Speaker 1: Welcome to How the Money. I'm Joel and I and Matt,
Speaker 1: and today we're discussing the broken promises of m l
Speaker 1: m s, the broken promises of multi level marketing companies. Joel,
Speaker 1: I feel like that's the perfect name for this episode, because,
Speaker 1: like we're going to talk about, not all MLMs are bad,
Speaker 1: you know, like there there definitely are some that are
Speaker 1: more pyramid scheme ish, but there are also some companies
Speaker 1: that are pretty legit companies that we've heard of. But
Speaker 1: what's often the cases that there are a lot of
Speaker 1: promises made, a lot of you know, people get their
Speaker 1: hopes up and they think they're going to be able
Speaker 1: to achieve something that they aren't actually able to achieve.
Speaker 1: Those are the broken promises. And so that's why we
Speaker 1: wanted to dedicate an entire episode two MLM's because pause
Speaker 1: of those broken promises. Yeah, there's a lot to talk
Speaker 1: about here, that's for sure. And like you said, like
Speaker 1: some of these companies, some people make money selling product
Speaker 1: for multi level marketing company, but most people don't. Most
Speaker 1: people experience the ill effects the the broken promise side
Speaker 1: of mlm s. And so yeah, we got a lot
Speaker 1: to talk about today on the show, Matt. Yeah, real
Speaker 1: quick though, before we get started, I wanted to to
Speaker 1: share a quick little tip for folks, especially as individuals
Speaker 1: are working from home more these days. I can't remember
Speaker 1: if we've talked about this on the show, but have
Speaker 1: we talked about my noise dot nets? I don't think
Speaker 1: that's like, so this is the site where I like
Speaker 1: Matt's noise dot net or my personal noise, But this
Speaker 1: is a site. This is a tab I keep open
Speaker 1: all my browser seven like. I use it every single day,
Speaker 1: and it is a white noise generator. And actually a
Speaker 1: listener can't remember their name, but someone wrote in and
Speaker 1: they shared the site with us because we were talking about,
Speaker 1: you know, finding ways to to keep from being distracted
Speaker 1: while we're working at home. And here's why I love
Speaker 1: this one specifically so much, man uh. Specifically, they have
Speaker 1: this one sound it's called Irish Coast and it has
Speaker 1: all these different sliders where you can adjust the different
Speaker 1: sounds on the Irish Coast, so you can adjust the
Speaker 1: amount of like wind noise, the babbling little water bagpipe rain. Yeah,
Speaker 1: there's no bagpipe. I guess i'd be the Scottish coast.
Speaker 1: Maybe that's true. But the Irish Coast made It's so
Speaker 1: stinking good, and I kind of realized how dependent on
Speaker 1: it I've become. It's just become so much a part
Speaker 1: of my day. You know, even when you're down here
Speaker 1: and we're both working, I just pop them in sometimes,
Speaker 1: but I don't want to hear you over there, like
Speaker 1: tapping on your keyboard, you know, double clicking with your
Speaker 1: mouse tap loudly. I'm sorry about that. I realized that
Speaker 1: any of those sounds can distract me, and so I
Speaker 1: don't I wanted to share this with our listeners if
Speaker 1: they are having a tough time focusing while they're working
Speaker 1: at home. So you might be able to block out
Speaker 1: my sounds, but can you block out the faces I'm
Speaker 1: making at you from across the room. That's why we
Speaker 1: have a solid partition up between us. That's what you're
Speaker 1: gonna build next, I'm sure, said the office we're shunning
Speaker 1: up created barrier exactly. Sometimes it's necessary for me, I'm
Speaker 1: you know, I get excited and I just want to
Speaker 1: say hi, yeah, yeah. I wanted to mention that for
Speaker 1: our listeners. There's this other one I actually discovered two
Speaker 1: It's called uh seven forty seven I found this one
Speaker 1: on Amazon Music. You and I we both love Amazon Music.
Speaker 1: And if you if you google seven forty seven White Noise,
Speaker 1: it'll pull up this track and you can put it
Speaker 1: on repeat on loop. It sounds just like you're sitting
Speaker 1: on an airplane, like flying to the West Coast, you know,
Speaker 1: or vice versa. That would put me to sleep. That's
Speaker 1: the problem with some of those. Really. I like how
Speaker 1: it helps some people and and hopefully some people out
Speaker 1: there will you listen to your Irish Coast noise and
Speaker 1: it'll help them be more productive. For me, it would
Speaker 1: make me want to take a nap. I would I
Speaker 1: would need to be drinking like some coffee while I'm
Speaker 1: listening to that and working, because yeah, I would just
Speaker 1: kind of want to lay down on my keyboard and
Speaker 1: zonc out for a little bit. I will say, if
Speaker 1: I had a weighted blanket, you know, I could do
Speaker 1: the seven forty seven with a weighted blanket for the
Speaker 1: first fifteen minutes. Because for me, anytime I get on
Speaker 1: a plane, I always take that that quick power nap
Speaker 1: at the very beginning, like when you take off, because
Speaker 1: when you during lifts off, you feel that increased weight
Speaker 1: and something about that's for me, it's super comforting. Yeah,
Speaker 1: I pass out during take off and then about fifteen
Speaker 1: minutes later I always wake up. But but in the
Speaker 1: same way, I think there's a lot of folks who,
Speaker 1: you know, when they hear that sound of the seven
Speaker 1: forty seven jets kind of roaring in the background, it
Speaker 1: kind of puts them in that business state of mind.
