There are a lot of scams out there, both online and offline. One of the industries that is filled with scams is the “earn extra income” industry. You’ve seen the ads on late-night infomercials: the person selling a “get rich quick program” while sitting on a yacht, leaning on their Porsche or in front of their mansion. So how do you protect yourself from scams and still get the information you need to earn extra income?
“Run Away From People Marketing With Porsches”
(or Ferraris, yachts, mansions, airplanes, fake earning reports, etc)
Yes, I know, this sounds like a “Warren Buffet-ism”.
This kind of “proof” of a program’s success that you would see in late night infomercials is almost always untrue. Basically, these marketers are trying to sell you their “get rich” programs so you can buy a Porsche, Ferrari, or Lamborghini if you follow their instructions.
Think about it for a minute: why are they showing you the images of conspicuous consumption? They’re trying to get you to associate their program with your ability to purchase a luxury good. Does that conspicuous consumption actually help you? Do they actually own all of those luxury items in their videos? Or are they just stage props rented for the commercial?
“Success” in America has worked itself into displays of conspicuous consumption. It has permeated social media and fosters this competitive lifestyle comparison that essentially destroys wealth. If you haven’t already, read The Millionaire Next Door. Learn how to quickly spot a UAW (under-accumulator of wealth).
Selling an “earn extra income” course is just like any other business. You have to develop the course, and then market the course. You have advertising expense, marketing expenses, and sales person commissions. All of these overhead expenses tend to inflate the actual cost of the program. Additionally, it is difficult to sell these types of “get rich” courses, and it requires huge commissions to be paid to the sales force.
Historically, difficult-to-sell items with high commissions attract a certain (low) quality of salesperson, and fosters a certain type of corporate culture (high-pressure sales). Here are some tips:
Take your time to analyze the opportunity.
Scams typically have high-pressure sales tactics. Once the scammer gets your email address or telephone number, they are relentless in hounding you to make their sale.
There is typically a time limit, and you have to “act now” or “miss out on this great opportunity”.
Try before you buy.
Low- or no-value programs typically will not allow you to see “under the hood” before you purchase the program.
They are typically marketed as a “super-secret” method that cannot be exposed unless you pay first.
Ask for details.
Scams typically are very light on the program details, as those details would most likely stop you from purchasing the program.
These scams are heavy on showing you luxury goods, and light on revealing the actual work required to you get there.
Use common sense.
Nothing is easy. All true money-making opportunities and businesses require hard work, planning, and follow through.
If I ever found an income opportunity that required no work and no risk, I would definitely never, ever, ever, sell it to someone else.
Get a Second Opinion
If a doctor said that they needed to remove your hand, you would get a second opinion first. Use the same tactic here. Get an UNRELATED third party to give you their opinion about the product. Do this outside of the sales area, in a no-pressure environment.
Fortunately, these old-style infomercial-type scams with the guy leaning on the Porsche are easy to spot. Unfortunately, the advent of social media and easy internet access for all has created a new type of “marketing with Porsches”.
In the online world, the old type of fake “proof” has transformed into “social proof” that fraudsters now use to sell low-value or nonexistent-value products.
What is Social Proof?
Online, you can literally create anything. With a little bit of design experience you can fabricate almost any outcome. “Social proof” is a psychological and social phenomenon where people try to copy what others do, to get a desired similar result.
This is also observed in comments and reviews, where positive (or negative) statements made by multiple people are given more “value” than statements from one source. This is also called the the “Multiple Source Effect”.
Unfortunately, in the digital world, this is easy to manipulate. An unscrupulous marketer could create multiple different online personas to positively rate or review a product they are trying to sell. Fiverr even has people who will make video testimonials for your product.
Just hire enough of them and you have an army of positive comments and reviews from seemingly unrelated sources.
See the first rule. (Just kidding and enough with the Warren Buffet references.)
The second rule to protect yourself from scams is to approach everything with the classic concept of “trust but verify”.
I actually change the classic a bit and reverse it to read “verify first, and then trust”. I also repeat “verification before trust” per deal, so I don’t get caught by a “loss leader” (a fraudster suckering you in first by fulfilling the agreement, setting you up for the “big rip-off” later).
It’s unfortunate that some people will choose to trade their integrity for a commission.
Hopefully these tips will help you avoid scams and protect your hard-earned capital moving forward. You can’t avoid them all, and you will get caught every now and again.
The goal is to learn from others’ mistakes, and to really learn from your own.