Get Rich Quick And Bust!

by Silicon Valley Blogger on 2008-03-0817

Most of us want to get further along in life, financially speaking — to grow, improve and develop ourselves further while hopefully finding prosperity in the process. I can only name one person I’ve ever met in my life who didn’t want to go down this well-beaten path as he reveled in a much more austere way of living which included months of hiking in the Appalachian trail and involvement in interesting “basic living” communes. But for everyone else I know, I’ve seen them heed the familiar call to wealth building, with some more eager about pursuing this than others.

I’ve also seen people get ahead of themselves quite a bit with money making opportunities, and that’s why I’ve decided to devote a few posts on this topic. Earlier on, I’ve described the profile of the “get rich quick” lover; this time, I’d like to discuss what’s behind these schemes.

Now there will always be people who will make money through such ideas, which could actually be profitable and legitimate. If we have open enough minds, you’ll see that some of them may actually work for certain people — especially those who are skilled in the fields these ventures operate in. But the problem is that there are also schemes that are outright scams, or that entice people to join in these operations even if they’re clearly not a fit for these activities. In fact, most people may not be “right” for these things but end up getting swept in by the promise of turning in a quick buck.

If you’re truly interested in building wealth, it’s not enough that you make money, it’s also about keeping that money and minimizing your costs, expenses and losses as much as you can.

Get Rich Quick, make money fast

So how do you know if a scheme is something you should avoid or at the very least, evaluated *very* carefully?

Spotting Get Rich Quick Schemes

  • The scheme has a good amount of risk involved.
  • It asks you to put up significant amounts of money up front.
  • The scheme has no known track record or has a poor history of returns.
  • It promises you a lot of money for little work.
  • It promises you a lot of money quickly.
  • It appears “viral” or tries to snare as many people as possible into the scheme.
  • It sounds too good to be true, with a high payout.
  • Over time, you’re getting poorer rather than richer.
  • It banks on one’s emotions, particularly on one’s greed.

In many of these schemes, only a handful of people make money and everyone else loses their entire investment. I certainly wouldn’t call this a long-term plan for financial success. Here are a few examples that I came up with that are of this ilk:

Types of Get Rich Quick Schemes

Some examples:

  • “investing” in penny stocks
  • flipping houses
  • MLM or network marketing
  • day trading or compulsive market timing
  • gambling
  • purchasing lottery tickets on a regular basis

The worst of the bunch are identified as Ponzi or pyramid schemes and are fraudulent, but do note that not all these schemes are illegal per se, and not all are entirely unethical either. Some are merely very high risk ventures that people tend to do to try to achieve instant success. What makes them “get rich quick” is the promise of big returns for relatively little work and with quick turnaround, which can lure many into thinking that this is the way their fortunes can be built; and while there are those who are terribly lucky (see: buying lottery tickets) or those who rise up to become “experts” in these areas and who do succeed in building their wealth this way, most actually just end up with less than they started with.

So when evaluating an opportunity, just make sure you read through the fine print and understand the risks involved before jumping in. If you must get involved in something like this, start out small so that you limit your potential losses. Personally, these more adventurous and exotic opportunities aren’t my cup of tea.

Copyright © 2008 The Digerati Life. All Rights Reserved.

{ 13 comments… read them below or add one }

RacerX March 8, 2008 at 2:43 pm

A great rule of thumb is to ask yourself, “If you can really make $1MM, why would they share the secret for $49?” If I were them I would take the $1MM instead!

Dividends4Life March 8, 2008 at 4:07 pm

I had once read that there is a certain personality type that is susceptible to these get rich quick schemes. Other than being overly optimistic, I don’t remember the other characteristics.

Best Wishes,

fathersez March 8, 2008 at 8:13 pm

Tell me about this!

Over the years, I have invested in my fair share of GRQS’s.

Though I have not really got into the Nigerian prince variety, lack of proper evaluation of the opportunities presented, has cost me some serious bucks.

