What is the problem?

The desire to "get‐rich‐quick" is rapidly becoming a social problem nationally but specifically in Utah! An uneducated or hastened decision to accept a risk (investment) to "get ahead" financially can have just the opposite effect. According to Wikipedia, a get‐rich‐quick scheme is defined as "a plan to acquire high rates of return for a small investment. Most such schemes promise that participants can obtain this high rate of return with little risk"(wikipedia.org/wiki/get_rich_quick). Get –rich‐quick schemes can be either legal such as investment training software or reselling e‐books on "how to get rich," to quasi‐legal schemes such as MLM’s, to illegal schemes in which Mr. Charles Ponzi , first made famous in the early 1900’s. The Ponzi scheme was the original get‐rich‐quick scheme. Charles Ponzi scammed investors promising a 50% return on their money then used money from other investors to make good on only some accounts allowing most to believe he could do what he said for everyone. Ponzi went from making a reported $250,000 a day to living his last years in poverty (wikipedia.org/wiki/Charles_Ponzi).

Utah is a hotbed of MLM (multi‐level‐marketing) companies offering "income opportunities" to a socially accepting population. As an example if you go to a Utah Jazz game the cheerleaders are "Nu Skin Jazz Dancers," as witnessed right on the official website of the Utah Jazz (NBA.com/Jazz). Nu Skin is a multi‐level marketing company that sells skin care and other health care products along with an "opportunity." Nu Skin products have been highlighted in national magazines such as the December issue of Fitness Magazine and the November issue of Self Magazine (Nuskin.com). This media exposure helps to give public acceptance to products offered by a multi‐level marketing company.

Maybe you would like to enjoy a nice outdoor concert this summer? A few artists scheduled to play at the "Usana Amphitheater" in West Valley, Utah this season are Tim McGraw, Cheap Trick, The Police, John Mayer, Steve Miller Band, Jack Johnson, Sheryl Crow, and the Dave Matthews Band (usana‐amp.com). Usana hosts huge selling recording artists. Certainly they wouldn’t perform at a place that was sponsored by a "get‐rich‐quick" scheme? And most Utahans probably don’t think twice about the "Usana" part of this outdoor concert experience. It’s accepted as a norm in Utah. "Just another multi‐level recruiting and product pushing company who did well for themselves," some may say.

Let’s look at the numbers of currently active MLM companies in Utah by location. In Utah County alone there are at least 25 Active MLM’s. According to the Consumer Awareness Institute that leaves "1 for every 14,741 people, by far the highest density of recruiting MLM’s of any county in the U.S.A. Salt Lake county has at least 15 active MLM’s which equates to 1 for every 59,892 persons and there are at least 4 active MLM’s elsewhere in Utah. This adds up to at least 44 MLM’s in the state of Utah or 1 for every 50,754 persons (as based on the 2000 Census), and is reported as the highest density of MLM’s for any state in the U.S. CAI reports "Approximately, one in five (Utah households) have participated at some time during their lifetime" (Consumer Awareness Institute: Who Profits from Multi‐Level Marketing? Preparers of Utah Tax Returns Have the Answer.pg. 3).

MLM’s aren’t the only get‐rich‐quick schemes in Utah. Using the Google search "get rich quick Utah," returned over 350,000 results. One result was Park City Utah’s official site upon which under their "Crime Prevention for Internet Crimes" page, they dedicate paragraphs to "pyramid schemes" and "gambling." Park City’s pyramid scheme paragraph is as follows:

Another search link revealed a recent story (April 01, 2008) that posted on ConsumerReports.org in which the SEC has filed civil fraud charges against a Utah couple who used infomercials to pedal an expensive stock trading system. The system claimed to "make extraordinary stock profits." The SEC complaint alleges that our entrepreneurial couple made more than $6 million in commissions all the while not turning any profits for clients. A quote listed in the report by SEC Chairman Christopher Cox said "The allegations depict a cold‐hearted scheme that preyed on the elderly, the desperate, and even the unemployed by promising financial security while instead robbing victims blind" (ConsumerRreports.org/money/2008/04/investment_frau.html).

What makes this problem a social problem?

So why is a get‐rich‐quick mentality a problem if obviously some are making their dreams come true and "living large." Most everyone does want to become rich. After all, "Money talks, even in hell" Japanese Proverb (Art of Wealth pg. V). A fascination with money, wealth and material things can be a good thing. It can help drive an economy but if not grounded in solid financial principles, greed may cause a get‐rich‐quick mentality to take hold. If enough people are over stretching their finances, bulking up credit cards, and making exorbitant purchases they can’t afford in an effort to "get ahead", these actions can lead to an economic crunch and a social problem.