Speaker 1: A lot of people actually aren't on planes these days,
Speaker 1: so they might even kind of miss that sound, you know.
Speaker 1: Good point. Yeah, we'll link to both of those in
Speaker 1: our show notes, by the way. Alright, cool, cool, alright, Well,
Speaker 1: let's get onto the beer that we're having on the
Speaker 1: show today, Matt. This one's called Double Up and it's
Speaker 1: a West Coast I p a by Monday Night Brewing
Speaker 1: in conjunction with Cascade Brewing, one of our favorite breweries
Speaker 1: on the West Coast. Speaking of West Coast, East Coast, exactly.
Speaker 1: A nice little team up there on this one. We'll
Speaker 1: give our thoughts on this particular beer at the end
Speaker 1: of the episode, but for now, Matt, one of the
Speaker 1: subject at hand. We're talking about the broken promises of
Speaker 1: MLMs of multi level marketing companies not too long ago, Matt.
Speaker 1: We had an interesting chat with Ben Carlson about his
Speaker 1: book on the history of scams, and I feel like
Speaker 1: he shared some really fascinating stories of some really crazy
Speaker 1: scams that have happened in the history of our country.
Speaker 1: But but those rip offs aren't necessarily confined to prior decades.
Speaker 1: We're seeing a lot of like scams and and pyramid
Speaker 1: schemes proliferating now, and multi level marketing companies are actually
Speaker 1: like praying on people, I would say, in more severe
Speaker 1: ways right now, which means that people are often losing
Speaker 1: money they can't afford to lose because of a nifty
Speaker 1: pitch that sounds pretty great, And I feel like the
Speaker 1: people that are most at risk of signing up to
Speaker 1: to sell something for an MLM company are the people
Speaker 1: who oftentimes are financially suffering. Maybe they've lost a job,
Speaker 1: they've been furloughed, they're looking for ways to make extra income,
Speaker 1: and the MLM pitch comes along, and it's like, that
Speaker 1: sounds really nice. Maybe I can make some side income.
Speaker 1: Maybe signing up and selling stuff for this MLM company
Speaker 1: can actually help me with with some of the missing
Speaker 1: income from losing my job. Might even say, oh, this
Speaker 1: is a blessing in disguise. Now I can pursue my
Speaker 1: MLM dreams building my own business, right, yeah, exactly. And
Speaker 1: pyramid schemes they've always been bad. They're actually they're illegal, right.
Speaker 1: But at the same time, there are legitimate mL ms
Speaker 1: out there, but a lot of these end up taking
Speaker 1: a lot of your time and money and never actually
Speaker 1: giving people any sort of real income in return. Mat
Speaker 1: I think the most fascinating stat that I've ever read
Speaker 1: about MLMs, the FTC, the Federal Trade Commission, actually reports
Speaker 1: that less than one percent of MLM participants actually end
Speaker 1: up making money. And I feel like that says it
Speaker 1: all right there. If you're looking for the needle in
Speaker 1: a haystack, if you think you're the only one that
Speaker 1: can make money in an MLM, maybe it's true, but
Speaker 1: the chances, the statistics point to the fact that it's highly,
Speaker 1: highly unlikely. Dang dude. So if anybody is going to
Speaker 1: turn off the podcast, now you know, don't do that,
Speaker 1: But do know that you need to be in the
Speaker 1: one percent if you're gonna you know, make any money
Speaker 1: at all. Enjoy Like you mentioned, you know, these are
Speaker 1: companies that we're dealing with now, you know, like we're
Speaker 1: not just talking about companies from the fifties, you know,
Speaker 1: like Tupperware back when they used to have their Tupperware parties.
Speaker 1: A lot of us have have had that pitch from
Speaker 1: my friend or even you know, a pitch on social
Speaker 1: media from someone we haven't talked to in years. There
Speaker 1: has been a recent resurgence of influencers pushing MLMs in
Speaker 1: a sense they've kind of modernized, you know, along with
Speaker 1: the technology that we have today. And you also mentioned
Speaker 1: as well that another reason that we are seeing these
Speaker 1: on the rise is because people are in more desperate times.
