The story of a giant pyramid scheme that ensnared thousands of victims from 40 states took another step toward resolution today with the indictment of four men in Florida. Prosecutors say Unique Gems International of Miami charged people $3,000 for kits to make beaded necklaces, and allegedly promised to pay $60 for each piece assembled. Although the company took in some $90 million, most of the victims never got paid.

Stories like this can serve as a reminder to all of us that while many offers appear tempting, nothing's better for building a nest egg than time and patience. If something seems too good to be true... well, you know the rest.

The FOOL 50 followed the other market indexes downward today, losing about 2%.

In today's Motley Fool Take:

SEC Gets Pushy

The Securities and Exchange Commission today sped up the reporting time for public companies and insider stock trades, acting in response to legislation passed in July.

Companies with market capitalizations over $75 million must file their quarterly and annual reports faster in 2003, and even faster than that in 2004:

               Days to File in Calendar '02 '03 '04
After end of quarter (Form 10-Q)     45  40  35
After end of fiscal year

(Form You're Welcome, I mean 10-K) 90 75 60

Investors will also receive insider-trading news faster. Insiders and 10%-or-greater shareholders must file within two business days:

                        Current   New (Eff. Aug. 29)
Market trades       40 days   2 business days
Trades with company  1 year   2 business days

So is faster better? Not necessarily.

For the quarterly and annual reports, you could argue that what investors want is accuracy. Forcing speed only encourages mistakes, and reforms might be better targeted at accounting issues such as the failure to expense stock options. Frankly, if we've made a long-term investment, we don't think knowing the numbers five, 10, or even 15 days in advance should affect our investing decisions much, if at all.

But shorter time frames will address one gripe we have at The Motley Fool. Most corporations release their balance sheets and income statements in a huge PR flurry, but they withhold the more useful cash flow statement -- which they certainly have available, regardless of their whinnying -- until a quiet SEC filing some days or weeks later. While we doubt that shorter reporting times will mean more cash flow statements at press-release time, at least the wait will be less.

With insider trading, fast reporting matters a lot. First, no officer may trade when in possession of material, non-public information. But what's "material"? We don't want corporate mangers to be calling a press conference or dropping a bundle on a PRNewswire or Business Wire release every time an order comes in or one customer delays. We do want to know when, say, CiscIntSoft (Ticker: BIGG) becomes a customer of or cancels all orders with PunyCorp (Ticker: MINI).

Yet a manager who sees the day-to-day operations can draw conclusions about the business without necessarily knowing anything "material." Let's say she sees the sales people working round the clock and traveling all the time, while her competitor down the street has an empty parking lot filled with tumbleweeds. We'd like to know if she's buying. Insider sells, by themselves, are less revealing. An exec may have a house to buy or college tuition or a divorce settlement to pay, but if we see a lot of execs selling, that's telling. We ought to know that sooner than 40 days or a year into it. Now we will.

Quote of Note

"Far and away the best prize that life offers is the chance to work hard at work worth doing." -- Theodore Roosevelt, September 7, 1903

Size Doesn't Matter

Start early. Save often. Such are the keys to successfully saving for retirement. But it's not the size of your brokerage account balance that matters; it's the length of time that you spend building it.

According to a recent study (free registration), preparedness contributes more to peace of mind than net worth. The longer you've spent saving for the after-work years, the more comfortable you are, says the "Re-Visioning Retirement" report, sponsored by AIG Sun America.

So what constitutes "early"? It seems that 24 years of preparation is the defining number that separates those who are happy with their retirement savings status from those who are not. The least happy retirees, according to the study, had been saving an average of 11 years. So starting your savings regimen before age 40 can do wonders for your senior citizen psyche.

We'll venture to guess that establishing a pattern of saving -- instead of scrambling to do so at the last minute -- helps put money in perspective. Those who have fashioned a nest egg during good times and bad know that a market downturn doesn't mean the end of the world for their retirement dreams.

But when retirement is a distant goal, how do you motivate yourself to start a savings habit? How about dangling an official title and tantalizing prize? Take a cue from Fool Community member Moobey. She and her significant other developed a point system and tangible prizes to motivate themselves to maximize their retirement savings. They review their finances quarterly and assign points based on their finances. Points are awarded for brokerage balances, home equity, short-term savings. Points are subtracted for each dollar of debt.