And D4L, qualifying requirements would be greed and perhaps stupidity.

Working Dollar March 9, 2008 at 8:37 am

“If you’re truly interested in building wealth, it’s not enough that you make money, it’s also about keeping that money and minimizing your costs, expenses and losses as much as you can.”

Excellent point above, also good post. I have been involved in several “schemes”, not so much “get rich”, most were MLM oppportunities. Some I made a bunch of money in, and some I lost everything and put myself into tremendous debt.

The list above called “Spotting Get Rich Quick Schemes” is a good foundation to use to discern whether the opportunity is a good one or not. Especially pay attention to the upfront costs – and set a time frame (a goal to reach an income in a given time period) if you decide to participate. Otherwise, be discerning.

jblee March 9, 2008 at 8:47 am

What do you mean by “flipping houses”?

I apologize for my ignorance. I’m not quite familiar with “housing” terms hehe.

The Digerati Life March 9, 2008 at 2:39 pm


House flipping is the practice of buying a house, working on it or waiting for it to appreciate in value, then quickly reselling it for a profit.

More info here.

It was a form of investment that allowed you to make a handsome sum while the housing market was peaking.

Kathryn March 9, 2008 at 2:51 pm

Great selection of quick tips for identifying a scheme like this! I’d also add that you should be able to find a legitimate website associated with any offer … and not just one that looks legitimate but one that you can actually track as having a history on the web over time.

Building Skills March 9, 2008 at 10:08 pm

It’s also important that you have to choose the business that you are interested to work with. Thanks for sharing this great article! 😉

roger March 12, 2008 at 2:39 pm

‘Get rich quick’ is a relative term but as pointed out in the article it implies minimal work for maximum return. (The ultimate has got to be the lottery it’s only 14m – 1).

But on a more serious note I am actively involved in a Network Marketing business at the moment and I WOULD class it as a get rich quick scheme. Why? Well it has a 5 year plan with a system that has been proven over time to produce an income of approximately £7K per month. There is no way on this earth would I ever be able to command such a wage even if I worked 45 years! So yes, relatively speaking, it is a get rich quick scheme and yes I am on track having been doing it for a year and now earning 1k per month (part time).

Billy December 10, 2009 at 12:42 am

I’m with Roger on this one. Having worked in the public sector for 20 (very) odd years just about earning a living wage, I can say that the lure of “get rich quick” schemes is strong. I prefer the “get richer quicker” type scheme, and after 18 months of research and working hard, I am now starting to work my way out of the daily grind. There is no way I could have done this if I’d stayed in my previous rut. There ain’t no pension these days and I’ll be able to do this from my wheelchair:)

Armiey A Maza December 20, 2009 at 11:49 am

This is good and useful information. I agree with you that when evaluating an opportunity, just make sure you read through the fine print and understand the risks involved before jumping in.

Noelle April 12, 2010 at 9:30 am

I must say that I agree with some of what you are saying and disagree at the same time. I have had some pretty good success on both flipping houses and trading penny stocks. But I must say I educated myself before I did both. I have belong to RE investment clubs and attended educational seminars for two years before I ever tried to flip a house. I have flip four houses now and the least amount of money I made was $17,000 on a house that took me three months to flip. But that doesn’t account for all the countless hours I spent learning the RE market. The same goes for penny stocks. I was investing in the stock market for 12 years and learning as I went (I have probably read at least 20 books on all different kinds of investing, including penny stocks) before I ever considered trading penny stocks. So get rich quick? Probably not, but you can definitely make a lot of money over time.

Roger, the Amateur Financier April 25, 2011 at 9:09 am

Excellent advice; there are far too many get-rich-schemes out there, and most are surprisingly seductive at first glance. If you don’t control your impulses, it’s easy to fall under their spell. It’s important to remember that if a method of making money is half as successful as its promoters suggest, they probably wouldn’t be offering it to you for a ‘low, low price’. As RacerX noted, why not take the money you can make with the plan/product/procedure and live on that?

Leave a Comment