Sunday, November 04, 2012
It was only $300, or the benefits of microtesting...
[Ed. note: As usual, your humble blogger began this post some time ago, and the circumstances surrounding the topic have changed and not for the better. Nevertheless, the thoughts are clear and worth transposing, even if they are not quite as appropriate as when the post began.]
In keeping with my prior posting, and as an attempt to explain better the thoughts I've developed on the topic, I've decided to finish paying off my last retirement loan, but I won't take the extra cash flow and dedicate it to either the apartment or student loans.
I consider upgrading the apartment separate from paying off the apartment early, since I'll directly benefit from new cabinets, bath fixtures, etc. The work will also raise the value of the place beyond the present
price, so it will help me get closer to breaking even when I choose to sell it. Beyond that, the most I will do is attempt to refinance the place to lower my monthly payment.
Having all this available money is dangerous since I'm, er... flighty. I didn't spend all this time and money correcting my situation only to mess up all over again. Sitting at home and counting my wages like Ebeneezer Scrooge isn't an option either, since surviving the upcoming hard times will require determined, pro-active work today. Essentially, I need to find a new way to make a living, and pronto.
I was thinking on all this when I received some bad news. Some months ago I set up a website through Zeekler, a penny auction website. The business plan was (cough) as follows: Let's say I want to buy an I-pad, but I don't have enough money, a common enough occurrence. Penny auctions will allow you to "place a bid" (actually, you're buying a raffle ticket for a dollar) with the chance to buy said Apple device for a much lower price, say $45.13. How would such a sale make money on a $600 item? Well, other people also bought a bid for a dollar promising to buy the tablet for a little less, and someone else made a slightly smaller bid, etc. You paid $46.13; the company made $2000. An astute reader would ask, why would anyone spend a buck if they aren't guaranteed to win?
The answer was that they didn't spend that dollar. This is where I and other investors enter the picture. We would buy bids, and hand them out to bidders, who therefore risked nothing if they didn't win. I was introduced to the company by a friend, who made money when I set up the website and paid my fee every month. I made money because I drove traffic to the website, and the company made money by getting people into a legal form of gambling. It's multilevel marketing for the new millennium. I was responsible for posting an add everyday, and I received a small sum based on how many bids I had purchased. No daily add equaled no daily money. You could withdraw the money you'd earned, or you could recycle it to buy more bids. It was generally advised you wait until you had 50,000 bids before you began taking money from your daily percentage. Note I'm not even talking about the bonuses you received from the people you recruited, those whom your charges recruited, etc. I never asked anyone to join me, and I am ever thankful for that today.
So my total investment was $300; this was to set up the site, and 2 more months of fees. I was supposed to buy additional bids, but something just didn't sit right with me, so I never bought them. I developed this feeling while in the shower, where I do most of my best thinking. My epiphany was as follows: one of the ways the company kept people motivated was by "retiring" points, so that you could never cash out 100% of all of your earnings, and you were more or less required to recruit other people to keep the cash flowing. Doesn't that equal a Ponzi scheme? Well, the Attorney General of North Carolina certainly thought so, and shut down the operation. Also, keep in mind I never actually bought anything from the site. It's possible no one ever actually won these auctions and everything was for show.
In the end I was lucky; I only lost $300. Others lost the maximum bid purchase package of $10,000 as well their monthly fees. Don't forget the pissed off family and friends who similarly lost a bundle, and were recruited by someone they trusted. To answer the obvious question, I am not angry at the lady who brought me in. I lost very little, but she lost thousands. The people who are going to be really pissed are those who did make money; they'll be required to pay back their ill-gotten gains, at least in theory. If I ever get back any or all of my loot, I'll treat myself to dinner and a movie, and be grateful. My lesson from this was that there's no get rich quick schemes out there; if it sounds too good to be true, it generally is. This covers the $300 portion of the title, what about the second part. Part 2 is coming tomorrow.
In keeping with my prior posting, and as an attempt to explain better the thoughts I've developed on the topic, I've decided to finish paying off my last retirement loan, but I won't take the extra cash flow and dedicate it to either the apartment or student loans.
I consider upgrading the apartment separate from paying off the apartment early, since I'll directly benefit from new cabinets, bath fixtures, etc. The work will also raise the value of the place beyond the present
price, so it will help me get closer to breaking even when I choose to sell it. Beyond that, the most I will do is attempt to refinance the place to lower my monthly payment.
Having all this available money is dangerous since I'm, er... flighty. I didn't spend all this time and money correcting my situation only to mess up all over again. Sitting at home and counting my wages like Ebeneezer Scrooge isn't an option either, since surviving the upcoming hard times will require determined, pro-active work today. Essentially, I need to find a new way to make a living, and pronto.
I was thinking on all this when I received some bad news. Some months ago I set up a website through Zeekler, a penny auction website. The business plan was (cough) as follows: Let's say I want to buy an I-pad, but I don't have enough money, a common enough occurrence. Penny auctions will allow you to "place a bid" (actually, you're buying a raffle ticket for a dollar) with the chance to buy said Apple device for a much lower price, say $45.13. How would such a sale make money on a $600 item? Well, other people also bought a bid for a dollar promising to buy the tablet for a little less, and someone else made a slightly smaller bid, etc. You paid $46.13; the company made $2000. An astute reader would ask, why would anyone spend a buck if they aren't guaranteed to win?
The answer was that they didn't spend that dollar. This is where I and other investors enter the picture. We would buy bids, and hand them out to bidders, who therefore risked nothing if they didn't win. I was introduced to the company by a friend, who made money when I set up the website and paid my fee every month. I made money because I drove traffic to the website, and the company made money by getting people into a legal form of gambling. It's multilevel marketing for the new millennium. I was responsible for posting an add everyday, and I received a small sum based on how many bids I had purchased. No daily add equaled no daily money. You could withdraw the money you'd earned, or you could recycle it to buy more bids. It was generally advised you wait until you had 50,000 bids before you began taking money from your daily percentage. Note I'm not even talking about the bonuses you received from the people you recruited, those whom your charges recruited, etc. I never asked anyone to join me, and I am ever thankful for that today.
So my total investment was $300; this was to set up the site, and 2 more months of fees. I was supposed to buy additional bids, but something just didn't sit right with me, so I never bought them. I developed this feeling while in the shower, where I do most of my best thinking. My epiphany was as follows: one of the ways the company kept people motivated was by "retiring" points, so that you could never cash out 100% of all of your earnings, and you were more or less required to recruit other people to keep the cash flowing. Doesn't that equal a Ponzi scheme? Well, the Attorney General of North Carolina certainly thought so, and shut down the operation. Also, keep in mind I never actually bought anything from the site. It's possible no one ever actually won these auctions and everything was for show.
In the end I was lucky; I only lost $300. Others lost the maximum bid purchase package of $10,000 as well their monthly fees. Don't forget the pissed off family and friends who similarly lost a bundle, and were recruited by someone they trusted. To answer the obvious question, I am not angry at the lady who brought me in. I lost very little, but she lost thousands. The people who are going to be really pissed are those who did make money; they'll be required to pay back their ill-gotten gains, at least in theory. If I ever get back any or all of my loot, I'll treat myself to dinner and a movie, and be grateful. My lesson from this was that there's no get rich quick schemes out there; if it sounds too good to be true, it generally is. This covers the $300 portion of the title, what about the second part. Part 2 is coming tomorrow.
