Sou-Sou vs Pyramid Scheme

A Sou-sou is a group of people who agree to pool their financial resources, such as savings, by contributing to the pool on a regular basis. Pyramid schemes, on the other hand, take place when top-level members recruit new members who pay a fee up the chain.

Sou-Sou

A Sou-sou is a group of individuals who decide to pool their financial resources, such as savings, by making regular scheduled payments to the pool in an agreed-upon amount. These payments can be made once a week, twice a week, or once a month. The group’s pooled funds are subsequently distributed according to an agreed-upon schedule to each or selected members of the group. This distribution/payout plan is crucial because it guarantees that everyone in the organization gets their fair portion on time..

Pyramid Scheme

In a pyramid scheme, top-level members recruit new members who pay upfront fees to the people who enrolled them. New members will then recruit newer members, and a percentage of the fees they earn will be transferred up the chain as well. A pyramid scheme is a method of moving money from the bottom of an organization to the top.

Key Difference

The bulk of pyramid schemes make money through recruiting fees and rarely try to sell valuable goods or services. A real sou-sou, on the other hand, pools the funds of its members with a guaranteed agreed-upon payout schedule for each member, ensuring that everyone profits throughout the life of the sou-sou’s existence. 

Key Issue

Pyramid schemes aren’t meant to be long-term investments. It will only work if the bottom level (New Recruits) remains broader (in number) than the upper levels. The entire pyramid will collapse if the bottom level begins to decrease (fewer individuals are recruited). A pyramid cannot be sustained indefinitely or even for a long time due to simple mathematical rules. People who have donated their hard-earned money will eventually lose it somewhere along that pyramid.

Conclusion 

Sou-Sou and pyramid schemes are not the same thing. You should take not of anyone who asks persons to join a program in which they must pay money and recruit others in order to earn money should be taken seriously. This is the most obvious indicator that you’ve been lured into a pyramid scheme that will eventually fail. Do your homework before entrusting your hard-earned money to a scheme you don’t completely comprehend.

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