Today the terms Ponzi scheme and pyramid scheme are often used to mean the same thing. However, there is a slight difference.

A true Ponzi scheme usually promotes what appears to be a real investment opportunity which investors may contribute to without actually being an affiliate, distributor, and etc. A pyramid scheme, on the other hand, usually requires that participants make a payment for the right to recruit other people into the scheme, at which point they will receive money. They have no real product, the only real money being is the entry fee.

That’s why, when you are considering any investment, online or offline, a good product is one of the key criteria you should look for.

At the end of the day, this is splitting hairs a little. All you need to know is that people lose money in either of these schemes. Avoid them like the plague. Evaluate your business opportunities in a logical manner – and pay particular attention to the product or range of products being offered – and you will easily avoid being caught up in one of these illegal schemes.