Imagine a party, where people get together to gather with friends and to network. At a big enough event, you’ll always find stereotypical people. There’s the guy that’s a shameless self-promoter, talking about all the money he’s making, how much he can bench, and the horsepower of his new truck. There’s also going to be another kind of person—a clever, interesting yet engaging person (if there isn’t, just leave the party) that listens to people but lends enough of his own personality to the conversation to allow him to steer the topic in whatever direction he wants. This is the person that people speak well of, and is the most effective communicator.

Until recently, when small businesses wanted to make themselves known, they had to be like the self-promoting jerk at the aforementioned party, rattling off their accomplishments and features (But wait! There’s more!) Now, with the increased use of social media, it’s possible for small businesses to be engaged in a conversation with clients, regular and potential. They can build a reputation for themselves in their community, and let their customers do some of the work for them. Mashable writer Samuel Axon’s post, “How Small Businesses Are Using Social Media For Real Results”, highlights different ways to use social media to the advantage of any given small business.

It’s Here To Stay

Social media isn’t going away, and it’s not an optional force, either. Angie’s list, Yelp and Twitter are all platforms that allow users to complain or praise any given good or service, whether or not the business likes it or not. Axon writes in his post that small businesses have to be acutely aware of what people are saying about them through social media in order to intercept (and hopefully explain) negative reviews, and to interact with and encourage positive reviewers.

It’s Cheaper

Axon mentions an example of Broadway shows with limited marketing budgets that encouraged twitter users to share their opinion about the show to their followers. Their exposure increased exponentially when people with large followings (especially celebrities) talked positively about the show. Recommendations from third parties are the cheapest (usually free) and most effective ways to market something. As an added bonus, they have the potential to reach people that would have never been reached with traditional media.

It Takes Getting Used To

As beneficial as social media may be, it’s not an easy sell to people who are used to controlling their business image. Micromanagers of the world tremble at the sound of “yelp”. Regardless, there will be people that have mean things to say about you. It’s the reason the Mr. I-can-bench-three-hundred-pounds won’t let anyone else get a word in: They might take the spotlight off of him, or worse, expose him to be a charlatan. However, if your business model involves more than keeping up appearances, engaging customers is extremely beneficial.

It’s Profitable

In this new world of social media, loyalty is the new currency. Difficult as it may be to measure, ensuring that you have an active, dedicated base of customers will pay dividends in the long run. Joe Johnston, owner of Liberty Market writes:

“People ask me if we have ‘made money’ with Twitter. Absolutely yes. But not how most business think. We have solidified loyalty and have our name out there, front of mind. Because of that, many social media meetups use our place. Patience! One has to believe that increased loyalty and awareness are a key to business growth.”

Small businesses, get to know your customers. People appreciate that. If you’ve got a good product or service, people will hear about you. Be that cool guy at the party– the effective communicator is the one that lets others carry his message for him.

Prov 27: 2 Let another praise you, and not your own mouth; A stranger, and not your own lips.

Ever since my first post, where I outlined my attempt to make some side money blogging (ha!), I’ve talked a lot about the internet, and how a paradigm shift is required when interacting on it (especially through blogging).

Firstly, I wanted to learn what the most successful bloggers were writing about. I learned that they were acting as filters to springs, and not as wells. The big A-HA moment when I checked out the Alexa top 100 ranking websites for the US (this was way back when MySpace was near the top of the list… wow. DATED). In the bit world (data), it’s all about networks, and facilitating connections between things in the atomic (physical) world.

Later on, after more investigation, I realized that I shouldn’t be too attached to my blog (judging by my post frequency that’s not an issue), since it’s USUALLY simply a means to an end. People read my blog to get to the specific information they’re looking for. I finally got a confirmation when Yahoo posted a news story about them becoming a “starting point”.

Based on what I learned, I started writing posts without the expectation that people haven’t read previous posts (Seth Godin I ain’t). I figured that if I became a data collector, I’d have more success, so I wrote bios on specific companies, by poring over forums and sharing details about the company.