"Utah has consistently ranked in the top quarter of states with the highest bankruptcy rates since 1960. In 2002 and 2003, Utah emerged in the top position" (Utah Foundation Report pg. 1). Other factors including education, divorce, job loss, race and socio‐economic class play a part in bankruptcy but we must address the consumer debt that coincides with the get‐rich‐quick mentality. As expressed in the PBS documentary Affluenza, Americans are caught up in a "painful, contagious, socially transmitted condition of overload, debt, anxiety, and waste resulting from the dogged pursuit of more" (Utah Foundation Report pg. 6). Enter the schemer, the "snake‐oil" salesmen, the MLM’s and the miracle products that make outlandish statements and who actually encourage you to "invest" by using your credit cards and you have a social problem. As a side note if you do have a credit card problem may I suggest visiting daveramsey.com or purchasing one of his books. Dave Ramsey is a nationally syndicated radio talk show host and author who specializes in helping people get out of debt.

"Work for only an hour or two a day, and build up a ‘residual income’ that will allow you the ‘time freedom’ to quit your job and spend more time with your family or do whatever you want" (Consumer Awareness Institute Table 2). Well, that sounds pretty good to me. Where do I sign? The problem is most if not all get‐rich‐quick schemes eventually fail. The alarming statistics on pyramid schemes makes me wonder why some are not only legal but traded on the stock exchange. Loss rates for recent no‐product pyramid schemes range from 87.5% to 93.3%. Loss rates from product based MLM’s average 99.9%. "The chance at profiting from a single spin on the roulette wheel at Caesar’s Palace in Las Vegas is 48 times as great" (The Five Red Flags pgs. 15‐16).

Making it big in Real Estate or the Stock Market takes quite a bit of research, due diligence, capital and persistence. That isn’t the get‐rich‐quick way. James J. Cramer, cofounder of The Street.com, Markets Commentator for CNBC, and "Bottom Line" columnist for New York magazine also frequents college campuses on investment tours educating the attendees on investing in the stock market. Mr. Cramer states, "I can get you started but my methods take some time and some effort and, most important, some discipline." Mr. Cramer continues, "You will be rewarded…but not if you don’t do the homework." I don’t draw anything about being quick and easy in what Mr. Cramer puts forth (Real Money, Sane Investing In An Insane World, pg. 7).

Donald Trump didn’t build his Real Estate fortune overnight with "no money down" so what makes everyone think it’s just that easy? "The Donald," originally worked for his father’s company, the Trump Organization which concentrated on middle class apartment housing in Brooklyn, Queens, and Staten Island (Wikipedia.org/wiki/Donald_trump). So, basically the world’s most recognizable name in Real Estate Development started as an apprentice under his dad. Donald Trump’s rise to success isn’t as sexy as going to a "free Real Estate Seminar" and investing in flip properties with "no money down," until you flip yourself into a millionaire, overnight of course.

If everyone got rich quick then it wouldn’t be a problem or it would at worse lead to other interesting social issues. Most people instinctively know that riches don’t happen overnight and without hard work, persistence, and usually capital. "One who expects to reap rewards without expending due effort is not thinking realistically" (Art of Wealth pg. 66). "Wealth may be reliably produced by judicious investment of resources in productive enterprise under suitable conditions; taking a gamble on fortune or luck reflects greed and laziness in the form of wishful thinking" (Art of Wealth pg. 257).

A society inundated with get‐rich‐quick seminars, infomercials, MLM "opportunities" and other devilish scams takes time and energy away from more valuable endeavors. One should be educating themselves on how to build a lasting financial plan and learning how to create long term wealth. Get‐rich‐quick schemes rob victims of more than money. They can rob ones time, motivation and worst of all, ones dignity. False promises, inflated hopes, and broke bank accounts can lead to many other social problems including poverty, drug or alcohol abuse, violence, and family problems. A financial setback can lead to credit problems, bankruptcy, foreclosure, and divorce along with mental and emotional breakdowns. At best, a get‐rich‐quick mentality can lead to a big waste of time.

What do you believe to be the cause of the problem?

What is the attraction? If there is so much to lose why is so much profit being made by the get‐rich‐quick protagonist? And yes, someone is making money. The top 1% of MLM executives can earn boatloads of money, some reported as much as one million a month (Who Profits from Multi‐Level Marketing? Preparers of Utah Tax Returns Have the Answer, pg. 5). As Jim Carey’s character Lloyd Christmas, in Dumb and Dumber optimistically realizes after being told he has a "one in a million chance" of getting the girl, "So, your tellin’ me there’s a chance!" It’s that "chance" that the downtrodden, money hungry, misguided ambitious soles are hoping for when they lay there proverbial futures on the line for the get‐rich‐quick result. I believe it’s almost an out‐of‐body experience. One has to know it’s not a good idea to spend money, time, and effort on promises made by a mountebank? Yet the trend continues.

I personally interviewed a young salesman at a local computer store who made it known he "wanted to be rich" and that he was going to school to "graduate in nanotechnology." I said "great, have you ever tried MLM’s?" He knew the acronym with no explanation and replied "No, but 3 of my friends are in them." Note the vernacular. This salesman looked to be in his burgeoning twenties so from this very limited field research, I deduce the get‐rich‐quick mentality is continuing on to at least some.

