My Friend and Her Pyramid Scheme Story

I have been catching up with Lazy Man and Money’s blog for the past few days, after a long hiatus, and well, he’s garnered something of a reputation as the MLM blogger.

Reading through his blog brought to mind an old University classmate of mine who went the MLM route. We had been barely a year post graduation when she quit her job and sunk big money (several tens of thousands) into an MLM business with her brother. We heard that money from their retired parents were also involved.

She tried to recruit some of us University classmates as her down-lines at the beginning, with the usual spiel about earning 5-figure incomes within months and retiring early.  There were the usual practices of inviting us out for get-togethers only for the event to turn into a marketing presentation, which turned all of us friends off. One snarky friend asked her to call him only when she hit a 5-figured income herself, when she admitted that she was still far from it.

To her credit, she didn’t continue to harass us after our various refusals, but she did drift away after a while. We fell completely out of touch a few years back. There had always been a constraint between us after she took up with MLM. For my part, I’ve always had the feeling that she looked down on me a little for picking the unambitious and unadventurous and yes, loser, path of a salaried worker. And that she was always careful about what she shared of her life so that I would always only see the best and envy her – a little like Facebook in conversation form. Since I had the audacity to reject her offer of a dream life, and all that…

I found out recently that her MLM business had gone bust a few years back, and if my sources of information could be trusted, both she and her brother ended up with several hundreds of thousands of debt, due to extensive front loading practices in their MLM. Theirs was one of those pyramid schemes where there was little to no consideration of the retail side of the business, and under such circumstances front loading is exceptionally dangerous.

Apparently, in order to maintain a façade of success to facilitate their recruitment practices, my friend, her brother and their associates had to invest in fixings like luxury cars and branded goods, which eventually added to their debt burden. I also heard that they had convinced their down-lines to borrow in order to front load, and that together with other shady practices, left quite a number of their down-lines and associates broke and in huge debts.

That the business would not be sustainable was only to be expected given its practices. What saddened me more was the mindset that brought my friend and her down-lines to where she is today. Few of them were poor or uneducated, the subset that pyramid schemes usually target. They were mostly University students, young graduates and professionals just a couple of years into their career. The common trait amongst them – greed, yes certainly, but also an obsession with easy and effortless entrepreneurship and a contempt for the honest 9-5.

Also, my friend and her brother were the toplines for their group and were in charge of strategizing the recruitment and advancement of their team. Apparently this same MLM had several factions Singapore, but my friend and her brother headed the one that was the most notorious for front loading and huge upfront investments, , as well as other shady practices, so that they as toplines, could accelerate their commissions. While down-lines could claim that they had been conned into participating, my friend had no such excuse. She was in the know from day one; she willingly defrauded others to push her own agenda.

It is hard to think about a once good friend in the role of a bona fide conman. It is just as well that we are no longer in touch, because I am not sure how I should feel towards her if we still hung out. I just hope that she has found a more sustainable path towards her dreams, wherever she is now. As for me, I am glad that I stuck to the conventional path instead of trying to reach for that easy and effortless entrepreneurship. I may retire at 50 instead of 30, but at least it’s an honest living.

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2 comments on “My Friend and Her Pyramid Scheme Story

  1. Revanche says:

    It’s not just an honest living, it’s one that doesn’t harm others by its very nature.

    My sibling got involved in an MLM many years ago and while I was not privy to it, I know he caused a few family and friends to lose money in their “investments” when it inevitably went bust. He was, like you describe, naive, greedy, uneducated. And the mainstay of people who buy into this so deeply: enamoured with get rich quick thoughts.

    What a waste.

  2. Wow, incredible blog layout! How long have you been blogging for? you made blogging look easy. The overall look of your web site is great, let alone the content!. Thanks For Your article about My Friend and Her Pyramid Scheme Story The Singleton Files .

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