How come the same people who complain so loudly about MLM can't wait to give their cash to Internet marketing "gurus"?

Then I'll show you how they shaped my perception of business and consumer behaviour, even to this day, so many years later. And how I'm using that experience and know-how to help other people — like you! — avoid becoming victims. 

See if you can relate to any of these experiences, too.

Incident 1: The Matinee Serial of the Mine Dump Salter

As a young boy of 10 years I loved Saturday afternoon matinee serials at the local cinema. They'd open with a quick review of what had happened the previous week, then they'd move into today's episode, then they'd finish with a spectacular, heart-stopping, cliff-hanging event, followed by a hard-sell to come back next week to see what happens.

Of course, what really happened was usually a cheap cop-out of improbable proportions that left young fans cynical and disappointed... until the latest cliffhanger, followed by the tantalising trailer for next week's episode!

And we kept on coming back, week after week.

One of the most memorable of these serials, a western, told the story of how an unscrupulous mine owner, who'd become fabulously wealthy during the gold rush era, bought up the rights to all the tailing dumps in the region. Tailing dumps were the discarded soil, gravel etc from the mines that were such an eye-sore (and often a health risk) in any mining community.

He was selling rights to mine the tailing dumps after he'd "salted" them with tiny traces of gold, and get-rich-quick ex-miners and newcomers to the region were handing over their money in the desperate hope of becoming rich by uncovering gold nuggets missed by the original miners.

He also owned the local stores selling picks, shovels and supplies to the newcomers at exhorbitant prices. He owned the local saloons where they drowned their sorrows or celebrated their rare lucky strikes — usually a tiny nugget planted by his henchmen to keep the suckers eager. He even owned the assay office that purchased any gold found at rock-bottom prices. He cleaned up at every step of the way downhill, and the mindless miners were too greedy, lazy, ignorant and stupid to see what his real game was in keeping their vain hopes alive.

I never forgot how incredulous I'd been that people could be so easily duped by false promises that appealed to what they wanted to be true in such powerful fashion.

And I never forgot the come-uppance the unscrupulous mine owner received when his duplicity and greed were finally recognised, and the people he'd exploited and abused turned on him.


Incident 2: The Body Builder and the Direct Marketer

When I was about 14, I was captivated by a series of popular magazine ads telling me I could build a better body and become more handsome, more attractive to women and able to fight off bullies who kicked sand in my face at the beach and stole my girl, etc by buying their body building program.

I mentioned it to my policeman father, and he explained how the ads were basically "sucker bait" to lure fools and part them from their money with an endless array of products and programs that promised to deliver the goods but, somehow, as soon as you bought one of them, you discovered you needed the NEXT one... and on it went.

I thought his view was a bit cynical, so I sent away for the free information kit. What did I have to lose?

I soon received a well-written sales letter and brochures promising me a magnificent physique, a swarm of beautiful young women, glory and good looks — just as soon as I sent the (to a 14 year-old) expensive purchase price.

I showed the information and sales letter to my Dad. He laughed and advised me to do nothing, just to wait a few weeks. Then, he assured me, I'd receive another letter and more literature — but offering everything at a lower price.

So I waited. And, sure enough, the next package arrived, offering the same deal at HALF PRICE... but only if I made a decision right there and then, and sent my money within 48 hours.

I didn't.

A few weeks later, another package arrived, this time offering me the same deal at even LESS cost! So I decided to see how low they'd go.

Over the next few weeks, before the packages stopped arriving altogether, the price dropped to somewhere around ONE-TENTH of the original asking price. I found this intriguing. But what I found even more intriguing was that this company had gone to the trouble and expense of printing all of these letters and materials. They obviously planned this process to be ongoing, knowing that the true suckers would pay more and the die-hards would hang out for lower and lower prices.


Incident 3: The Lazy Man's Way to Riches

At about this time, I also sent away for a book advertised with full-page, long-copy ads by a man named Joe Karbo. The books was titled "The Lazy Man's Way To Riches" and Joe's ads were masterful pitches with enormous emotional appeal. They obviously worked, too, because the ads kept appearing, month after month, in those expensive national magazines.

