Day trading for life: Types of Get Rich Quick Schemes

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Getting rich does not happen quickly, no matter what you are told.
"Get rich quick" schemes are usually just that -- schemes. Someone will pitch you on a "fail-safe" way to make a large sum of money easily, if you will just invest some up-front cash. By the time you realize what has happened, your cash is gone and instead of getting rich you feel suddenly poor. These scams just prove the age-old wisdom, "if it seems too good to be true, it probably is."

Stock Market Schemes

Day trading , a form of high-risk investment, is an unsustainable "get rich quick" scheme that seeks to beat the market on a consistent basis by pulling money in and out of stocks on a short-term basis. Also beware of those who sell "stock market secrets" or "trading rules," as the market is not consistent enough to offer any sort of guarantee.

Many schemers are now telling you that you can make money at home from working online for just a few hours a day writing or clicking on ads or buying a website and paying to have traffic directed toward it. While you may be promised big money for these "paid for" schemes, it will usually take a lot of clicking or sifting through layers of confusing sites with many, many ads to make even a few dollars. Some of these schemes even claim to have endorsements from respected news channels or television shows. You'll see a story about a stay-at-home mom who now makes $10,000 a month. What they don't tell you is that this "story" is a fictional aggregate of results from a few people out of thousands who have tried to make money in the same way.

The traditional pyramid scheme sells an idea. The seller will claim to possess a "secret" that, if you buy it, will make you lots of money. Once you fork over the cash you are given nothing more than the "opportunity" to sell this supposed secret to others. The more and more people who are involved, the larger the pyramid grows, with nothing gained for those on the bottom.

The Ponzi scheme, although similar to a pyramid, is distinct in that it sells some sort of investment scheme. The terms may be complex, but the bottom line is that if you pay the money to sign up, you will get a return with 15 percent interest in 60 or 90 days. In the meantime, "investors" are charged with signing up more investors. The first investors are paid back their money with interest, but not because the pot of money is growing. They are paid from the investment of those on the bottom of the scheme and encouraged to reinvest their "earnings" for a larger reward in the future. If the seller and all the investors cannot keep signing up new investors, the scheme will eventually collapse. The seller may also disappear with all of the invested cash, putting an end to the scheme himself.

While these "schemes" can actually work for awhile, they still belong in the "get rich quick" category. MLM companies sell an actual product or service, but this is not where you'll make the big money. When you join, you are expected to sell the goods provided, but if you can convince others to sign up "under" you, you can receive a commission on all of the sales made by this junior associate. Some people can be very successful in these types of companies, both by selling the actual product and by persuading others to sign up. However, most people pay the fee to sign up or join because they are convinced it will be a simple cash cow, which it is not.