Many people are setting out their financial goals for the coming year and are curious about a growing phenomenon in the home business market place, cash gifting, as a means of achieving their financial goals.
There are some very good cash gifting schemes available and there is a lot of curiosity at present as to how to differentiate between the legal and non-legal and how the legal schemes work. Especially in today’s economic climate.
The purpose of this brief article is to lay out an overview of the differences between the legal and illegal schemes and how legal cash gifting can and does create wealth in a short period of time for those who take part.
First of all then what are the illegal schemes?
Any scheme that promotes a ladder type system, you know the type ‘How to turn $25 into $250 in less than two weeks’. This is where you are given a piece of paper and send $5 to each of the five names on the list, removing the top one and adding yours to the bottom. The theory being all you have to do is sell, or even give FOC, that letter on to number of your friends and family only for untold thousands gift you some of their money. The problem with these schemes is that you have to more than the world’s population just to keep the cycle working. It just takes one person to not send the cash and the whole thing falls apart. As so many people have lost money in these schemes most governments ban them.
Secondly I want to look at the legal schemes.
A good cash gifting scheme does not operate the same way, there are basically two types of scheme in the market, both have their merits. There is the 1-up system, this is where you gift your mentor some money to access the system and then you gift the first person who agrees to join you.
In the second system, there is no sacrifice of the first member you sign up instead you pass over to your mentor a portion of gifts received from everyone who joins you and gives a gift to you.
In return your mentor is supposed to show you how to effectively invite people to the cash gifting program. This can be done in numerous ways. As long as you have a steady stream of people being invited there is a steady stream of cash! Once people have seen the website and sign up, now they start to provide cash for you also. It really is that simple and easy!
There is no selling involved, it is not an MLM or Pyramid scheme, all you have to do is attract people by one of a multitude of ways to visit your web site (usually provided by the main company) and let them find out for themselves by studying the WEB site if this scheme is right for them.
There are no products to sell, so there is no selling. Since this is not a business, and the cash comes with documents stating it is a lawful gift and nothing is expected in return, there are no taxes unless over 1 million dollars or more has been gifted to you over the course of 1 year. Check IRS Publication 950 for more information on the gifting tax laws. Although I am not a financial advisor and I recommend that you discuss this with one or a tax advisor if you want to stay on the right side of the IRS.
Your mentor must be dedicated to your success if you are to stand a chance of making cash gifting work for your benefit. The company itself must offer you in-depth training and provide you with the tools necessary to ensure your success.
Especially in the 1-up schemes as there is a tendency to only hold an interest in a person until they have met their obligation to the mentor. That is gifting them in the first place and passing the first gifter they have recruited up to them.
This is short sited for the basis of these gifting programmes is to give without considering a return. If a mentor is worthy of the name they will show you how to develop your market on a number of fronts so that you build an adequate number of visitors to your site every month. This activity is like a snowball once it builds momentum you cannot just switch it off it takes on a life of its own making your role more passive than active over a period of time.
One of the major ethical players in the market has just launched a new series of important steps to their programme. At one time they only offered a 1-up system, now they offer the residual system also; in addition they have launched their random gifting scheme called PIF.
With PIF you can receive a random gift, value between $10 and $1000, without any activity on your part. What is more the level of the gift is not dependent on the level of you standing in the company, a person on an entry level of $75 can receive a random gift of up to $1000.
