10 “Side Hustles” That Are Actually Pyramid Schemes
Not every side hustle is what it appears to be. You might come across some that look like simple ways to make extra money, but are actually designed to take money from you. They often use words like “freedom,” “residual income,” or “work from anywhere,” but the real goal is getting you to recruit others. You pay upfront, share big promises, and then try to earn by bringing more people in instead of doing something useful.
These setups are pyramid schemes. Here are the most common traps hiding behind the hustle.
Multi-Level Marketing Companies
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MLMs, such as Amway, Herbalife, and Monat, claim to offer business opportunities but are structured in a way that most participants earn little or nothing. A 2011 report from the Consumer Awareness Institute found that over 99% of MLM recruits lose money. The real profit comes from recruiting others, not selling products to outside consumers.
Envelope Stuffing Offers
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This one’s been recycled since mail was invented. Ads promise you’ll earn money from home by stuffing envelopes, but first, you have to pay for the instructions. Those “instructions” just tell you to post the same ad. There’s no employer, no envelopes, just an endless loop of people selling the same worthless guide.
Crypto Referral Schemes
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Rather than focusing on a legitimate cryptocurrency project, these schemes pay you for getting others to invest. OneCoin, a notorious example, defrauded investors of $3.8 billion globally before it collapsed. When income relies on a constant flow of new investors, and there’s no real market demand, it’s a textbook pyramid.
Online Academies That Sell Memberships
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Some online income “schools” say they’ll teach you how to earn through flipping content or digital marketing. But many make their money selling access tiers, coaching calls, or affiliate links. The real product is the school itself, and the only success metric is the number of new sign-ups you bring in.
Template Resale Schemes
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Courses that promise quick income from reselling Canva templates or digital dashboards tend to focus on the success story, not the reality. Most people end up offering identical products in a crowded market that doesn’t need more of them. When that happens, the real money usually comes from selling the course itself and encouraging others to try the same cycle.
Brand Ambassador Programs With Buy-Ins
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Some ambassador programs ask people to purchase a starter bundle before they can represent the brand. After that, participants are urged to bring in others who do the same. When most of the earnings depend on how many people you recruit rather than how much product you actually sell, the structure speaks for itself.
Paid Survey Membership Programs
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Survey gigs shouldn’t require payment up front. If a site asks for a membership fee before revealing available surveys, that’s a sign the money’s not in research but in collecting from eager applicants. The FTC has warned about these setups, where surveys are either nonexistent or pay pennies per hour.
Educational Platforms With Inflated Earnings Claims
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Tutoring and Q&A websites sometimes promote “up to $7,500/month” earnings, but the majority of users never reach that. In some cases, earnings depend on recruiting others or paying to access premium tiers. A platform focused more on enrollment than education is likely prioritizing its own growth over yours.
Business Coaching Programs That Teach Selling Coaching
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There are coaching programs that don’t help you coach anything—they just teach you how to convince others to buy the same program. The cycle looks more like a chain than a curriculum. When every coach is a student selling the same class, there’s no expertise—just a recruiting tree.
Referral-Only Digital Job Boards
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Referral-only sites often claim to offer app testing, form filling, or microtasks, but you’ll only get access after you bring in new users. These job boards don’t actually have companies hiring; the site itself is the product. Once growth stalls, there’s no money and no jobs left for anyone.