So far, I’m confirming everything I’ve written so far. Another look at Alexa’s top 20 websites for the U.S. has the first 18 places taken by the dot-connectors of the web (search engines, social media sites, and marketplace sites). CNN takes 18th place, and ESPN at 20th.

There’s still a WHOLE lot to learn about the virtual universe, and how to be an effective presence in it. As I learn, I hope to share it here.

I’ll keep you posted.

As I’ve stated before, I’m a bum. However, I’m also a capitalist, and that side of me is really mad over the whole health care debate. At the risk of sounding “so 2009”, here to post a rant on the topic is my alter ego.

I’m absolutely LIVID over the people that expect the government to take care of all their needs, and not charge a dime for it. Can you even spell TNSTAAFL (There’s No Such Thing As A Free Lunch)? These expenses come back in the form of higher taxes or inflation.

The good old days, when people knew what things cost.

What’s the government for, anyway? Is it to govern, or to be a nanny for the American people? Unfortunately, the pacifier is in, and there ain’t no way to spit it out.

Also, health care… It’s a RIGHT? REALLY? Then, if I were a Doctor, my job should count as a CIVIC DUTY, like serving on a jury. Life, liberty and the pursuit of happiness are rights… A right isn’t something that I’m obligated to take under penalty of fines, or even jail time (For NOT having something? Is that even constitutional?)

Yes, we need reform. But the reform has to get rid of this UNHOLY MARRIAGE between the government and the health care industry. States impose ridiculous mandates on health care insurance. Look at this insanity – In certain states, insurance providers HAVE to offer things like hair prosthesis, breast reduction surgery and even circumcision?! WHY?

AND ONE MORE THING, what’s so bad about pre-existing conditions? If you’re unhealthy, you pay a higher premium, period. It’s the same reason why red sports cars cost more to insure – they’re a risk. Enacting smart legislation, like removing tax incentives for getting insurance through your employer (can you imagine homeowners insurance through your employer?), and allowing insurance companies to compete across state lines will help bring costs down. Getting the federal government to run health care is a joke.

Educate yourself. Watch this awesome special by John Stossel, read up on the Cato Institute’s literature.

The March cover story of Wired Magazine highlighted the changing nature of money, and how certain companies are adapting. The article followed the progress of PayPal, and the development of their latest project, X.com. PayPal released their API (application programming interface), for programmers to use PayPal in new, creative ways.

It’s going to be awesome, and the implications are huge.

Wired writes:

Peter Thiel, PayPal’s cofounder and a die-hard libertarian, launched the company as a means of creating a stateless monetary system, making it possible for anyone to switch, instantly and easily, between global currencies. “PayPal will give citizens worldwide more direct control over their currencies than they’ve ever had before,” he told new employees in 1999, according to the book The PayPal Wars. “It will be nearly impossible for corrupt governments to steal wealth from their people.”

The dollar is inflating, gold is on the rise, and soon investors will be looking for more secure places to park their money. Second Life, Facebook and World of Warcraft all have their own currencies (some pegged to the dollar, others aren’t), and every year they see more use. With the simplification of money transfers through companies like PayPal, I think we may one step closer to a dollar-less society. However, that doesn’t necessarily imply a one-world currency—it implies a wide variety of currencies that can be converted easily from one to the other. This will remove the stranglehold federal governments have on commerce (it’s currently illegal to make business transactions with any currency in this country other than Federal Reserve notes ), and make international trade flow more easily.

These new forms of transactions may in the future create a war between the established credit card companies and the myriad of start-ups (banks and card companies handle $3.2 trillion every year). The floodgates have already opened, and innovative entrepreneurs will learn to stay one step ahead of the old, lumbering financial institutions.

