People tend to measure success in monetary terms. Financial success is, however, just one component of success. If it is achieved through greed (an excessive and selfish desire to acquire or possess more than what one deserves) it normally have negative consequences. This especially occurs when a person focuses on short-term gain at all cost – even if it involves “shady” or illegal actions. This article highlights the danger of uncontrolled greed for short-term gain and the potential long-term failure that often goes hand-in-hand with it.

The discussion is done under the following headings:

* Typical greedy behaviour;
* Perceived benefits;
* Reasons for failure;
* Consequences of failure.

Typical Greedy Behaviour

People that are controlled by their greed tend to go for the quick kill and try to make much more money in relation to the value that they add. They always look for short cuts. Some of their typical behavioural traits include the following:

* They embark on transactions that are too good to be true – they do this either as (foolish) investors or with transactions that promises phenomenal returns where they try to lure (foolish and greedy) investors.
* They take no or little risks compare to other people and investors – they often look for outside people (family, friends, rich people, etc.) to invest in their schemes.
* They charge very high gross margins – they often try to make a quick buck through very high gross margins that they charge to the unexpecting client.
* They are dishonest – they tend to lie and be dishonest in varying degrees. This includes websites that makes false claims, bribery of officials and other parties as well as many other types of fraudulent transactions.
* They tend to be very smooth – they try to win people over with their charm (not genuine), claimed religious beliefs (that have nothing to do with the transaction) and appearance of success (e.g. clothing, cars, secretaries, offices, etc.).

Perceived Benefits

The greedy person often sees many short-term benefits in bending the rules in business a little or even being outright dishonest or acting illegally. Some of the perceived benefits are:

* Financial independence – many people see this as the major aim in life regardless of anything else.
* Image – many people like to impress other people and believe that they can do this through the things they can buy with money.
* Respect – people believe that other people will see them as successful and respect them if they are financially well off.
* Social – people often see themselves as more socially acceptable when they have money.
* Marketability – some people believe they are more marketable if they have money.
* Success – many people equates money (irrespective of how they got it) as the measure of success.
* Instant gratification – many people are not prepared to work hard, honest and clever and delay their gratification. They prefer to enjoy everything that life has to offer when they want it and they will do (almost) everything to achieve it.

Reasons for Failure

Greed (and dishonesty) is generally not sustainable. People are caught out due to several reasons including the following:

* People see through them – it is not possible to fool all the people all the time. People will eventually see through dishonest people and then ignore them or expose them. Once a person has made a name for himself / herself as being dishonest it became more difficult to do business.
* Mistakes – it is not easy to remember lies in detail and to cover all the (dishonest) angles. One greedy fraudster that we knew gave us two written references (that we did not asked for). He made the mistake of swapping the telephone numbers of the businesses on their letterheads (that he falsified).
* Enemies – people that cheat other people tend to make unpleasant enemies that will expose them or get back at them at any opportunity that they have.

Consequences of Failure

Greedy transactions are generally not sustainable and will eventually come back to hurt the perpetrator. When the greedy person finally fails the consequences can be very unpleasant, including the following:

* Financial ruin – any wealth that is built on dishonesty can easily collapse and cause financial ruin at unexpected times.
* Legal ramifications – this include civil actions and criminal charges. The first one can take away your money and the second one your freedom.
* Lost of respect – people generally loose their respect for dishonest people. It is even worse if it is your spouse, children, family, friends and colleagues.
* Lost of self-respect – this is potentially the most serious of all the consequences. Once you have lost your self-respect and feel worthless (combined with all the other consequences) it can be very difficult to turn it around (but not impossible).
* Opportunities costs – while a greedy person was looking for all the short cuts they tend to miss the opportunity to built something sustainable that stands on solid foundations. Genuine opportunities are also ignored and lost.

Summary

People that act out of greed tend not to add value, they hurt a lot of people (including themselves in the long run) and it generally has very serious consequences. To do honest business can be so much more sustainable in the long run and with the potential of better financial rewards and self-actualisation.

Copyright© 2008 – Wim Venter

Wim Venter is the CEO of Ventex Corporation, a business development consultancy. To receive more information on how to start a new venture, to grow it sustainably and to finally harvest it successfully, sign up for our free newsletters or contact us via our website.

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Tags: business, decision, management, choices, ethics

Ponzi schemes are hot and even it’s illegal they always will be hot. If you go to some online forums on how to make money online you will see members posting threads promoting ponzi schemes and even the so called hyips are most of the time a ponzi scheme.

No matter what they have told you the creator of a ponzi scheme doesn’t care about your profits. Most people are running ponzi schemes to make some quick bucks from theirself.
I’m sure you have already seen high yield investment programmes where they promise you that they are a team of expert traders making five percent daily or even more. And the fact is that some people actually do believe, even the programme has no proven track record, that their money is traded as it should be. If you see some posting on a forum “earn money fast without doing any work” than you could say almost sure he/she must be promoting a ponzi scheme.

What exactly is a ponzi scheme

Ponzi schemes or pyramid schemes has nothing to do with investments, business or sales. Simply because they don’t trade your money or they don’t sell you anything. The fact is that a ponzi scheme uses the money of new investors to pay out old investors. Some ponzi schemes are surviving a few weeks and some of them even a few months. But this is for sure they all go die after some time. Why? Because mathematically it’s impossible to find new investors.
Or sometimes the legal authorities find out the ponzi scheme and close it.

Charles ponzi: The godfather of ponzi schemes

Charles Ponzi was not the first who created a ponzi schemes but actually he was one of the first people that created a fraud scheme on such a large base. In 1903 Charles Ponzi emigrated from Italy to the United states. He has worked on a post office and studied at the university of Rome, although studied is not a good word for Charles it was more a vacation.

Without almost any money he arrived at the United States and did some jobs there. Four years later he moved to Montreal where he worked in the Banco Zarossi. Zarossi the owner gave a six percent interest on bank accounts. But Ponzi discovered that Zarossi used the money from new client to pay out old client. The scheme failed and Zarossi escaped to Mexico. Ponzi stayed even in prison for fraud for some years but in 1911 he was released. After the war he started his scheme based on postal reply coupons and promised his clients a return of their money in a short time frame of 90 days. His own company called the Securities Exchange Company was a fact. He had a lot of agent that were working for him and in 1920 he had accumulated millions of dollars, a very large sum of money for this time. I think it is no surprise to you that Charles Ponzi lived very luxuriously.

But people were asking questions about his company after an unsuccessful lawsuit.
The Boston Post wrote some negative articles about his company. But however the newspaper offered Charles Ponzi five thousand dollars for his story and it became a headline. However a few days later federal agent closed down his company. On august 13 1920 he was arrested but however some people protested strongly, no wonder at all some of them had invested millions of dollars. He went to jail and stayed there to 1934 after he was released he was deported to Italy. Ponzi spend the last years of his live in poverty and in 1948 he died.

Frederik is an online marketer who blogs about affiliate marketing, adsense and adwords. In his blog he gives out some good tips that you can pick up to improve your businesses.

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