Check out a page from her rulebook on the Eight Levels of Moguldom -- the final stage being $1 million in savings.

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Music Madness

The Recording Industry Association of America (RIAA) says CD sales are down 7% so far this year, and illegal Internet downloading is to blame. The RIAA, which represents most U.S. record companies, backs its claim with a study done by Peter D. Hart Research Associates.

In a nutshell, the study shows that by a two-to-one margin music lovers who say they are downloading more also say they are purchasing less. According to an RIAA press release, the research helps "decisively debunk the theory that stealing music online is somehow good for the music business."

Because the Hart research was commissioned by the RIAA, its findings must be viewed with a critical eye; its results are in direct contrast to most independent studies that indicate music downloading helps heighten interest and increases music sales.

It's difficult to pin down the exact reasons for the drop in CD sales. A Washington Post article points out, for example, that the video game industry now far outpaces the music business. That, along with other entertainment options, is "giving kids a lot of new places to spend money."

In addition, it's extremely hard to generate any sympathy for the RIAA. Instead of embracing -- and monetizing -- a new technology, it has fought music downloading every step of the way. It could have settled with Napster and made some decent money for its constituents; instead, it killed the popular download service, and now literally hundreds of others have sprung up in its place. Its own officially sanctioned download sites offer too little for too much, ensuring that the free, illegal sites will continue to proliferate.

In short, the RIAA has handled this situation badly from square one and nothing will improve for it until it embraces music downloading on a practical level, stops alienating music lovers with its litigious and arrogant attitude... and, perhaps, sees a change in top-level management.

Discussion Board of the Day: Napster

Do you think the RIAA is tackling the online music problem in the proper manner? What could it be doing differently? Let us hear your opinion on the Napster Discussion Board. Only on

Quick Takes

It seems that every time we get some bad economic news, it's followed by good news. (And then more bad news.) Today's good news: Orders for durable goods (like cars, computers, and aircraft) soared a strong 8.7% in July, representing the biggest jump in nine months. (Housing sales were up, too.) Here's the bad news: The Congressional Budget Office has once more "slashed its forecasts of government budget surpluses over the next decade" and sales at American chain stores fell during the first three weeks of August.

US Airways, mired in bankruptcy court, is seeking to void its labor agreements with some 18,500 mechanics, fleet-service employees, reservation agents, and ticket-counter workers, if it can't reach less costly agreements with them. The company is struggling to get its costs under control as it reorganizes. So far, pilots and flight attendants, among others, have made concessions.

Learning how the business world works is just as unappetizing as learning how sausages are made. According to The Wall Street Journal (subscription required, free trial available to Fools), Salomon Smith Barney, a unit of financial giant Citigroup(NYSE: C), has admitted that it funneled many "hot" initial public offering shares to bigwigs at WorldCom, one of its major customers. Many of these shares were "flipped" -- sold as soon as possible for a quick gain -- netting many executives more than a million dollars each.

According to Dataquest, global sales of mobile phones in the year's second quarter grew 0.8% over year-ago levels. Dataquest sees stability in the industry that is "positioned for stronger growth," and it expects consumers to upgrade to take advantage of new features, such as photo messaging and color-screen phones. It also predicts lower pricing for entry-level phones.

Global chip leader Intel(Nasdaq: INTC)expects "modest growth" in third-quarter earnings, but is offering the reassurance that it is continuing to invest in growing its business. Management said that when industry recommences its own investing, the chip business will pick up. In the meantime, Intel is cutting 5% of its workforce. The Fool's Rule Maker Portfolio recently announced that it will sell its Intel shares.

And Finally...

Today on What should we sell in the Rule Breaker Portfolio? Tom Jacobs applies some sell criteria he learned from Fool co-founders David and Tom Gardner.... Beating the market is by no means easy, but it can be done -- with the "index plus a few" strategy.... In Fool's School, are investment newsletters helpful?

Bob Bobala, Robert Brokamp, Tom Jacobs, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Jackie Ross, Reggie Santiago, Dayana Yochim