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Home » Business And Finance Articles » The Truth About Network Marketing Debunking The Myths

The Truth About Network Marketing: Debunking the Myths

Just as various sorts of business opportunities continue to sprout like mushrooms on a rainy day, so do misconceptions about network marketing abound practically everywhere.

Are you one of those people who get confused as to what network marketing is and what it is not? Let's have a clearer understanding of the concept and the practice by debunking some of the myths behind network marketing.

*MYTH NO. 1: Network Marketing is the same as the Pyramid Scheme.

**FACT NO. 1: Network Marketing is NOT a Pyramid Scheme.

Pyramid schemes are illegal, whereas network marketing is legal.

When you participate in a pyramid scheme, you shell out a certain amount of money for practically nothing. You get no goods or services in exchange for your precious money. Instead, you merely pay for luck or for a chance. Why? Because only the person or persons on top of the pyramid will win.

Practically a gambling scam, a pyramid scheme is merely a venue for transferring funds from the hands of one person to those of another.

In contrast, when you participate in network marketing, you are actually getting involved in a legal business system. In such set-up, real and legal products and/or services are distributed among huge networks of clients or buyers.

*MYTH NO. 2: Network Marketing is the same as the Ponzi Scheme.

**FACT NO. 2: Network Marketing is NOT a Ponzi Scheme.

First, what is a Ponzi scheme? A Ponzi scheme is an investment scheme named after Charles K. Ponzi, who operated such a financial scheme in 1919-1920. In the said scheme, the older members or investors receive their proceeds or profits completely from the funds invested by newer members.

Unlike the pyramid scheme, a Ponzi scheme does not necessarily follow a particular hierarchical system. In fact, only one person or company is in charge of collecting money from new investors. The said collecting agent or agency then uses such fund to award the older investors with the proceeds promised to them.

Thus, when you get involved in a Ponzi scheme, you are actually just helping the collecting agency to pay off the profits it has promised to the older investors. The organizers behind a Ponzi scheme make you believe that you will MAKE MONEY WITH THEM

And here is another random article you might be interested in...

Really Cheap Car Insurance

There are the usual tips for getting really cheap car insurance. You may need to be reminded of these. Then there are the secrets that you haven't heard about. You'll find a few of those here too.

1. Shop around. Call several companies for quotes, starting with those that advertise the lowest prices. be sure to include at least one independent agent, since they can check many companies for you. Use the tips here to make a list of questions to ask them.

2. Raise your deductible to lower your rates. If you really can't afford the first $500 of an accident, you should rearrange your financial life. After all, you're going to find away to afford more than that over time, on higher premiums.

3. Consider dropping collision. Why pay for it if the car is worth $1000? All you'll get is $1000. The rule is: drop the collision if you can afford the loss. You can't drop it if you owe on the car. However, if the car is worth only a couple thousand and you still owe a little on it, get a personal loan to pay off the car loan, drop the collision coverage, and the savings on the insurance may almost make the payments.

4. Round down your distance to work. You are charged more if you drive farther to work, so be sure to give the shortest distance on the application. Fifteen miles is a common cut-off, at which point you start to pay more.

5. Demand the legal minimums. Do this if you have no assets. Most companies will try to sell you their "company-recommended minimums" on liability, but you may not need that much coverage. Remember, if you are broke, you are not an attractive target for a lawsuit.

6. Get any discounts you are eligible for. Ask about any "safe driver" non-smoker" or other special discounts.

7. Home and auto discounts. See if there is a discount if you insure car and home with the same company. This can often save you a lot.

8. Pay for 6 months at a time. Don't take the easy monthly payment option. They always charge you more for that. Learn to budget and you not only get really cheap car insurance, but everything else is cheaper too.

9. Review your policy. Have your policy reviewed and get new quotes every year or so. If the speeding ticket you had is now past the three year mark (or whatever the company thinks is important) they won't automatically drop the rate, so ask.

10. Consider the insurance costs when buying a car. Sports cars and others are charged higher rates. This isn't a one time charge. You'll pay more for as long as you own the car.

11. Keep policy current. I went without a car for a while, and let the policy lapse because I didn't need it, and there wasn't enough time left on it to request a refund. When I bought a car again, the cost for a six-month liability policy went from $167 to $400 because of my lapsed policy. Keep the policy active if you will be buying again soon, or cancel it, but don't let it lapse.

12. Get paid for diminished value. If you have an accident, be sure the insurance pays what it should. "Diminished value" is often not paid unless you push the point, even though a car loses value from being in a wreck, even after it is repaired.

13. Remove kids from policy. If the kids are at a college that's more than 100 miles away, you can have them taken off the insurance policy and save a lot of money. You can't let them drive the car when they come home to visit though.

14. Get older. Rates drop, especially after 25 years old, so get new quotes now and then as you get older. They may not adjust your rate automatically. Old safe drivers can get really cheap car insurance.