Home business adventures, failures, and bankruptcy

Of course the entire purpose of starting a home business is to make money. Well there are those who start a home business just so they can have a tax write off--but for me, the reason is basically to earn additional money. The question that the home entrepreneur is confronted with is simple: which home business to start. There are literally thousands of people promoting all sorts of home businesses that run the gamut from reselling e-books, to stuffing letters, to really bizarre things that are so complicated that people join them by sheer faith.

I got involved in one of the latter kind. My good friend whom I will call Ed suggested that I get involved in the business that he was in because I was sure to double my investment in about 3 months. That sounded pretty good. I mean, who wouldn't want to double their money every 3 months. He had invested about a two thousand dollars, and already he had withdrawn over $10,000 dollars of profit.

There was no product. We were all involved in buying advertising space on the internet. When you consider that web pages can be put up today that are FREE, I think we over paid considerably. But we did not care, because as other people invested and bought advertising space, we were paid double whatever we invested originally.

Now if you think about this, it absolutely cannot go on forever. Remember that if you start with just a penny, and double it every day for 31 days, by the 31st day, you will be dealing in millions of dollars. The huge pile of money being created for the founder of this concept (and he only took out a meager 11% for "expenses") was nothing compared to the millions of dollars that were being invested. But each time the entire pot doubled, it of course took at least twice as many people to invest to get it doubled again. After awhile, it took longer than three months to double. And then of course new investors began to lose interest as it took 6 months to double, then a year, then....

After awhile, nobody who had already invested was getting paid. The whole scheme ground to a halt. I did not ever get any money back. The whole program was revamped trying to get it going again. But it never did. I got an email recently that the whole business was bankrupt. I will never get a penny. The only people who did well were the original investors, and even now their gravy train has derailed.

One of the things I found out from this experience: if it looks too good to be true, it probably is. There are hundreds of people out there wanting to take your cash assuring you that you will make a pile of money by just investing in their particular home business. If the business seems pretty complicated, and you can't describe it in a couple simple sentences, don't invest.

If there is not a real tangible product, then warning flags should be going up all over the place. The business should make sense from a business point of view. You should be able to see that it will be in business for the long haul. Otherwise, just keep your money and you will be that far ahead.

Hoping your home business will succeed,
David A. Youngs