Speaker 1: You know, when you have lost your job or you're
Speaker 1: earning a lot less than used to, you're looking for
Speaker 1: any way to to make additional income. You're looking for
Speaker 1: ways to replace your income. And if you get an email,
Speaker 1: you know, saying that hey, if you you know, pitching
Speaker 1: some money to do this thing, or send this email
Speaker 1: or send this letter to a bunch of other people,
Speaker 1: that kind of get your hopes up. And so it's
Speaker 1: no wonder we've seen the spread. And so that's one
Speaker 1: of the ways we've seen MLMs grow due to the pandemic.
Speaker 1: But there have also been false health claims that different
Speaker 1: companies have made the FDC. They also stand out some
Speaker 1: letters in April to to tend different MLM companies that
Speaker 1: were making false claims in regards to how their products
Speaker 1: were going to protect people against the coronavirus. Right, And
Speaker 1: so not only is it false statements against how individuals
Speaker 1: might be able to earn a bunch of money, but
Speaker 1: they're taking advantage of people when it comes through this
Speaker 1: health crisis as well. And unfortunately a lot of the
Speaker 1: folks who we're seeing taken in by these MLM are women.
Speaker 1: Many MLMs are based around women's clothing and beauty products,
Speaker 1: you know. And this isn't to say that men don't
Speaker 1: also lose money through MLM involvements. Pretty Much everyone who
Speaker 1: is involved in MLM is losing money. And just like
Speaker 1: you said, one percent of folks are the ones who
Speaker 1: are making money. That means of individuals who are involved
Speaker 1: are losing money. And that doesn't even include the amount
Speaker 1: of time that they're putting towards us as well, just
Speaker 1: the money. Yeah, and all the extra Lulu Roe pants
Speaker 1: that are left over in the garage after the fact too. Right,
Speaker 1: So let's talk about kind of the definitions, But what
Speaker 1: constitutes an m l M versus a pyramid scheme, because
Speaker 1: we're gonna kind of be talking about both in this episode.
Speaker 1: M l M s are our organizations that are focused
Speaker 1: on selling a legitimate product, but pyramid schemes are actually
Speaker 1: solely focused on recruiting other members. And so MLMs and
Speaker 1: pyramid schemes they've got a lot in common. It's actually
Speaker 1: kind of hard to tell them apart, especially you know,
Speaker 1: on on their face. So when you're beating pitched something
Speaker 1: by a friend or a family member or uh, somebody
Speaker 1: that you used to know back in the day, and
Speaker 1: they've sent you a Facebook message, it's really hard to
Speaker 1: know what you're getting into. Are you getting into business
Speaker 1: with a company that is selling legitimate products or are
Speaker 1: you getting into a system that forces you to actually
Speaker 1: recruit more people in order to make the majority of
Speaker 1: your earnings. And if that's the case, you're involved in
Speaker 1: a pyramid scheme. And and that's because recruiting in in
Speaker 1: many of these systems is actually how the big money
Speaker 1: is made. You might be able to make a little
Speaker 1: bit of money if you work really really hard selling
Speaker 1: the product, but you're gonna make way more by recruiting
Speaker 1: more people to be underneath you, to start paying fees,
Speaker 1: and to start buying more product. It's important to know
Speaker 1: that that it's just incredibly hard to tell the difference
Speaker 1: when you're receiving that pitch. And that's why, you know,
Speaker 1: we're not fans of either. Obviously, pyramid schemes are illegal,
Speaker 1: but MLMs are close enough for the most part that
Speaker 1: we think it's a bad idea to participate in m
Speaker 1: l m s pretty much altogether too. And so maybe
Speaker 1: a good question for us to answer, right, uh, is
Speaker 1: why do people participate in these MLMs. There are some
Speaker 1: benefits and promises that MLMs make do make them attractive,
Speaker 1: and one of the biggest promises is huge returns with
Speaker 1: minimal efforts. I'm a big fan of minimal effort, you know,
Speaker 1: Like what's more enticing than that just doing nothing and
Speaker 1: perceiving a lot of money. You know, I'd be all
Speaker 1: about doing that if if I could. But there was
Speaker 1: a recent thread in our Facebook group and listener Jill
Speaker 1: she mentioned that it has been quote seriously, blood, sweat
Speaker 1: and tears unquote to make an average of two thousand
Speaker 1: dollars a month. You know, like that's what you don't
Speaker 1: hear in these different presentations, these these pitches, these videos
Speaker 1: are are in a chat that you have with a
Speaker 1: friend who is trying to get you involved. You know,
Speaker 1: imagine if Jill had taken the standard approach and just
Speaker 1: tossed up some social media posts, you know, she wouldn't
Speaker 1: be making any money, which is the case for the
Speaker 1: vast majority of MLM participants, and she'd probably be in
