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Online Money Makers

Something Old - New - Borrowed...



There is no doubt about it - online money is out there. Huge fortunes are being made on the Internet every day. And,strange as it may seem, there are also thousands of would-be fortune-makers failing to make a dime on the Internet more often than not. If you are among these disappointed folks, don't give up.

In this article I will explain the key know-how that separates the online money winners from the losers in this game - setting you up to be among the big money winners. For an adequate explanation I need to first familiarize you with some of the key ideas that pre-date the Internet.

 Before the Internet

The universal need to make money has been with us since long before the Internet and the advent of online money. And there have always been folks trying desperately to fill this need. One of the earliest strategies to accomplish this was the phenomenon that has come to be known as the "chain letter". Now don't worry - I'm not going to suggest you start a chain letter; but rather to explain a lesson we can all learn from that ill-fated methodology.

The power of the chain letter lay in the fact that it allowed people to leverage their investment by getting lots of other folks to spend money on printing and postage in a way that brought "customers" to them. If you've never gotten a chain letter, it worked (when it worked at all) like this.

 How Chain Letters Worked

You get a letter in the mail that explained the process and asked you to send a small amount of money to the person whose name and address were at the top of a list of future recipients that appeared at the bottom of the letter.

Next you were told to copy the letter, by whatever means you liked, deleting the first recipient on the list, and putting your own name and address on the bottom of the list. This often meant re-typing the letter on your own typewriter - a laborious process at best.

Then you were told to copy and mail the letter to as many people as you could afford to send it to. Recipients for the letter were basically chosen at random - from your phone book for example. The reasoning was that if you sent the letter to 100 people, and each of them sent it to 100, and so on, by the time your name got to the top of the list it would be in the hands of many thousands of recipients - each of whom would presumably send you a small amount of money.

 How Chain Letters Didn't Work

The principle problem with the chain letter was the fact that most recipients never did anything with them. They just said, "Thanks, but no thanks" and threw the letter away. But there were exceptions; some were exceptionally well written and actually made money for the small percentage of people who participated.

A deeper problem with the chain letter was the fact that there was no quid pro quo. Your small donation to the person at the top of the list was a gift. You got nothing in return. For this reason, our country's lawmakers got into the act at both the state and federal levels.

 The "Demise" of the Chain Letter

Lawmakers don't like to see large amounts of money changing hands without any way for them to get their own hands on some of it - to tax it in other words. Since each participant in a chain letter only contributed a small amount of money, say a dollar or two, it seemed impractical to try to get these folks to report the gift to the government as income to the recipient.

So the "authorities" did just what you would expect them to do. They outlawed the chain letter. The public rationale was that the process would sooner or later "saturate", because 100 x 100 x 100 … etc. would eventually encompass everyone on the planet and those getting on board toward the end would never get the reward they had been "promised" by the chain letter's author.

These wise defenders of the public of course ignored the fact that no chain letter in the history of chain letters ever actually "saturated", because only a small percentage of the letter's recipients ever participated. But the concept looked good mathematically and seemed popular with the voters, so the public remains "protected" from chain letters to this day.

Oh, and did I mention that every time a state Attorney General shuts down a chain letter, thereby interrupting the chain, sure enough the later joiners of the chain lose money, just as the authorities said they would - thus "justifying" the prohibition.

 Enter the "Gifting Club - Still Not Online Money"

Today the chain letter has morphed into the gifting club - another online money strategy after the advent of the Internet. The gifting club works in much the same way as a chain letter; but each gift is accompanied by a signed document that purports to attest that the giver is voluntarily participating in the process with full knowledge that he/she may never receive anything back in return for their gift to the recipient - thus waiving the "protection" that chain letter prohibitions claim to provide to chain letter participants.

Since it would be constitutionally illegal for any government to deny person A the right to bestow a gift on person B, this strategy would seem at first to get around the prohibition of chain letters. But, alas, the lawmakers still can't tax the proceeds, and there is still no quid pro quo, so the lawmakers nation-wide are as opposed to gifting clubs as they were to chain letters. Big surprise, huh?

The result is that gifting clubs are on their way out, as state after state prohibits them on the pretext that (a) no one would participate in them were it not for the hope of a massive financial return, and (b) there is no guarantee that a participant will actually derive a benefit from their participation, and (c) the public is composed of nothing but unsophisticated dumb-clucks that have to be protected from themselves despite their alleged knowledge of the risks and their presumed "waiver" of government protection. Such is the nature of government today.

Oh yeah! Lest we forget, the same reasoning could be applied to any investment - the purchase of a stock on the stock market, or a bond, or a bank's certificate of deposit. Private individuals take risks with their money all the time; and it's always permitted when it happens in a way that the lawmakers are able to tax the proceeds. Somehow I don't think that's a coincidence.

