You know what a Ponzi scheme is, right? Named after Charles Ponzi who ran several pyramid schemes during the early 20th century, a Ponzi scheme uses money from one set of “investors” to pay off a later set. This works great for a little while until investors start to run out.

However, to pay off the first investor, Ponzi required payment from three or more other investors in pay himself and the original investor. Now he has four investors. To pay them all off, he needed 12 more for a total of sixteen. To pay them, he needed 48 more, then 180, then 684, and so on, thus the more well-known term of “pyramid scheme.” It’s illegal because there is no product or service being provided in exchange for the “investment.”

BING! Then a light bulb went off in somebody’s head. Provide a product or service, and suddenly your pyramid scheme is legal!

Along comes Amway. Not the first “legitimate” MLM company, and far from being the last, but it is arguably the most well known and successful MLM in the world’s history. Now, Amway created a lot of millionaires. So it’s good, right?

Sure it’s great, if you’re one of the guys smooth-tongued enough to convince hundreds of people to fork over their cash for overpriced products. Have you noticed that an MLM pitch is never about the product, but rather about selling the dream of financial freedom?

Who do you know who is willing to pay $10 for a $2 bar of soap? But they will if it means getting rich quick! There are no hard statistics on the matter, but some estimate the failure rate of MLM distributors to be as high as 99.9 percent.

I’d rather take my chances at the blackjack table. At least there I have a 50/50 chance of winning and, even if I lose, my garage won’t be full of soap.