Speaker 1: debt too, because typically you gotta buy the stuff up
Speaker 1: front in hopes that you're gonna sell it right and
Speaker 1: hopes that you're gonna make some sales and start generating
Speaker 1: that business, when many people don't exactly. Yeah, that's one
Speaker 1: of the red flags to look out for. So you know,
Speaker 1: we're gonna get into a little MLM history and we're
Speaker 1: gonna cover some of the specific ones to watch out for,
Speaker 1: and then later on we're we're going to discuss alternatives
Speaker 1: to m l m's and we'll get to all of
Speaker 1: that right after the break. All right, Matt, we're back
Speaker 1: from the break. And I think anybody that's been listening
Speaker 1: so far can tell that you and I were not
Speaker 1: a big fans of MLM. We're not, uh and It's
Speaker 1: something that kind of keeps coming in my mind when
Speaker 1: I think about MLMs and pyramid schemes. You've seen Garden State,
Speaker 1: of course, remember that one. It's been a long time,
Speaker 1: a long time ago, but you know that scene where
Speaker 1: they go in the store and they see like an
Speaker 1: old friend from high school and he's like, hey, I
Speaker 1: would like to talk to you both about a great
Speaker 1: opportunity you and your loved ones. That's when you run
Speaker 1: away or when someone says you're a naturally energetic person,
Speaker 1: I feel like you do great in this small business
Speaker 1: that I'm a part of, Like I'd love to talk
Speaker 1: to you about these opportunities available to us. That's when
Speaker 1: you know you're getting pitched right exactly. And and I
Speaker 1: can anybody make money in an MLM? Sure, Like I
Speaker 1: think a small, small, probably one percent of people can
Speaker 1: make money in an MLM, And especially if you have
Speaker 1: kind of some natural tendencies, if you've always been a
Speaker 1: good salesperson or just naturally great at starting up conversations
Speaker 1: with strangers, you can potentially make money in an MLM.
Speaker 1: Even if that's the case, though, there's still a lot
Speaker 1: of downsides too to watch out for, and some things
Speaker 1: to be wary of before you decide to go the
Speaker 1: route of an MLM as opposed to a traditional business,
Speaker 1: because those skills can make you money inside of a
Speaker 1: traditional job. With those skills in m l M isn't
Speaker 1: necessarily going to make you more money than you can
Speaker 1: make elsewhere. But Matt, let's talk about the history of
Speaker 1: m l m s, and let's talk about some of
Speaker 1: the more predominant ones that people might hear about or
Speaker 1: might be asked to join. Maybe right now, all right,
Speaker 1: time for a little history. Man. You mentioned Ben Carlson
Speaker 1: at the beginning of the episode our interview with him
Speaker 1: a few weeks ago. He called Charles Ponzi the godfather
Speaker 1: of the financial scams genre. In the Ponzi scheme and
Speaker 1: in pyramid schemes today are incredibly similar. About a hundred
Speaker 1: years ago, he promised returns on your money in ninety
Speaker 1: days by investing in foreign stamps. That sounds kind of weird,
Speaker 1: but you know this was the early nine hundreds, uh,
Speaker 1: and it was a different time back then. If someone
Speaker 1: were to pitch me something saying I was gonna make
Speaker 1: lots of money on postage stamps right now, I look
Speaker 1: at him like they were crazy because they probably would be,
Speaker 1: but people believed them, you know. Uh, And ultimately people
Speaker 1: send him millions of dollars based on these promises alone.
Speaker 1: And you know what getting involved in that. That scheme
Speaker 1: of his was open to everyone. He didn't discriminate. Rich
Speaker 1: politicians and poor immigrants alike lost their money. The Boston
Speaker 1: Post ended up running the math and they uncovered the
Speaker 1: impossibility of his claims. And so that's how pyramid schemes
Speaker 1: got started and how they happened today. Uh, someone promises
Speaker 1: incredible and impossible returns to unsuspecting victims, and they almost
Speaker 1: always spend the money to build up their own lavish lifestyle.
Speaker 1: You know, we're talking about yachts, sports cars, fancy trips,
Speaker 1: that kind of stuff. Ponzi was no different. You know,
Speaker 1: he bought a main and as well as the fanciest
Speaker 1: car of this day. So just because Ponzi was a scam,
Speaker 1: owners doesn't mean that all MLM offerings are scams. Though.
Speaker 1: So let's make sure we discuss some of the you know,
Speaker 1: more popular MLMs that are actually you know, kind of
Speaker 1: legitimate businesses. Lets do it, yeah, Um and Matt, there
Speaker 1: are certainly a few that people are familiar with. Although
Speaker 1: before we get to kind of some of the more
Speaker 1: popular ones, there's kind of like a scheme playing on
Speaker 1: some of these principles that's going around right now that
Speaker 1: people seem to be falling forward. It's called the Susu method.
