We’ve all heard about pyramids. In fact, pyramids may be the single biggest misunderstood concept when evaluating a ‘Direct Sales’ business. I remember hearing a business idea back in the mid 1990’s, but because it didn’t fit the typical corporate scheme, the first question out of my mouth was, “Is this a pyramid?” I don’t even remember why I asked that question. Why would my first instinct be to ask, “Is this a pyramid?” without even knowing what a legitimate business is? In my experience as an independent business owner for over twenty years, I became curious for answers as to why, in many cases, people think of the word ‘pyramid’ when they encounter a business idea that falls outside the typical corporate structure. Could it be that people are being influenced through peer pressure? Why is it that people have a limited array of ideas when it comes to developing a business asset? Could it be possible that our perceptions are being influenced and could keep us from exploring a legitimate business? Would there be any benefit for the financial elites to purposely attempt to influence the population’s opinion? Orrin Woodward's new book the, ‘Financial Matrix’ describes a variety of motives that influence a population’s willingness to explore innovative ideas. With our livelihood at stake it makes economic sense to expand our knowledge about perceived pyramids.
Fact: Pyramids are some of the most stable structures. History reveals the Pyramids of Giza have been around over 4000 years. Archeologists estimate the first Egyptian pyramids were built between 2589 BC and 2504 BC.
Fact: Financial pyramids have been used to help organize income and retirement strategies over the years.
Fact: Leadership pyramids have been used by many businesses for corporate training.
Fact: Great teams have used pyramids. The late, great basketball coach John Wooden describes his ‘Pyramid of Success’ in his book, ‘Wooden.’
Fact: Org charts in the corporate world resemble a pyramid. They are stacked with executives, managers, and staff. In those situations, it’s difficult for someone on the bottom to pass those on the top unless there is a transfer, demotion, or termination.
Fact: If you are looking for a pyramid scheme look no farther than Fractional Reserve Banking accounting for $3.1 Trillion in new money supply. As a result 95% of the population account for 5% of the wealth, and now 50% of the 95% income earners make mere $52,000 / yr.
The most often misunderstood perception of a pyramid comes in the Direct Sales industry even though direct selling is the most efficient form of business. Best selling author Orrin Woodward has one of the best descriptions of what is illegal and legal. An illegal scheme is when “the person who gets in first makes more money than those who get in later. The payouts are based merely on chronological hierarchy and not performance. In contrast, a person’s income in a viable network marketing company isn’t based upon their chronological position but rather their performance. Top performers, in other words, quickly pass their sponsors in income and rank even though their sponsors joined first.” Be cautious with any business that requires high up front loading of product or those who don’t have a customer base. With that said Direct Sales is not a con. What it frequently comes down to is that people get disturbed when they have been sold on an idea that sounds too good to be true, almost a guarantee of success. In reality all legitimate businesses are simply an opportunity that produces predictable outcomes when work ethic, persistence, competency, and character are applied. To this end it’s important to know what type of business you are joining and who your partners are.
It’s true that what many people believe is a pyramid is really a Direct Sales company running systematically very similar to a Franchise. Companies that experience the highest % of predictable business success come from the Franchise industry as described by Author Michael Gerber in his best seller, ‘The E – Myth.’ Because franchises are market tested they typically achieve a 95% success rate. The high cost of buying a franchise, however, keeps most people out of that industry. Principles of franchising when applied in the emerging home - based business industry makes financial sense for people because of the low cost investment. This levels the playing field although it certainly does not limit the playing field. A home – based business using internet technology actually increases the geographical reach for business owners today. Using similar turn – key systems that make franchises successful could revive the American entrepreneurial spirit that’s been in decline as indicated by downward trending business start – ups.
The cornerstone of The LIFE Leadership Pyramid is the ‘Financial Fitness’ program. On one end of the foundation of the pyramid are strategies to become debt free. On the other end is the need to invest in ourselves that many believe is the most important asset today. Using this unique curriculum makes it possible to get an education about the playing field in today’s ‘Boom – Bust – Cycle’ economy. This is uniquely described in LIFE Leadership as the ‘Financial Matrix.’ This program has been accredited for continuing education for CPA’s and has received awards like the:
7th Annual Axiom Business Book Awards “Recognizing and promoting the world’s best business titles.” Listed number 13 under Personal Finance / Retirement Planning / Investing (estate planning, stocks, bonds) is the Silver award: Financial Fitness: The Offense, Defense, and Playing Field of Personal Finance, by Chris Brady and Orrin Woodward (Obstaclés Press)
Perhaps the most important pyramid is found on page 154 in the ‘Financial Fitness,’ book by Chris Brady and Orrin Woodward:
7. Speculative Ventures, Start – ups, Inventions.
6. Stock Market, Real Estate --------------
5. CDS, Money Market, Accounts, Municipal Bonds -
4. Savings, (Both Long – Term and Targeted)
3. Survival Preparation ------------------------
2. Emergency Fund (3 -6 Months of Expenses
1. Yourself --------------------------------------------
Read Theodore Roosevelt’s timeless advice: “Americanism means the virtues of courage, honor, justice, truth, sincerity, and hardihood, the virtues that made America. The things that will destroy America are prosperity – at – any – price, peace – at – any – price, safety – first instead of duty – first, the love of soft living and the get – rich – quick theory of life.” Educating ourselves about pyramids can be effective especially if we want our friends and family to be free from the financial stress they are feeling. All of us would love to experience the hope that comes from believing that dreams can come true again. LIFE Leadership is not a guarantee. It’s an opportunity. It’s what people wanted when they left their families and businesses at the turn of the 19th century and came to America. They didn’t come to the land of entitlements they came to the land of opportunity. God Bless, George Guzzardo