Are Make Money Online Courses a Scam?

Not all "make money online" courses are scams, but many are. The fastest way to tell them apart: does the person teaching make money by doing what they teach, or only by teaching it? If it's only the second, be careful.

That one question filters out most of the bad ones. Here's where it comes from, and what else to look for.

Who really got rich in the gold rush?

In 1848, gold was found in California, and hundreds of thousands of people rushed there to get rich. Most of them never did.

The first millionaire of the gold rush wasn't a miner. He was a shopkeeper named Sam Brannan. When he heard about the gold, he bought every pick, shovel and pan he could find. Then he walked through the streets of San Francisco with a bottle of gold dust in his hand, shouting about the discovery. When the crowds came, he was the one with the tools. He bought pans for 20 cents and sold them for $15.

Brannan didn't need to find gold. He only needed other people to believe they would.

A big part of the "make money online" world works the same way. The money isn't in the method they sell you. It's in selling the method to you.

How can you tell a good course from a bad one?

Use an idea from the writer Nassim Taleb, who wrote a whole book about it called Skin in the Game. His point is simple: trust advice from people who win or lose depending on whether that advice works.

A surgeon who has operated thousands of times has skin in the game. Someone teaching "how to get rich with an online store" who has never run a profitable store doesn't. If a method stops working, the surgeon pays for it. The course seller still gets paid.

So before you buy, ask: does this person make money doing the thing, or only teaching it? Then look for these warning signs:

• Screenshots and luxury as the main proof. Cars, beaches and income screenshots show what they have, not what you'll get.
• Pressure to buy now. "Only 15 spots left" or "the price goes up at midnight". A good course doesn't need to rush you.
• A "secret system". If they can't explain in simple words what you'll learn, there's usually not much to learn.
• Promises of easy, fast or passive money. Real businesses are none of those, at least not at the start.

This isn't paranoia. In the United States, the FTC, the government agency that protects consumers, took action against an online course company called Lurn. It told people they could become "stay-at-home millionaires" and that they could fail 98% of the time and still make $11,453 a month. The company made more than $65 million selling those programs, very few buyers actually made money, and it had to pay $2.5 million in refunds.

And the good courses? They usually teach one specific skill, like video editing or bookkeeping. The teacher shows real work, including what didn't go well. The price makes sense for what you get. And they don't promise how much you'll earn, because they know it depends on you.

What's the difference between "easy money" and a real online business?

Easy money promises are fast and straight: buy the course, follow the steps, and in 30 days you're earning. Real online businesses grow in a completely different shape.

For a long time, they look flat. You build things that make little or nothing. You learn, you fix, you try again. Then, slowly, what you built starts to add up: people who know you, products that keep selling, skills that make every new project faster. That's what compounding means: growth that builds on top of the growth you already had.

Take Pieter Levels, one of the best-known independent founders online. In 2014 he challenged himself to launch 12 small businesses in 12 months. Most of them went nowhere. One of them, Nomad List, became a real business. Since then he has built more than 70 products, and by his own account the large majority failed. The few that worked are what you see today.

What does it really take to make money online?

There's no secret, just less glamorous ingredients:

• Time. Usually years, not weeks.
• Failed attempts. Most first projects don't work. That's part of the process, not a sign to quit.
• A real skill. Something people pay for, that you keep getting better at.
• A way to reach people. An audience, or the online communities where your buyers already are. I explain that part in How to Find Clients on Reddit and Facebook.

A good course can help you learn a skill faster. No course can skip the time. If someone is selling you the shortcut, ask yourself who's really finding the gold.

Sources

• The 49ers and Sam Brannan (Bill of Rights Institute)
• FTC action against online business coaching company Lurn (FTC)
• Lurn settlement details (State AG Report)
• Nomad List founder (Pieter Levels)