Speaker 1: And sometimes the Susu is done with friends or family,
Speaker 1: and it can be if it's done in a particular way,
Speaker 1: just kind of this forced method of savings. But it's
Speaker 1: an odd way to do it. It's where people pull
Speaker 1: their money and a different group member receives that payout
Speaker 1: each month. Even when you're doing that with trusted friends
Speaker 1: and family, I don't think it's a good way to
Speaker 1: do things. I think there are better ways to save
Speaker 1: your money. You don't have to pull it trusting that
Speaker 1: that money is going to come back to you at
Speaker 1: a future date. Right. But just like so many other MLMs,
Speaker 1: people are using personal relationships to exploit others for profit.
Speaker 1: Under the su Su scheme, they're using trust to leverage cash.
Speaker 1: And and here's kind of how it works. In the
Speaker 1: more nefarious ways. You put in a set amount of
Speaker 1: money every month along with maybe like ten to fifteen
Speaker 1: others in this SUSU group, let's say it's five bucks
Speaker 1: and you all venmo or PayPal. The ringleader who is
Speaker 1: promising that you're gonna make a heck of a lot
Speaker 1: more in returns in the coming months than what you're
Speaker 1: putting in. You're told that oftentimes it's gonna be eight
Speaker 1: to ten times your initial investment. And then you see
Speaker 1: the testimonials those promises, right, the promises that will soon
Speaker 1: be broken, saying that it's gonna be gravy and you're
Speaker 1: gonna make good money, and that this is the best
Speaker 1: method to see a return on your money. And and
Speaker 1: then it never appears and people are out the money
Speaker 1: they put in. And yeah, the rising popularity of this
Speaker 1: one in particular is something that that we wanted to
Speaker 1: mention because a lot of people are falling for it
Speaker 1: assuming that because they're invited by a friend or family
Speaker 1: member that they can't lose money and that everything is
Speaker 1: gonna be okay, and most people are losing all the
Speaker 1: money that they put in. Yeah, and and so by
Speaker 1: that definition, this isn't necessarily MLM. This isn't, you know,
Speaker 1: multi level marketing company. This is pretty much a Ponzi scheme.
Speaker 1: You know, this is a pyramid scheme and it's also
Speaker 1: known as a blessing loom or a gifting circle. But
Speaker 1: because there are no products involved here, it is straight
Speaker 1: up something you want to avoid. Yeah, and basically to participate,
Speaker 1: I feel like you have to suspend your belief in reality, right,
Speaker 1: that what you put in is going to come out
Speaker 1: tenfold or something like that. I mean, that's just not
Speaker 1: how things work. But oftentimes the people that are hurting
Speaker 1: the most, they want to believe in something like this,
Speaker 1: and that's why people participate, and that's why some of
Speaker 1: these schemes are are so bad. Yeah, that's right, And
Speaker 1: so let's let's talk about an actual MLM. Let's talk
Speaker 1: about lu La Row. There's a podcast that only talks
Speaker 1: about MLM is called The Dream and they actually go
Speaker 1: pretty hard after lu La Row and rightly so. They
Speaker 1: are a woman's apparel company that is known for colorful
Speaker 1: patterns and prints. But for women to get started selling
Speaker 1: lu La Row, you need to come up with closest
Speaker 1: six thousand dollars in order to buy inventory. You know,
Speaker 1: there are lawsuits right now, you know, from customers claiming
Speaker 1: that the clothing is defective and that the returns aren't
Speaker 1: being accepted. Uh. This is always a warning sign of
Speaker 1: an unhealthy MLM UH and returning unsold inventory is almost
Speaker 1: impossible or it comes with some insane fees if you
Speaker 1: are participating. There are actually quite a few lawsuits pending
Speaker 1: right now against lu La Row. And so while lu
Speaker 1: La Row isn't necessarily a pyramid scheme right like, technically
Speaker 1: it is an MLM because they actually do sell products,
Speaker 1: but because of the insane fees, the upfront costs involved
Speaker 1: with purchasing inventory, just the poor business model, it's something
Speaker 1: that we would completely recommend for folks to stay away from.
Speaker 1: And historically we've seen a lot of their customers be
Speaker 1: like homemakers, a lot of military wives as well are
Speaker 1: or used to be at least big into lu La Row. Yeah,
Speaker 1: lu La Row one of the worst. Uh. Matt Mary
Speaker 1: Kay is another big name in the MLM world. It's
Speaker 1: actually the sixth largest MLM company out there. And Pink
Speaker 1: Cadillacs were kind of their calling card. They kind of
Speaker 1: bond a generation of people who got interested in selling
Speaker 1: makeup from their home. That to me, that just sounds
Speaker 1: like the nineties. I remember just like riding around in
Speaker 1: the car with my parents you know, and Augusta and
Speaker 1: there's like, you know, these pink little Cadillacs driving around
Speaker 1: or you know, big Cadillac spement and you know what
Speaker 1: those people are up to. Those beauty consultants were making
Speaker 1: money selling products to their friends and neighbors and as
Speaker 1: well as as they're making a cut of the sales
Speaker 1: from their recruits. So has these elements of direct sales,
Speaker 1: but also this element of recruiting in order to make
Speaker 1: profit too. Again, whether people were successful or whether people
Speaker 1: got burnt in a big way, it's really easy to
Speaker 1: find people writing or making YouTube videos about their experience,
Speaker 1: and that makes Mary Kay similar to so many other
Speaker 1: mlm s. People are willing to publicize their involvement and
Speaker 1: how it went down. Of course, some people did make money.