Intrigued, I sent off my money and duly received a small (MUCH smaller than I expected) book that told how Joe had been broke and at risk of losing his dream home, when he discovered the secret of direct response advertising. The second half of the book was a step-by-step guide for setting up a simple, direct response mail-order business of my own.

The thrust of Joe's advice was to write and publish a book like his, then advertise it to suckers like me, who'd soon begin sending their money to learn the "secret" of how to get rich without any effort.

Luckily for me, I was more interested in the strategies and techniques these advertisers had all used to tap into their audiences, than in getting rich quick or building a new body.


Putting the strategies and techniques to work legitimately

Some years later, I found myself in the advertising profession, writing very effective copy for direct response clients. I hadn't followed Joe's advice exactly, but I had certainly learned how powerful direct response copywriting could be from those early experiences.

My first attempt at anything like what Joe had advised came in 1976-7. I was running a creative and technical services business related to the printing and publishing industries at the time, when a frustrating personal experience alerted me to a real and pressing need in the market place.

I was living then in the town where I was born: Wonthaggi, the most photographed town in Australia in the years from 1909 to 1914. Wonthaggi was a State planned and owned town to support the newly-discovered Powlett Coalfields. The State Mine had opened there in 1910 and the population of the initial "tent town" had swollen to more than 5,000 people very quickly.

My grandfathers had moved to the town to work in the coal mines. My maternal grandmother, with whom I stayed regularly on holidays, had a large box of photographs that I loved to pore over on cold, blustery winter nights by the light of her oil lamp. She promised me that, when she died, her photo collection would be mine.

Now, in the early 1970s, her promise had been thwarted by the thoughtless actions of family members, who had moved into her home after her death and, as so often happened at the time, tossed most of her belongings onto a roaring bonfire in her back yard.

I was devastated that such a priceless heritage had been so senselessly lost.

Then I began hearing of more and more photo collections, diaries, journals and other priceless primary historical sources being destroyed around the district as more and more of the older generation passed on. The straw that broke the camel's back, for me, was the news that the family of two elderly, spinster sisters, daughters of a local doctor who had settled in the town as children before it was even a town in the late 1890s, had burned their journals — a meticulously-kept historical record of the town and its people for more than 80 years.

I decided to publish a book of photographs of the town, the State Mine and the people of the region, together with some historical background to put it all in contect. I began enquiring after sources of photographs and reached agreements with a number of people to publish their collections. Then I began promoting the book by direct response advertising to see if there was likely to be a worthwhile market and demand for it.

In a nutshell, I pre-sold more than 85% of the copies at premium prices before the book was even written or compiled, let alone printed. Some 10 months after reaching those agreements I went to collect the photos for publication — only to discover, to my horror, that more than two-thirds of them were no longer available because the owners had either died or gone into care, and their families had destroyed their photo collections!

The book was a sell-out success, due largely to the direct response advertising campaign I created to market it. But also to the very real perceived need for it, in order to preserve a priceless historical heritage.

The More Things Change, The More They Stay The Same

Over ensuing years I watched as different operators came and went in the magazines. They all had one thing in common: they targeted their market — the greedy, the lazy, the fearful, the ignorant and gullible — and they milked it dry.

First, they created a powerful vision that promised the reader they would get rich quick, with little time or effort, if they just used the writer's exclusive or unique system. All they had to do was pay the writer the outrageous sum demanded for their secret, inside know-how.

I watched as the Pyramid-selling scams of the late 1960 and 1970s lured the same audience with the same ludicrous, but oh-so-seductive promises of instant riches. I watched the same people react with outrage when they discovered how they'd been duped yet again, and I scratched my head in wonder at the never-ending gullibility and mindless stupidity that drove them back into the clutches of the same predators, over and over and over again.

