselves and the country we live in. One couldn’t imagine trading friends for riches. Friends are definitely invaluable. But never a commodity!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s