Looking (and speculating) even further, I’m completely for a digital currency revolution. Forget wallets, let’s pay with our bills with cell phones and ipods. After all, money is really just a placeholder for ACTUAL wealth. Who cares what form it’s in?! Let companies create their own currencies that are pegged to gold, platinum, or the price of wheat. I’m sick of credit card companies changing percentage rates, tacking on ridiculous fees, and being regulated by a congress that needs to be regulated itself.

From shells to coins to paper, money has certainly come a long way. We shouldn’t stop its advance.

By definition, a Ponzi scheme is a fraudulent operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Charles Ponzi’s front was stamps: he claimed that he was buying postal reply coupons overseas, then redeeming them stateside, taking advantage of the difference in exchange rate.

Since the days of ol’ Charlie himself, schemers have been trying to tweak the classic Ponzi formula to make it as successful as possible. There are countless flavors of the scheme, and every one of them has its unique advantage. If you’re thinking about starting your own Ponzi scheme (you shouldn’t, since it’s illegal), here are a few ideas to get you started.

If you're not rich, its because you're in sin. - God

---

1) Get God in on it

God wants you to get rich. He wants you to put up “seed money”, so that you can later “reap a hundredfold”.

Welcome to the prosperity gospel, and the schemers that live off of it.

In the 90’s, when big hair and big money went along like Jerry and George, Tampa-based Greater Ministries was busy convincing members that God wanted them in Ferraris. Their leader, Patrick Henry Talbert, would use Bible verses to explain that God was going to double the money that they gave to the organization.

“The Bible tells us about the end-times transfer of wealth”, Talbert said. “… God teaches all through the Scriptures that in the last days he’s going to take all those people that stole from you, the heathen, and give it back to the righteous… . We’ve given out over $500 million.”

Apparently that’s how the Almighty rolls.

Why it works:

It’s easier to penetrate networks that already have an established hierarchy, like a church. Dupe the leader (or be the leader), and the rest are easy pickings.

The best part about mixing religion and get-rich-quick schemes is the cover. If you’re being investigated, it’s religious persecution (the SEC hates Jesus!). If you have doubts about the company, it’s because you lack faith. There’s really no downside to making sure that God is in on the game, except the possible exclusion of intelligent investors. But you wouldn’t want them, anyway.

Is it really illegal if I'm in charge?

2) Work with Authorities

Keep your friends close, but your enemies closer. –Bernie Madoff

Over the course of 30 years, Bernard Madoff ran the largest Ponzi Scheme in history. He used his investment firm, Bernard L. Madoff Investment Securities LLC to bilk investors out of 65 billion dollars. While running his scheme, he acted as the Chairman of the NASDAQ, and sat on the Board of Directors of the Securities Industry Association.

Another case involved the government of Albania. After the fall of dictator Enver Hoxa, the Albanian free market grew unregulated, and the uneducated investors were suckered by Ponzi schemers. Although the government never endorsed these fraudulent companies outright, their elected officials did. Even the Prime Minister of Albania got in on the action, investing his own money in the high-yield schemes. Eventually, it collapsed and brought about widespread rioting in 1996-97.

The silver lining to the story is that the various Ponzi schemes raked in about 2 billion dollars (a third of Albania’s GDP).

Over all, it was a good run for the schemers.

Why it works:

Like the fake buildings on movie sets, Ponzi schemes are all about setting up a good front. The air of respectability that a government official or agency can lend to any company is substantial. Most importantly, working with authorities gives the schemer the ability to fly under the radar and avoid getting busted.

So many countries, so many hiding places.

3) Work Internationally

Swiss Mutual Fund is a company that promises investors returns of up to 300% within 15 months of investment. It’s based in Dominica, it’s popular in Malaysia, has contact information that points to New Jersey, and has no ties to Switzerland. They claimed to have a rich history, involving Switzerland, France and pre-war aristocracy. However, their bogus history was shut down by an official statement by the Swiss Embassy in Malaysia.