But what is the draw? Why do we as Utahans become attracted to or are obsessed with the get‐rich‐quick mentality? The Church of Jesus Christ of Latter Day Saints or LDS, have long been the dominate faith in Utah. It was the mid 1800’s when the first Mormon pioneers began to settle the Salt Lake Valley and their growth in the community over the years has largely shaped the culture of Utah (LDS.org/churchhistory). Many of the church’s innate characteristics like an organized network of families, a strong trust between fellow members, and the practice of sending young men away from home on two year missions is easily exploited by charlatans, counterfeits, and especially MLM’s.

The enormous social network of the LDS church means that once an idea or "opportunity" is put forth somewhere within the network and preferably near the top, the speed at which news can travel is great. LDS faithful like most religions congregate at least once a week and this is an opportunity to share stories and ultimately mix business with service. This network is positive and useful in many ways but also open for exploitation.

Another consequence of such an organized web of followers presents a dichotomy in social classes. Gathering intimately with fellow members on a weekly basis draws contrasts and opinions from the haves (bourgeoisie) and the have‐nots (proletariats). It’s easy to discern those more affluent members and a natural "keeping‐up‐with‐the –Jones’," ensues. This unfavorable attitude can lead directly to unwise financial decisions in a meager attempt to conform. The get‐rich‐quick mentality conveniently follows.

In general, the LDS faithful have established themselves as authentic and honorable members of society. Their close kinship has built up trust levels and those trust levels are also used and abused by frauds. The State of Utah ranked eleventh in fraud complaints to the FTC from January to December 2007 (FTC, Consumer Fraud and Identity Theft Complaint Data, pg. 18). "Utah consumers reported fraud losses totaling more than $1.1 billion; the median monetary loss was $500.00" (FTC, issues Annual List of Top Consumer Complaints, Identity Theft Complaints Again Top the List in Utah, pg. 2).

The practice of sending young men at the age of nineteen to serve a two year mission for the LDS church has surely reaped grand benefits and many convert’s to the LDS crusade. One unintended consequence has been the grooming of now experienced door knocking, ambitious, and gregarious, future MLM salesmen! When the young men return home from their unbeknownst sales "mini-camp," they are eager to start their new beginning in life which would include making an income. Once approached by a "trusted" member of the church or community for an "income opportunity," the combination of naivety, overexcitement and youthful confidence is lethal. Many young men "join" MLM’s fresh off a mission and are initially successfull because of their related recruiting experience but soon learn the percentages of loss. And at what personal loss in the meantime?

Fraud happens everywhere but because of the unique underlying "Faith" structure of Utah’s society it’s easier to be duped, networked, and duped again. This is not the fault of the LDS faithful in my opinion, just an amazing unintended consequence of their success and impact on Utah’s culture.

What is the answer to the get‐rich‐quick mentality?

I believe creating a solution to the get‐rich‐quick mentality is twofold. The first step in combating this social problem is educating Utahans about the incredible loss percentages in MLM’s and get‐rich‐quick schemes. Jon M. Taylor, Ph.D., President of the Consumer Awareness Institute and Director of Pyramid Scheme Alert, has done exhausting research on MLM’s. Dr. Taylor’s work can be dissected and researched at mlm‐thetruth.com. I believe that when the public is faced with the facts on MLM’s their popularity and ultimately their success will decline. Once the level of suspect "opportunities" declines from MLM’s a portion of the get‐rich‐quick mentality should subside.

The second and most complicated approach to curing the get‐rich‐quick mentality is a cultural redefining of success. The current emphasis on wealth and money in today’s culture unchecked by values and decency is troublesome. The television medium hosts such game shows as "Who Wants to Be a Millionaire," and "Deal or No Deal," which feeds the get‐rich‐quick mentality. The constant barrage of lavish celebrity lifestyles through print and television media emphasizes such material items as homes, cars, and designer clothing causing the rest of us to feel inferior and envious. The culture needs change. Albert Einstein said, "Try not to become a man of success, but rather a man of value" (Positive Quotations, pg. 442). Confucius wrote, "Ideal people understand things in terms of duty; lesser people understand things in terms of profit" (Art of Wealth, pg. 115).

A medium which reaches the public such as a magazine, radio program or television show that works to redefine wealth and success is sorely needed. I propose a magazine entitled, "Living Large," which not only promotes fundamental financial principles but also offers a fresh perspective on other success factors such as service to the community, education, and modesty.

I believe through the promotion of new, "Living Large Celebrities," who define successes in life not merely based on the size of their home but by their contributions to society will enlighten and inspire others. This "Living Large Magazine," is becoming an obsession of mine and it’s the reason I’m back in school today. Hopefully with some education, hard work and persistence, "Living Large" will soon become a reality which will work to combat the get‐rich‐quick mentality.

The get‐rich‐quick mentality is a social problem in Utah with provable negative consequences. Through education and a redefining of success, I hope this problem will soon subside. "The richest of riches is intelligence, and the greatest poverty is stupidity" (Art of Wealth, pg. 66).

Note: Bibliography and Sources available upon request. Original Bibliography was submitted to the Proffessor.