The High Tech Revolution

In 1996 I logged onto the Internet for the first time and began exploring. I guess I shouldn't have been surprised, but I was, because the first thing that caught my eye was a new "Gold Rush" Era peddling Internet-based systems of online malls and related services and cyber "real estate".

The appeals were all the same.

The words were still the same.

The only thing different was the product (this time, the Internet itself).

I watched, appalled, as well-meaning, but clueless, people paid over outrageous sums of money for the right to sell a new-fangled marketing system to others at a lesser sum. One such scheme was selling the first level of buyers a marketing system for US$100,000.

These people would then sell the system for US$50,000 to the lext level, and so on.

What was the system? And what did it sell?

It was nothing more than a self-replicating web site and autoresponder system promoting this system! There was NO tangible product. In short, you bought the right to sell the right to sell the right to sell the right to sell the right to take people's money from them. Right?

In other words... it was no different from an out-and-out pyramid scam!

But because it was set up and run by an Internet "Guru" with a Ph.D and reputation as a self-proclaimed "Guru", nobody thought to question it.

A lot of people took major financial hits that they couldn't afford.

The Low Tech View

Around the same time — the mid-1990s — we saw the rise of the property investment "gurus" and their high-priced seminars and workshops. People flocked to hear how they could buy up old, cheap houses, re-value and rent them, then use the "instant" equity from the re-valuation to fund dozens more homes until they could retire, rich, on the rental income each month. They could use the rent payments and tax breaks from negative gearing to pay for the properties.

Over the next couple of years I noticed some things about the property market.

I noticed that property prices — especially for the old, cheap homes the new graduates from these "Make a Killing in Residential Investment Property" programs were all seeking — began to climb steadily. When I asked the #1 real estate in our city if these people were driving up prices, he laughed and said yes, they were, and he was about to launch a whole new division of his business that would teach people how to do it, too.

I noticed that, pretty soon, it was almost impossible to find any of the kind of properties the "gurus" were advising their acolytes to buy, so they were now advising them to look for good opportunities in apartments and units instead.

Not long after this trend developed, I noticed that the "gurus" always seemed to have amazing "special opportunities" just for their students. Always sold "off the plan" (so buyers could save a fortune in government stamp duty because the apartments and units weren't even built yet) and, with a wink and a knowing whisper, that "these apartments would double in value by the time they were actually built, in about two years time".

Then I noticed that each of these "gurus" seemed to have connections to well-known property developers, and that new, high-rise residential towers began springing up in strategic areas of the city, built by these same property developers. Clients in the building industry told me that the "gurus" received very lucrative commissions on every property sold to their followers. In fact, entire developments were being allocated to individual "gurus" for them to sell to their students.

I also noticed that the prices charged by the "gurus" for their training courses climbed higher and higher. One course — mostly filled by people who'd attended previous courses by the "guru" involved, the prices climbing higher with each program — cost $55,000! Just to learn how to make your fortune in residential property investment?

I wasn't surprised when this same "guru" announced the availability of loans to fund your participation in his exorbitantly-priced programs. Those loans were available through his new finance company. Interest rates were outrageous, but the loans were easily obtained if you had equity in your home to offer as security.

I wasn't surprised, either, when a lot of graduates began running into trouble. These were the same people who'd driven up prices of residential property to record levels, ignoring the advice of the "gurus" to buy cheap properties, on which they could gain an immediate boost in valuation, then use that overnight equity increase to fund even more cheap property purchases to rent out, using the tax savings from negative gearing to offset their own contributions.

What kind of trouble?

For a start, a glut of residential properies began to occur. Many were finding it difficult to attract tenants, especially at the the high rentals the "gurus" had told them to be sure to charge tenants in order to minimise their own contributions to loan repayments, and to cover the high mortgage repayments created by them paying too much for their properties. So they were suddenly being faced with the prospect of having to cover monthly mortgage repayments on several properties that had no tenants.

While the tax savings available were very attractive, before long they'd used up all of the available tax deductions. After all, they only paid so much tax in the first place. You couldn't pay less than zero. So, after the first few deductions, there weren't any more tax breaks to help cover their contributions to mortgage repayments.

