Should I invest in a gifting circle?

Thinking about joining a Gifting Circle? Read this first.

Caller: How much of a risk taker are you?

Me: I guess it depends on the situation.

Caller: Have you ever heard of a gifting circle?

Me: You mean a pyramid scheme?

To be honest, for a moment there, I felt kinda special.

I was one of the “cool kids” – after all, gifting circles are shrouded in secrecy. Invitations are only extended to those who are trusted to keep the secret.

And there’s a reason for that.

Gifting “circles” are not circles. They are pyramids.

They are fraudulent. They are illegal. 90% of the people who “invest” in them will lose their money.

And when you lose your money? The two friends you invited to participate in the circle will lose theirs too.

As a friend of mine, who “invested” (and lost) in one of these circles many years ago put it:

“It’s awkward. Facing the friends you convinced to lose their money.”

(Not familiar with pyramid schemes? This wikipedia article explains it: Wikipedia – Pyramid Schemes – the section on “eight ball model” describes a gifting circle.)

How do I know that the circle I’ve been invited to is a pyramid?

• They call it a “dinner party” – and the positions are appetizer, side salad, main course and dessert. Pyramid.
• They call it an “airplane” – and the positions are passengers, crew, co-pilot and pilot. Pyramid.
• They call it the “universe” – and the positions are stars, planets, moons and the sun. You guessed it. Pyramid.

Take a look at the diagram they provided. You are looking at a pyramid from the top looking down.

But, THIS ONE isn’t a pyramid – it really IS a circle!

It’s been going for over 20 years. The people who cash out always re-invest, so the money keeps circulating.

This might sound good, but the math doesn’t support it. The “circle” will end and people will lose.

Even if EVERYONE who ever made it to the top reinvested 100% of their windfall (unlikely) – every time the circle “splits” you need to bring in NEW people to support the growth.

This requirement is exponential – which means that each time the circles split, you need twice as many new people to keep the scheme going.

But it’s not about the money!

Often these circles are promoted as “women helping women” – or a spiritual or personal growth experience, rather than a fraud. Investing isn’t about the money, it’s about:

• Learning how to give and receive.
• Feeling the joy of supporting another woman financially.
• Taking a risk and learning to trust yourself.
• Activating the law of attraction and reaping abundance in areas other than this particular investment. (I “gave” to the circle…and immediately, my money came back to me through a different form.)

If you find yourself being drawn in, consider these questions (in addition to: can you afford to lose give this money?)

• Could you not learn about the joy of giving by contributing to charity or directly giving a financial (no strings attached, no expectation of a $40,000 windfall) gift to someone?
• Why the secrecy? If this is so awesome (and not illegal and not fraudulent and not unethical) – why not allow as many people to experience it as possible?
• Who started it? What was their motivation? (Hint: whoever started it placed themselves at the top of the pyramid – or centre of the circle, if you prefer – and cashed out first.)

There is nothing “abundant” about a pyramid scheme. It’s unsustainable.

Even if you get in early enough and manage to cash out – left in your wake will be a whole bunch of women who lose their “investment” – and the longer it goes on, the more people will lose.

Do you really want to be a part of that?