 The Invention of Multilevel Marketing (MLM)

In the early sixties, two decades before anyone imagined making online money, a little vitamin company called Nutrilite invented the marketing strategy we know today as multilevel (or network) marketing. This was a very clever idea. It built on the sequential recruitment process inherent in the chain letter; but it sold real products: vitamins. Now there was a quid pro quo in every transaction.

Two young men partnered up and got really successful at this business and wound up buying Nutrilite. Then they bought the patent rights to an environmentally friendly cleaning product that they called Liquid Organic Cleanser (L.O.C.) and added it to their product line. Out of this grew the giant MLM company known as Amway. Its annual sales hit a billion dollars around 1986, and is approaching seven billion dollars today (2008).

 MLMs and the Law

The Federal Trade Commission took Amway to court, claiming that the sequential recruitment of distributors violated the anti-chain-letter laws. But for once the courts did something right. They recognized that there is nothing inherently wrong with sequential recruitment, and completely vindicated Amway - though not before Amway's reputation was all but destroyed in the U.S. by avid media pundits who jumped on the anti-MLM bandwagon.

When the dust had settled, the Federal Trade Commission and the Department of "Justice" agreed to re-define the chain letter and the MLM so the chain letter remained illegal while the MLM was officially legalized. The key element in the settlement of this controversy was the fact that the MLM actually sold something of intrinsic value (vitamins, soap, etc.) to a real customer who wanted the product - thus the quid pro quo. This was still a far cry from the invention of online money making; but it was a step in the direction of what was to come.

The lesson many learned from this change in the laws is that sequential recruitment is acceptable (legal) when the customers actually receive something they want in return for their money (be it online money or off). The exception to this ruling is that the "something of value" cannot be simply training materials purporting to teach the recipient how to participate successfully in the "network". Such materials can be sold legally to network participants by other organizations than the MLM company; and such organizations quickly grew up around most MLM networks, selling millions of dollars worth of tapes, books, videos, seminars, and conventions to MLM members.

 Mail-Order MLM (Still Not Online Money)

Still talking pre-Internet lore, it wasn't long before enterprising individuals, armed with awareness of the above changes in the law, began building mail order businesses in which the products sold were documents (usually small booklets) that provided the reader with information that might be useful to people wanting to cash in on the burgeoning mail-order industry.

Such documents were easy to create, cheap to produce, and inexpensive to mail. Employing sequential recruitment similar to that used by chain letters, such businesses provided (for a price) the document products and the methodology of distribution. It was up to each participant to reproduce the documents, to advertise them via the mails, and to deliver them via mail as promised.

This system of doing business meets all the legal standards of current MLM laws and provides for a very high return on investment. A document that cost 50¢ to produce and another 50¢ to mail might sell for $10 or $20. By the time such businesses were invented there were companies compiling lists of "opportunity-seekers", so most participants bought or rented such lists, mailed their promotional materials to the folks on the list and were quickly up and running.

This business model is still much in use today, and huge profits are being made thereby. The use of the Internet to facilitate this online money making process further amplifies the method's profitability and makes it accessible to almost anyone. Its development was the next step towards creation of the first online money making machine.

 Enter the Internet (Online Money At Last!)

On the Internet today, free or inexpensive email to opt-in lists, free or inexpensive classified advertising, and highly targeted (though not-so-cheap) search engine advertising make it possible to advertise much more cheaply than can be done by conventional mail. The cheap and often automated creation of personal websites puts large amounts of information in the hands of would-be "infopreneurs" at a fraction of the cost of snail-mail distribution of the same information.

Instead of printing and mailing booklets (products) to their customers, businesses of this sort simply receive payment via secure credit card transaction, and then permit the buyer to download the product (document) at the click of a mouse at essentially no cost to the seller.

Thus the properly equipped infopreneur creates a virtual online money-making machine that handles all the formerly laborious tasks associated with mail-order document sales.

So, by combining the best features of sequential recruitment, MLM sales, and mail-order document sales with the computer automation provided by the Internet, today's infopreneur can indeed make large amounts of money in record time. This is the basis of virtually all the big online money-makers.

In a sense, this methodology functions like the microchip itself. The utility of the microchip is at the heart of every modern electronic device available today: the computer, the DVD-player, the cell phone, and so on. In much the same way, the know-how described above is at the heart of ALL the most successful online marketing businesses that you see advertised today.

It is also no coincidence that the phrase "make money online" is the item most often entered in any major search engine. The worse the economy, the higher the unemployment level, the fewer the jobs available, the more attractive this kind of business is to the public. This also makes it the most competitive form of business on the planet - but that's a subject beyond the scope of this article.

 The Best Online Money Machine - So Far

Examples of this newly developed business technology come in many styles. Some are well explained and easy to implement; some are more complex and not so well documented. If you don't want to build your own online money machine from scratch - a major undertaking - I recommend that you plug into an existing one that works.

To see the best example of this technology that I have found so far - one that is simple, legal, honest, and ethical - and that can really do well by you financially



, just go to: THE ONLINE MONEY MACHINE.

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Robert Podolsky

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