Why it works:

Working internationally is a fantastic addition to any Ponzi scheme. Here’s why:

• It’s exotic. Gold mines in Nigeria and holding firms in London impress potential clients with the global scope of the company.
• It’s never about you. An international base provides the schemer with a very effective scapegoat. They can say things like, “I’m sorry the money hasn’t arrived, it’s tied up in Lisbon”, or “Our assets in Johannesburg have been frozen by the local government. Due to this, we can’t pay investors anything this month”.
• You’re not responsible. Having yourself disassociated from any countries’ government allows you to leave the responsibility of disclosing tax information squarely on the shoulders of the investor.

I'm really a great guy.

4) Develop a cult of personality

Quick, who’s the CEO of Coca Cola? What about Chevrolet? And HP?

How about the names Ponzi, Madoff, and Rothstein? Ring a bell?

When you’re running a Ponzi scheme, you have to make sure that people remember your person, not your company. You want your company to be vague and complicated (I’m selling tracts of land in Florida at a 200% markup, but don’t ask me how I do it), but your persona to be charming, smart and engaging. Surround yourself with people that think the world of you, and if they invest in your scheme, make sure you pay them nicely. They’ll take care of marketing for you.

Why it works:

It’s a confidence game! You have to give your “investors” something to trust, and if it isn’t your company, it’s got to be you. Strongly attaching a person with the “product” makes it seem more accessible, more personal. If you can spread rumors about your spotless character, it’ll translate over to your investments (He’s such a righteous man, he couldn’t be scamming me. His 30% returns every month must be due to his brilliance). This is why scammers and clergy mix so well (see point one).

Psst! Wanna buy in?

5) Make cashing out tough.

One of the Ponzi scheme “Red Flags” listed by the SEC is difficulty receiving payments.

“Be suspicious if you don’t receive a payment or have difficulty cashing out your investment. Keep in mind that Ponzi scheme promoters sometimes encourage participants to “roll over” promised payments by offering even higher investment returns.”

They mention this because it’s ridiculously effective for Ponzi schemers. Make sure to tack on fees and waiting periods to the withdrawal process. Also, if the front of your Ponzi scheme is a financial institution, treat investments like Certificates of Deposit, which frequently have a 6-month “lock-in” period, where investors can’t take their money out.

Why it works:

The more money you keep, the easier it is to pay out to investors when they ask for their money. Ponzi made sure to have enough cash on hand to finance three runs on his company.

The second benefit to making cashing out tough is the secondary market that crops up. Since investors want to get their money out, they’ll get new investors to pay them cash, then transfer their funds internally to the new investor’s account. This keeps everything off the books, and the first investor’s funds safely with you.

Sign Up Three and Get Yours Free!

That’s the basic pitch for WOW Mobile, a company that resells phone service through T-Mobile and AT&T, and offers an all-you-can-eat package (text, phone and web) for $89.99. The basic premise is “sign up three and get yours free”. In other words, by signing up three people with the WOW Mobile service, your monthly phone bill comes out to zero dollars.

The recruiting, promoting and selling of WOW Mobile service and phones are done by independent representatives. Because of this, it’s ridiculously difficult to get objective information on the company. Everyone wants to pitch the product and close a sale, without providing deep information about the history, technology or business of WOW Mobile. This post will attempt to address these issues, and may most likely change and grow as more and better information comes my way.

First of all, hats off to Troy Dooley and his MLMHelpDesk site. People seem to have gone there to get and leave info on WOW Mobile, and Troy has done an excellent job moderating the conversation and posting relevant information. Most of my information comes from poring over the hundreds of comments that have been left there. It seems like certain people (“Karla”, “Rick” and “Steve”) seem to be like official WOW Mobile employees, since they seem to have access to very technical information, and appear to have close contact with WOW Mobile’s founder, Randy Jeffers.

Don’t take my word for it, though. Read for yourself.

