I'll Have My Leggings With a Side of Ponzi, Please!
The chatter on the internet among the disgruntled current and former LuLaReps is that LuLaRoe is nothing but a plain old, run of the mill Ponzi scheme. I understand that throwing the term "Ponzi" around can get some of the hard hitting LuLatics' bedazzled booties in a little bit of a panty ruche. Luckily for them... I come with a slew of screenshots to support my slander...er...libel...er...TRUTH! Telling the public- the potential LuLaVictims that this company will take your $5,000+ investment and then ask you for more and more- IS the truth.
(((Cue the fanfare music))) Ohhh Honey Chile, mama's got the screen shots... Now, listen, before anyone sends me death threats...again... let me disclose where they came from. I didn't infiltrate your groups. I didn't pose as a consultant. I WAS a consultant. But just so there's no conflict of interest here, I won't post the screen shots from my own upline's and mentor's groups. I'll just post the ones that were sent to me by some of the folks you soulless vermin took money from. Shhh... it's ok. Go get another glass of Kool-aid and come on back. (((Pats the sofa next to me))) I'm going to tell you a story now. Remember how a month or so ago, you all went a little crazy about how it's illegal to post your bonus checks in your groups? Home office sent the mentors and the leaders an immediate direction to pull all those posts down from their pages. And so you did. But that didn't stop some of you, did it? I remember seeing a video in my own group that the uplines were given directions to only share the bonus incentive potential in private messages. Not- don't share them AT ALL. It was it's illegal to share them, so just make sure you're doing it privately. Yeah... I've got that one recorded too. :* So in response to that, a few women got a little riled up because I used the word Ponzi in a comment on my facebook page. Let me help you out here a little. The highlighted text will be my own addition, for the record: From Wikipedia: A Ponzi scheme (/ˈpɒn.zi/; also a Ponzi game)[1] is a fraudulent investment operation where the operator, an individual or organization (LLR) pays returns to its investors(Mentors and Uplines) from new capital paid to the operators (Uplines) by new investors(Quebies aka new enrollees) rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns (check out the LuLaRoe provided investment return example sheet) that are either abnormally high or unusually consistent.Ponzi schemes occasionally begin as legitimate businesses, until the business fails to achieve the returns expected. The business becomes a Ponzi scheme if it then continues under fraudulent terms. Whatever the initial situation, the perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.[2](Buy more, sell more! Be all in!) When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons: [2]The promoter vanishes, taking all the remaining investment money.Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, (How many of you are still waiting for your return checks?) similar to a bank run.External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds. And here's the comparison between a Ponzi and a Pyramid and WHY this is not a Pyramid: (Wikipedia) A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes: [2]In a Ponzi scheme, the schemer acts as a "hub" for the victims, interacting with all of them directly.(Mentor groups) In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.) (This isn't the case for participants. You sell clothing to make your money- you want the big bucks- you recruit a massive team...Hellooooo Ponzi.)
A Ponzi scheme claims to rely on some esoteric investment approach and often attracts well-to-do investors, whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments. (This is interesting, because it seems the lower on the pole are participating in a pyramid because they are just selling product, but the mentors, leaders, and trainers would be operating a Ponzi)
[8]A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. (LuLaRoe would be a pyramid if it didn't keep pushing people to reinvest, buy more, etc) By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, (See? This system is set up to eventually implode. All the little guys will go out of business with the die hard or the higher ups reinvesting and being the main source of the product. The big guys can afford to continuously reinvest, and you little guys just do what you can until you're broke or bankrupt. Your parting favor? A nice little note from your upline about how much you suck and you failed because you didn't go all in.)with a relatively small number of new participants. So, while Marky Mark is pimping his MacLaren, and DeAnne is pumping around in her Choos or Blahniks, how are you, the little guy doing? THIS IS why I called it a Ponzi scheme. So now for the evidence to my claims: (We just watched Moana... I feel inclined to scream out YOU'RE WELCOME!!!) These are just a few very recent examples:
Still don't believe me? Stay tuned. You know... here's another word... Cult. I thought that the reason we don't talk about Fight Club is because there is no fight club. So... If we don't call it a cult, it's not? Is that the mentality? Because I have seen people be completely shunned. Pushed out, because they chose not to go with the flow. Ask questions. Their "friends" deleted them. Their uplines walked away. Is that not a cult? Is this not the same group that when I signed on told us to stay away from anyone that would challenge the culture? Doesn't that sound a little like Scientology? I smell a future blog.