Ah... but there was fresh hope. Before long, there was a sudden surge of cheap properties coming onto the market for residential property investors — and still more eager graduates from the "gurus'" expensive programs — to snap up. A real buzz flew around the city. But where were these newly-available properties coming from, so unexpectedly?

Surprise, surprise! They were flooding onto the market because the previous bunch of graduates couldn't keep up the mortgage repayments! Their dreams of retirement riches had evaporated as they found themselves faced with crippling debts, not just for the properties they'd bought (but couldn't rent for anything but rock-bottom prices, if at all), but for the high-interest loans they'd taken out to pay for those over-priced, over-hyped residential property investment programs!

Not only were they having to unload their investment properties at huge losses, they were being forced to sell their own homes as well, just to cover the shortfalls.

The biggest "guru" hit the headlines, shortly afterward, when government regulators raided his offices and homes to seize records. Then, a few days later, he was charged with fraud and deceptive conduct. Others soon followed. Within weeks, it was hard to find any advertisements in the newspapers for residential investment property seminars and workshops.

But before long, a new trend began to appear. "How to make your fortune in share and options trading" seminars were soon the new rage. Computer software systems were now making it possible to know exactly when to buy and sell, taking all the risk out of a notoriously volatile, high-risk wealth creation opportunity.

I noticed, too, that most of the new share trading "gurus" were the same as the previous residential property investment "gurus".

Then it struck me, hard. In fact, I couldn't believe I hadn't seen it before this.

All of the "gurus", high-tech and low-tech, were using the same techniques I'd seen used when I was young!

Those "gurus" were teaching inexperienced, eager people how to create wealth using the techniques and systems that the "gurus" themselves had used to make their fortunes in residential property investing, share and options trading and, now, internet marketing. But notice the words here?

"HAD USED" was the key. Past tense.

These "gurus" had already made their fortunes from riding the face of the latest wave. From stripping out the gold mines.

Now they were salting the tailings and selling the know-how, the picks and shovels to the gullible masses who'd missed the Gold Rush, but who were eager to get involved now that most of the gold was gone!

They use expensive, dazzling, brilliantly-written and presented advertising campaigns, direct-mail letters, free information seminars, web sites, e-books, email campaigns, online videos and teleseminars that take the promotion strategies originally used by savvy mail order marketers like "Young Hercules Body Building" and Joe Karbo with such stunning success, to whole new levels and, with the Internet, to whole new audiences.

Anyone who really knows about wealth creation knows that property and share trading are opposite sides of the same wealth creation cycle. They go round and round in waves, one side up, the other down, then vice versa. At the right time, as market conditions improve, it's property investment that offers the best returns. Then, as that market subsides, it's shares and options that begin to offer better returns.

What's happening now is that the cycle is getting shorter. The waves come faster. So the windows of opportunity are bigger, but much shorter in duration. You have to really know what you're doing to cash in on those cycles, then get out before the wave breaks.

But if you're a good spruiker, you can still make a fortune even after the wave passes from selling the tailings — the know-how, the picks and shovels and supplies — to the tail-enders... those "nervous nellies" who are too scared to ride the face of a wave, but can't resist joining all those eager, ignorant imitators wallowing in the wake of the latest wave, before finding themselves sucked out into deep water, way over their heads, by the unseen rips beneath those appealing waves.

Ever heard the expression "ripped off"?

As the old saying goes, "there's nothing new under the sun" and "gurus" are no exception. As long as people have been ignorant, anxious, greedy, lazy or gullible, there have been "gurus" willing to take their money from them. The trick lies in knowing how to sort the legitimate sellers from the snake-oil peddlars. And whilst ever legitimate sellers insist on mimicking the antics of sleazy snake-oil peddlars, they'll continue to be tarred with the same brush in the public perception.

Sincere regards, John Counsel http://johncounsel.net http://FREEcoachingonline.com Contact me at http://johncounsel.net/contact Skype: profitclinic

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