Speaker 1: I got a sweet pink Cadillac out of the deal,
Speaker 1: but that was essentially at the cost of so many
Speaker 1: other people going into debt and similar to Lulu Row,
Speaker 1: with a ton of inventory on hand that they couldn't
Speaker 1: get rid of. But Mary Kay is is just such
Speaker 1: a high profile example of an MLM. But it's not
Speaker 1: really all that different in regards to how it functions
Speaker 1: or in regards to to the results that people have experienced. Yeah,
Speaker 1: Herbal Life that they are another major MLM. They actually
Speaker 1: had to mail checks Toto individuals as a result of
Speaker 1: a settlements with the FTC that was part of a
Speaker 1: two million dollar fine, And essentially they had to do
Speaker 1: this because they were considered basically a pyramid scheme in
Speaker 1: which participants made far more money recruiting than actually selling product.
Speaker 1: You know, this is another example of having to buy
Speaker 1: thousands of dollars of inventory upfronts, which should be a
Speaker 1: red flag to a lot of individuals. Norwix they're another example.
Speaker 1: Technically they're not a pyramid scheme because they do sell products,
Speaker 1: but they do rely heavily on recruiting. And that's unfortunately
Speaker 1: when things start to sour a little bit, because recruiting
Speaker 1: like that is the essence, like that is the core
Speaker 1: of a pyramid scheme, and MLM's basically like they're they're
Speaker 1: taking aspects of a pyramid scheme like that recruiting aspect, uh,
Speaker 1: And when it becomes more and more a part of
Speaker 1: their business model, like that's when they start getting in
Speaker 1: trouble with the FTC. Yeah, Matt, And that goes back
Speaker 1: to kind of something we discussed right at the beginning,
Speaker 1: is is that it can be hard to this cipher
Speaker 1: whether a company is an m l M or whether
Speaker 1: it's more of a pyramid scheme. And some of these
Speaker 1: companies that claim that they're legitimately multi level marketing, well
Speaker 1: sometimes it doesn't stay that way, and companies find themselves
Speaker 1: in big trouble and the people that we're working for
Speaker 1: that MLM find themselves in dire straits. So I think
Speaker 1: this brings up to Matt, what if you have a
Speaker 1: friend who's working for an MLM, what should you say
Speaker 1: to them? How should you react? And I think that
Speaker 1: can be a hard question, you know, depending on how
Speaker 1: well you know the person. If it's someone kind of
Speaker 1: out of the blue, it's easier just to kind of
Speaker 1: ignore that Facebook message or politely decline the phone call.
Speaker 1: But if you see them in person, it can be
Speaker 1: really difficult rite and they might try to sell you
Speaker 1: something or bring you on board. And I think it's
Speaker 1: probably important for people to know that they can and
Speaker 1: should take like a actful but firm approach to any
Speaker 1: sort of pitch that they received from from somebody who
Speaker 1: is involved in MLMs, and in particular when it comes
Speaker 1: to coming under them as a recruit or working for
Speaker 1: the company and putting some of your hard earned dollars
Speaker 1: into starting in the MLM space. There are so many
Speaker 1: ways to say, Hey, I'm glad you're doing well in
Speaker 1: this business, but I've just got a lot going on
Speaker 1: right now. I'm too busy to participate. Thank you for
Speaker 1: asking me. Just kind of sidestep that bowl, kind of
Speaker 1: rushing towards you, exactly, Yeah, a little bit of tacked exactly,
Speaker 1: h can go a long way and then maybe change
Speaker 1: the subject quickly. What else are you up to? How
Speaker 1: are your kids? You know, I mean, so many other
Speaker 1: questions you could ask, but especially as these pitches are
Speaker 1: on the rise, it's it's important to know how to
Speaker 1: say no and to actually do so when you're presented
Speaker 1: with that, you know, some sort of MLM recruitment pitch.
Speaker 1: That's true, man. You know, we don't want to get
Speaker 1: caught up and become a recruit to where we're working
Speaker 1: out thousands and we've got a bunch of the line
Speaker 1: in order to make sure that we don't just lose
Speaker 1: that money, and so obviously you don't want to do that.