History:

Wow Mobile is a division of Liberty International, a company started by Randy Jeffers. Liberty International resells everything from Dish Network to dog food, and they’re apparently applying the same model for cell phones. They also have a VOIP (Voice over Internet Protocol) division called Global FREEdom.

WOW Mobile is a virtual company. They don’t have a physical address, and appear to work out of a P.O. Box. However, it isn’t necessarily something to be alarmed about, since it isn’t uncommon for a company to outsource all of its functions, and be without a need of a physical space.

The i7500, in all its touchscreen glory

The Product:

WOW Mobile is in the repackaging business, buying data and voice wholesale from companies like T-Mobile and AT&T (especially T-Mobile). Ultimately, they want to only use the cell service’s data network, but are right now using a combination of voice and data because of problems rolling out with VOIP, which is currently in Beta and only available to certain representatives. WOW Mobile also offers the capability to connect over WiFi and WiMax. Apparently, they use the Sipdroid application to rout incoming and outgoing calls through Liberty International’s Global FREEdom VOIP network.

WOW Mobile phones are Android phones. This allows programmers to upload plugins with unique features, like wireless tethering (it makes your cell phone a hotspot).

Until last month, WOW Mobile was offering several phones– the HTC G1, the MyTouch, and the Motorola Clic. However, since the beginning of March, they are only offering the Samsung I-7500 Galaxy.

According to their website, there is only one plan with WOW Mobile: $89.99, everything included (voice, text, data.) There are no data caps, so feel free to download to your hearts content.

The Business:

As mentioned before, WOW Mobile’s business model relies wholly on independent representatives (IRs). The commissions are based off of a point system that then translates to dollars (6000 points = $50). You earn points for signing up customers, and more points for signing up representatives. In the webinar link below, the narrator is quick to point out that WOW Mobile is not a Multi-Level company, but one that works with straight commission.

Their commission structure is designed to encourage continual recruiting. The growth of your “downline” must be fairly even, with a maximum of 2/3 of your point revenue coming from any particular recruit. In other words, the “legs” of your business must be balanced in order to receive points. This prevents an IR from receiving large amounts of commission because he or she happened to sign up ONE key person.

Representatives have the options to buy more than one “business center”, in order to maximize potential profit. IRs can sign up people and place them under a business center. Currently IRs can buy one, three or seven business centers.

In the future I’d like to flesh out the compensation plan out a little better in writing, but for now I’ll leave a link to a webinar that details everything nicely.

Download from MediaFire.

http://www.mediafire.com/file/nnjicjjmwyw

Updates:

As of mid-March 2010, an internal email circulated stating that WOW Mobile Independent Representatives are not allowed to mention T-Mobile or Samsung in their promotional material. This may be due to the fact that WOW Mobile doesn’t deal exclusively with T-Mobile, but with a range of Tier 1 cellular providers (possibly including Sprint in the near future).

Finanzas Forex, TIRN... I've seen this movie before, haven't I?

Investment firm springs up out of nowhere.
Investment firm has innovative, fast-and-loose strategy.
Investment firm posts record profits.
You invest.
Investment firm is being harassed by big bad government agencies.
Investment firm has to hold on to your money until this mess can get all cleared up.

If this sounds familiar, it’s because you’ve either invested in Finanzas Forex or TIRN. Finanzas Forex is being sued for libel by DWB Marketing, and by Crowne Gold, inc over contract issues. For TIRN, the bad guys are the Securities and Exchange Commission. They’re set to go to court with David Merrick soon, charging him with operating a Ponzi scheme (if you get a chance to read all of the documentation, do it. It’s a good read).

But I’d hate to jump to conclusions. Let’s analyze this from both a pessimistic and optimistic point of view.

Optimistic:

FFx and TIRN are victims of bad timing and poor management. They didn’t get the licenses they needed to operate in the United States, and they’re being busted because of the national paranoia that Bernie Madoff and other REAL Ponzi  schemers have caused. The SEC has shifted into overdrive, and innovative risk-takers like FFx and TIRN are paying for it.

