Cash Flow 101 Review – Very Expensive Ponzi Scam

No matter how much spare cash you have to invest, the last thing you want to look for is a Pyramid Ponzi scheme. If you've been invited to join Cash Flow 101, it's the exact kind that you should stay away from. The owner says it's totally legit because the joining fee is not a fee, it'll be treated as a tax-free gift. Well, that particular explanation makes it even worse, as bad as a Nigerian prince scam. The following Cash Flow 101 review will explain how it works and why you should avoid this scheme or any other similar types. Read on.

What Is Cash Flow 101?

Cash Flow 101 does not have any retailable product or service. It's a typical "Rob Peter to Pay Paul" scheme, requiring you to pay joining fees for nothing but falsely promises an unrealistic income provision. 

The lowest joining fee starts from "Level 2", $3,700 (Level 1 is listed on the sales page but doesn't seem to be available), and it promotes a notorious "one-up pay plan" which is not only considered as hard to achieve but is also considered unethical.

A new member is required to sign a form to falsely claim their joining fee as a "gift" for a tax evasion purpose. Not surprisingly, the scheme owner's identity is hidden.

How Cash Flow 101 Works

There are 5 levels of "pledges", i.e. joining fees you can choose from;

• Level 1: $1,500 + $100 Admin Fee = $1,600 Not currently available.
• Level 2: $3,500 + $200 Admin Fee = $3,700
• Level 3: $6,500 + $300 Admin Fee = $6,800
• Level 4: $9,500 + $400 Admin Fee = $9,900
• Level 5: $14,000 + $500 Admin Fee = $14,500

You must pay the pledge (main joining fee) and the admin fee separately. The pledge will be paid directly to your referrer, and the admin fee to the owner. 

The "one-up pay plan" is, to simply put, when you invite someone in for the first time, that person will send his pledge not to you but to your referrer. You'll start receiving money only from your 2nd referral. For example with level 2 ($3,500 + $200 admin = $3,700); 

• You just joined. You are out of pocket by -$3,700.
• You invite someone in. He/she must pay your referrer (You're still out of pocket by -$3,700.)
• You invite another person in. He/she will pay you $3,500. (Your balance will be -$3,700+$3,500 = -$200.)
• You invite the 3rd person in. He/she will pay you $3,500 (You'll start making a profit. Your balance will be -$200+$3,500 = $3,300.)

Now there are quite a few "red flags" - I'll list up the reasons you shouldn't join this scheme.

Claiming As "Gift" To Evade Tax

As you can see, the pledge payment is passed on from a new referral to a referrer directly. Cash Flow 101 encourages the members to fill out a relevant form to confirm the money you pay is a gift. Under the US tax law as of 2020, cash gift or goods gift of value up to $15,000 per financial year is exempt so you don't have to declare in your annual tax return form. 

But of course, that kind of excuse doesn't work - it's NOT a gift, you're paying someone you don't know the exact required amount as per the Cash Flow 101 scheme's rule. Just like an employer cannot randomly pay the employees in the name of a gift - there must be a special reason and there's a threshold - taxable allowance, otherwise. So this is clear tax evasion and it's illegal.

"No Product Or Service" Riddle

In one of the videos on the sales page, the owner says that Cash Flow 101 operates within the law, giving an example of "annual membership" for a golf club and Costco. The owner claims that if selling no product or service is illegal, every annual membership should be illegal because a membership itself is not a product nor service. I'm afraid his logic misses the point - golf clubs and certain supermarkets such as Costco already offer services/products and the membership is a privilege of the users. Whereas Cash Flow 101 really sells nothing retailable, therefore it's an illegal Ponzi scheme.

The Administration Fee Is Unclear

One thing that really doesn't make sense is the fact that the higher the level of pledge you choose, the admin fee increases correspondently. The owner doesn't disclose what the administration is involved in, but the fee is simply incremented by $100 probably means there's no reason and it seems unfair.

"One-Up" Plan Is Not The Way To Go

The whole idea of a "one-up" payment plan adopted by some multi-level affiliate marketing schemes is peculiar. In fact, I think it's wrong. Because everyone has their own unique strategies when it comes to promoting a product. You successfully get someone to spend money on something that you recommend, that's the result of your expertise and you should be rewarded for it. But with a "one-up" system, you won't get a commission for it. (You'll only start getting paid after you have two or more people to join in.) Your first referral's payment goes straight to the person above you, but those two people - your referral and your referrer - have no connection to each other or whatsoever. 

Likewise, if your referral successfully invites someone else in, the money will come to you, i.e. complete luck. If none of your direct referrals can find anyone, that's not your fault but you won't get extra money. All that sounds like a pointlessly unfair system to me.

Early Pledge Bonuses

If you pledge (pay to join in) within 48 hours of the invite, you'll receive a level upgrade plus some traffic (visitors) to your website;

• $3,500 level: upgrade to the $6,500 level plus 300 visitors.
• $6,500 level: upgrade to the $9,500 level plus 600 visitors.
• $9,500 level: fully quality at all levels plus 900 visitors.

The arrangement itself may sound like it's offering great bonuses, but you never know how responsive these visitors are. The Cash Flow 101 owner would have acquired from somewhere and it's very likely that he tried them already. If the visitors have already seen the CF101 sales page and weren't interested, then no point in promoting it to them again, unless you have different products to promote in hand. 

Another Red Flag - Cash Sent By Courier

In one of the sales page videos, a man is showing off a bunch of dollar bills freshly delivered to your house by FedEx.

First of all, we always say; if you see a bunch of cash, suspect black money. Why is this man having to get $9,500 in cash sent to him? Perhaps he can't have a bank account because he has a serious criminal record in the past such as money laundering. Likewise, the sender of this would have either been in the same situation or been requested to withdraw so much money from their bank.

If all this (i.e. Cash Flow 101) was legit, they shouldn't have any problem sending money via wire transfer. An international transfer fee wouldn't cost more than $25 or so. 

If you want to earn money legitimately, don't deal with cash, be transparent about your business with your bank!