Speaker 1: But what about, like, what are your thoughts then on
Speaker 1: on actually buying product, you know, because if I had
Speaker 1: a friend come to me, like I might consider actually
Speaker 1: purchasing some of whatever stuff they're selling to support them.
Speaker 1: But also obviously if I only needed that product, cause
Speaker 1: I'm not going to buy something I don't need, but
Speaker 1: if I did need to maybe buy some of that
Speaker 1: stuff anyway, like I might kind of support them just
Speaker 1: to I don't know, not to just completely destroy that
Speaker 1: relationship because after that, I'm gonna feel so awkward if
Speaker 1: I knew that they spent a lot of money on it,
Speaker 1: and you know, I wasn't there to kind of be
Speaker 1: a part of it. I think so much of it
Speaker 1: comes down to what it is that they're selling, and
Speaker 1: and so much of the time another problem with m
Speaker 1: l M is that the product is inferior. The product
Speaker 1: isn't something as good as you'd be able to get
Speaker 1: on the store or online or at a small business,
Speaker 1: and so people that work for that m l M
Speaker 1: have to resort to kind of a hard pitch mentality.
Speaker 1: And because of that, I am more likely to say no,
Speaker 1: because I would rather spend money on a proven product,
Speaker 1: something that I can read the reviews on, something that
Speaker 1: has you know, more of a history or that I'm
Speaker 1: familiar with. So, yeah, most products being sold by an
Speaker 1: M l M. When you look at the reviews to
Speaker 1: like lou Le Row, apparently they were good in the
Speaker 1: in the getting maybe, but then they resorted to stuff
Speaker 1: got cheap. Yeah, stuff got really cheap and people started
Speaker 1: complaining about the quality, and yeah, I'm just not gonna
Speaker 1: spend my money on something that is is not really
Speaker 1: up to snuff. And you can start by pretending you
Speaker 1: didn't hear them ask that question. It's like glad I
Speaker 1: didn't hear you. Uh, you know, and say, while MLM's
Speaker 1: promised a great life, those fancif vacations, more time and
Speaker 1: the ability to to do whatever it is that you
Speaker 1: want to do, you know, more income than you've ever
Speaker 1: had before, most people that sign up find the opposite
Speaker 1: is true, you know. And so let's talk about essentially,
Speaker 1: you know, the antidote to MLMs and how to make
Speaker 1: decent money while having a more flexible lifestyle. We'll get
Speaker 1: to that right after the break. All right, Matt, we're
Speaker 1: back from the break and we have ripped MLM is
Speaker 1: a new one. I think they're not that great, that
Speaker 1: kind of stuck. Yeah, and that's really I mean, in
Speaker 1: in large part because it's an unsustainable business model in
Speaker 1: so many ways. And when the products that you're selling
Speaker 1: our subpar and you have to recruit more people in
Speaker 1: order to make any money, well, at some point you
Speaker 1: run out of people and uh and willing people to
Speaker 1: sign up and participate. Yeah, and again just kind of
Speaker 1: going back to the statistics, you know, it's it's not
Speaker 1: even just the business model. But when for people something
Speaker 1: is terrible and for one percent it's decent, well, I'm
Speaker 1: not gonna say that like, oh, that's a good thing
Speaker 1: you should consider, you know, And so for the vast
Speaker 1: majority of folks, when it is something that they need
Speaker 1: to completely avoid, I mean, we we're gonna have to
Speaker 1: side with exactly. So let's talk about alternatives right now, Matt.
Speaker 1: For people that either you know, have heard an MLM
Speaker 1: pitch recently or they've been lucky enough not to have
Speaker 1: one hit their inbox recently, there are better opportunities for
Speaker 1: you if you're struggling right now, or if you're looking
Speaker 1: for a way to make side income. If you are
Speaker 1: currently employed, we would say do whatever you can to
Speaker 1: essentially level up at your current job, Like, do you
Speaker 1: need another gig, do you need an opportunity quote unquote
Speaker 1: selling something on the side, or should you just put
Speaker 1: more emphasis on the job that you currently have your
Speaker 1: day job. Paying particular attention to how you can advance,
Speaker 1: how you can make more over time, um, and how
Speaker 1: you can take on more responsibility at the job that
Speaker 1: you currently have is a much better path for so
Speaker 1: many people than signing up for an MLM side hustle. Right,
Speaker 1: that's full of all these lofty promises that are all
Speaker 1: likelihood won't be realized. I mean, if you're hired by
Speaker 1: a certain company to begin with, like, chances are you've
Speaker 1: got some skill, you've got some talent, you know when
Speaker 1: it comes to that industry, and so even though you
Speaker 1: know that job might be feeling kind of stale these days,
Speaker 1: individuals need to look at different ways to take on
Speaker 1: more responsibility and to step it up. So aside from
Speaker 1: your main job, look to side hustles as well. It's
Speaker 1: definitely another way to avoid getting sucked into the you know,
Speaker 1: the additional income that MLM's promise. Uh. Specifically, we would
Speaker 1: recommend for folks to check out sites like side hustle
Speaker 1: dot com where they review and rate difference online earning platforms,
Speaker 1: different places that you can work, or you can even
Speaker 1: consider posting, you know, your specific skills or services on
Speaker 1: a site like fiber dot com. Both of those are
Speaker 1: going to be better alternatives. Uh. You know, like you're
Speaker 1: not gonna necessarily make as much money as that MLM promises,
Speaker 1: but remember those promises are empty, so instead look to
Speaker 1: the specific skills and the talents that you have. Yeah.