Verdict: Things will sort themselves out. Justice will prevail, and these noble companies will once again continue to churn out profits for us.

Pessimistic:

Let’s be honest. Both companies are mad shady. TIRN’s bank activity didn’t show any trading going on while it was operational, and FFx has never posted real trade information on it’s shabby website. Plus, FFx has a really stupid security feature. Both companies had an “unofficial” way to put money into the company (paying cash to other customers for them to transfer funds into your account), and both  have jumped to create other alter egos (TIRN is now PMR, and FFx is pfplace.com) as soon as their money got frozen.

Verdict: Consider the money you invested a tuition payment to the School of Hard Knocks.

Positive or negative, your response to the situation can be nothing but passive. You either have to wait for the best, or forget about it and put it behind you. It’s a powerless situation to be in if you happen to have funds tied up in one of these companies (like me). Nevertheless, if we use this chance to learn and grow, we’ll at least have something to show in the end. But this is only possible if we share information.

With that in mind, do you have an “inside scoop” on what’s going on at Finanzas Forex or TIRN? Perhaps a link to obscure, overlooked information? Please leave a comment and share it!

I’ve updated to Wordpress recently, and it’s been the most destructive thing I’ve done to this site so far.

Well, kind of.

The thing is, with blogger, the site was organized in a specific way. Google had my old links up, and i’d get a 404 error message someone would click the link (searches for “Finanzas Forex” would drive a lot of traffic to my site). Hopefully that will be resolved soon, and Google will put my updated links up.

Even more hopefully, I’ll post something new. There have been some interesting developments in different forex companies (notably FFx and TIRN), but the legwork required to do a quality post has had me avoiding it.

Along the journey of yours truly, the Capitalist Bum, I’ve come across some interesting characters. Abel Mesa of La Promesa Corporation, German Cardona of Finanzas Forex, and Paul Orberson of Fortune Hi-Tech Marketing. All of these seem to be people that singlehandedly pulled up a company by its bootstraps and rode it to the top through Multi-Level Marketing goodness.

Now it’s time for a new Condender: David Merrick.
A Wikipedia search for Mr. Merrick revealed that he is a dead Tony-Award winning theatrical producer. Clearly this isn’t the man I’m looking for.

The other David Merrick is the founder and CEO of the Traders International Returns Network. They are similar to Finanzas Forex, in that they both trade on the Foreign Exchange market, and both are registered in Panama. According to the flash animation on their homepage, TIRN trades on the Forex market, commidities, financial instruments, precious metals, and retail investments.

Judging by their web presence, TIRN certainly seems to be up-and-coming company. They have a twitter feed (but don’t seem to be doing anything with it), and their website is chock-full of rss readers that display the most current investment-news charts and graphs.

On the business end, they seem to be fast. Deposits and withdrawls are quick, taking about one business day to process (take that, Finanzas Forex!), and debit cards from the company are sent promptly. Like FFx, you make money from the investments of people on your downline, with a 5% initial payment, then a small residual payment per month.
Here’s their Return on Investment breakdown:

$500 – $999 = 9% return per month
$1,000 – 3,999 = 11% return per month
$4,000 – $9,999 = 14% return per month
$10,000 – $ 24,999 = 17% return per month
$25,000 – $49,999 = 19% return per month
$50,000 = 21% return per month
Minimum investment: $500
Maximum investment: $50,000
Add 1% if the investment is maintained for 6 months.

However, TIRN does have a shady side: The Comision Nacional de Valores of Panama (their version of the SEC) put out a document stating that TIRN has no licence to operate in Panama, and are not regulated by anyone. One of the conditions of signing up for TIRN is that you not speak negatively of them online, or your account may be terminated.

I’ll edit this post as I get more information, but my prospect for TIRN is the same as Finanzas Forex. Scam or not, I know that there is money being made. If I invest sometime in the future (I currently find myself penniless), I’ll use only the money that I can afford to lose.