Ponzis and Pyramids

Congress is set to pass another extension to the Federal unemployment benefits program. Now that the nation is approaching 10% unemployment, our government believes its a good idea to continue to extend the safety net. The news of the unemployment benefits extension got me thinking about what people do to make ends meet when they are unemployed or under-employed. So, I looked at the Bureau of Labor Statistics site (www.bls.gov) and found that for everyone one person that's unemployed in the U.S., there's at least one person that considers themselves "under-employed". That translates to more than 33 million working adults that aren't able to work as much as they'd like to.

One only needs to look at eBay to see the fallout of prolonged unemployment. In August, 2008 there were 15 million average daily auctions on eBay. In August, 2009 there were 30 million average daily auctions on eBay. People are selling their stuff to generate cash to survive.

Desperate times call for desperate measures for millions of people.

We've been hearing a lot about Ponzi schemes lately and it got me thinking about how people get involved in both illegal Ponzi schemes and borderline illegal multi-level marketing pyramid companies like Amway. People are trying to make an extra buck or two, which is why MLM companies like Amway exist where the members recruit other agents, who recruit more agents with everyone making a cut of the sales by their recruits - all the way down the pyramid.

In case you're curious about the origins of the term "Ponzi" scheme, it actually has nothing to do with my hero, Fonzi. Of course, Fonzi was the the always cool ladies man who I so desperately want to be . Charles Ponzi was an Italian immigrant to the U.S. who's likeness is associated with the get rich quick scams that he is so infamously associated with. Investors seeking abnormally high returns make investments in a fund that oddly generates a much higher rate of return than typical funds. Eventually, the fund manager running the Ponzi scheme can no longer afford to pay out the returns and the fraud becomes apparent. If you're trying to augment your income, try and stay away from anything that sounds too good to be true. It might turn out to be a Ponzi scheme.

Some people turn to other get rich schemes they find on the internet like the ones that promise you can earn thousands of dollars per week from the comfort of your own home. All you have to do is make a small investment - which is often where you get fleeced. Some people sell Tupperware, Longaberger Baskets, or Pre-Paid Legal services
to try and make ends meet. All of these involve making a pretty significant investment in time and/or money to actually make a decent income.

Sherpa has an idea that we think will prove to be the best way to earn some extra cash. There are 67 million homeowners in the U.S. with over 90 million unused rooms. Sherpa is going to help homeowners monetize those unused rooms by listing these rooms as Homestays. SmithTravel Research reports there are 4.8 million hotel rooms in the U.S. If only 5% of the unused rooms inside American homes become monetized on Sherpa, the lodging supply in the U.S. will more than double. This dramatic increase in supply will provide millions of homeowners with additional income and will make travel more affordable for so many more people. In doing so, Sherpa will address the growing demand for travel and empower millions of people to augment their income and earn a decent living.

Russ


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

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