Money in Real Life · 45 sec
Pyramid scheme
A practical idea for making clearer everyday money decisions.
The useful idea
- The useful idea
A pyramid scheme (also known as a pyramid scam) is a business model which, rather than earning money (or providing returns on investments) by sale of legitimate products to an end consumer, mainly earns
- How it works
money by recruiting new members with the promise of payments (or services).
- Why it matters
As the number of members multiplies, recruiting quickly becomes increasingly difficult until it is impossible, and therefore most of the newer recruits do not make a profit.
Why this matters
Use Pyramid scheme to compare the trade-offs before committing money.
Try this
Use Pyramid scheme to compare the trade-offs before committing money.
Test your recall
Which idea belongs to the explanation of Pyramid scheme?
- How it works
- The useful idea — correct
- Why it matters
A pyramid scheme (also known as a pyramid scam) is a business model which, rather than earning money (or providing returns on investments) by sale of legitimate products to an end consumer, mainly earns
General education only — not personal financial advice.