Mercilessly spammed all over the Internet, the gibberish ads beckon suckers into clicking them with the promise of easy money for a negligible amount of work done from the comfort of your own room. Internet veterans have acquired a certain blind spot for them, but newbies might follow the given hyperlink, landing on a homepage with outrageously fake testimonials: “Jessica was homeless and now she makes millions of dollars every week!”.
At this point, even the newbies start to get suspicious, since the website goes to great lengths to avoid mentioning any specifics and uses the vaguest terms possible. Naturally, the answer to what this job actually entails is hidden behind a paywall, so if you would please input your credit card information in this form right here…
Lesson learned
You’ve certainly encountered these infamous advertisements and understand they are based on the idea of multi-level marketing. While there is some minute amount of cash to be gained by clicking ads or liking articles or whatever the case might be, the fastest way to make money is to entice others into joining the club through you, in which case you’ll get the percentage of their earnings.
The problem is that the person on top of the MLM pyramid gets something along the lines of 90% of all profits, while the remaining pitiful share is distributed between all other members within the organization. Though mathematically untenable in the long run, MLM schemes do however utilize a valid business principle, which is extraction of value.
MLM is based upon the fact that people generally trust what their friends recommend. An advertisement blaring from your TV even at triple the volume is easily ignored, but the same idea coming from your third cousin, twice removed, is actually worth considering. In this way, an MLM pyramid extracts value from the social connections its new members have.
Saturating the market
If we examine someone who buys and sells actual physical goods, it again comes down to extraction of value from the market. Let’s say a merchant realizes that people in one city have an unusual craving for strawberries, but the local soil isn’t favorable for their growth. So, he buys strawberries in another city for $1 a piece and sells them for as much as he wants, let’s say $1000 a piece, since he’s the only one satisfying the demand. That is, until others realize there is money to be made in doing the same thing and bring the price down.
Every attempt at extracting value from the market carries with it significant risk – strawberries tend to spoil quickly, the demand may suddenly disappear, crops can be lost to bad weather or pest infestations, the government can introduce a strawberry tax and so on.
On the other hand, MLM schemes are illegal and the most successful MLM organizers tend to eventually end up in jail for committing fraud. In other words, all entrepreneurial attempts require money and effort to be invested before you can even get a shot at earning your investment back, let alone make a profit.
To sum it up, the secret to becoming rich (acquiring wealth) comes down to two principles – minimizing risk and maximizing value extracted. Ironically, this means the secret to becoming rich cannot ever be given or sold to you, because somebody else is already using it and the market is tapped.
You must get an idea nobody thought of before or satisfy a market demand that nobody realizes exists without going into massive financial debt. Also, you should turn a profit before you start investing money into your idea. Is that even possible?
Strategies for thinking
Allow me to introduce you to a book titled “Think and Grow Rich.” Written by Napoleon Hill in 1937 and available for free as part of the public domain in PDF format here, the book asserts that you can become rich by thinking. Napoleon Hill describes this process as actually a bit more complex than the mere process of cognitive association we call “thinking” and says it consists of finding a group of open-minded individuals and freely discussing your ideas with them.
And that’s it – verbalizing your thoughts leads you to realizations of previously untapped sources of opportunity and ways to extract value out of them.
If we examine this process in the context of wealth principles I outlined above, we see that there is absolutely no risk in discussing your ideas with people who are receptive to them and there is no upper limit to the amount of value that can be extracted from your ideas. This process already exists under the label of brainstorming.
In fact, it is exactly what Napoleon Hill describes – a group of open-minded individuals sits at a table and freely verbalizes their ideas in search of a solution to any problem. The ideas are written down and read after the session ends, thus producing a completely novel solution.
The implication behind this book is that we are all under constant self-censorship and don’t dare speak about what we truly think for fear of ridicule. By finding a group of people who do not judge, but instead offer constructive criticism, we arrive at infinite personal wealth.
Does it really work? I can tell you that my greatest periods of personal growth came directly from independently arriving at the same conclusion Napoleon Hill mentions. Whether you want to try it is completely up to you.
Read More: I Will Teach You To Be Rich