Speaker 1: I'd rather take a more realistic projection, right, Uh and
Speaker 1: and have that be firm than somebody that's like promises
Speaker 1: me the world, but in reality I end up getting
Speaker 1: nothing right right. Uh And so yeah, side hustles are
Speaker 1: great work from home jobs too, if you if you
Speaker 1: need the flexibility that an MLM promises to provide, which
Speaker 1: is always part of the pitch. It's like flexibility your
Speaker 1: own boss. Yeah, it worked like you want to work exactly. Yeah,
Speaker 1: but work from home actually gives you some of that opportunity.
Speaker 1: And of course work from home jobs are kind of
Speaker 1: the standard. Right now, you're going to see more of
Speaker 1: those listings. Flex Jobs is a is a great site
Speaker 1: to look at for legit work from home opportunities to
Speaker 1: make sure to check that out. By the way, on
Speaker 1: the note of work from home, there are work from
Speaker 1: home scams out there too when you're looking for jobs,
Speaker 1: and often those scams will involve promises similar to MLM promises,
Speaker 1: while at the same time requesting money upfront from you.
Speaker 1: So when you're looking for a legitimate work from home job,
Speaker 1: the only thing you should ever pay upfront is for
Speaker 1: a potential background check that's typically fifty dollars or less.
Speaker 1: So if someone says I've got this great work from
Speaker 1: home job for you and you can make tons of money,
Speaker 1: all you got to do is pay me five or
Speaker 1: six dollars up front, runaway, because that is a work
Speaker 1: from home scam, which is different than the MLM but
Speaker 1: just as nefarious. Yeah, and Joel. In addition to side hustles,
Speaker 1: you know, and just working from home like jobs that
Speaker 1: give you flexibility. Essentially, the ultimate, like the culmination of
Speaker 1: what MLMs are offering, is for you to own your
Speaker 1: own business. But you know, if you love solving problems
Speaker 1: and having a creative outlet, you know, if you are
Speaker 1: ambitious and kind of have some of the entrepreneurial spirit,
Speaker 1: then hanging your own shingle could actually be perfect for you.
Speaker 1: Owning your own business is maybe what you need to consider,
Speaker 1: and in most cases, it doesn't actually take as much
Speaker 1: art up money as you might think. It might even
Speaker 1: cost you less to to kind of start your own
Speaker 1: business than it would be to to get started with
Speaker 1: a starter pack of leggings or even a few cases
Speaker 1: of protein shakes. If you haven't already, we'd recommend for
Speaker 1: folks to listen back to episode two forty seven. That's
Speaker 1: where we talked with Alan donnegan about starting a business
Speaker 1: with zero dollars. It's inspiring to think that you don't
Speaker 1: need an MLM to get started, that the sky's the
Speaker 1: limit when you are creating your own business and instead
Speaker 1: of hawking someone else's junk, you know, like just some
Speaker 1: product that's maybe not made very well, you actually get
Speaker 1: to decide the product or the service that your community needs. Yeah,
Speaker 1: I think MLM's and the pitches that you're going to receive,
Speaker 1: they're going to typically target those pain points, those uh
Speaker 1: that desire for flexibility, for increased income for owning your
Speaker 1: own business. But these other things that we've outlined here
Speaker 1: are going to give you a better opportunity for those
Speaker 1: things the opportunity to actually make something that's sustainable, long lasting,
Speaker 1: and produces a real income over years, as opposed to
Speaker 1: the promises of quick riches, which is what a lot
Speaker 1: of the m l m s are kind of posing
Speaker 1: to people. Hey, you can make a lot of money
Speaker 1: in very little time if you come over here and
Speaker 1: do this, and that's just far from the truth for
Speaker 1: most people that that give it a go. Yeah, they
Speaker 1: promised to make it quick and easy, you know, like
Speaker 1: that's the biggest thing. They want it to be easy
Speaker 1: for you to make this extra money. But I mean,
Speaker 1: I think all the alternatives that we gave like they
Speaker 1: are probably going to be a little bit harder, but
Speaker 1: in the end it will definitely be more worth it,
Speaker 1: Yeah for sure. And then I think too, it's important
Speaker 1: to to separate the people who are involved in an
Speaker 1: MLM from the business model itself. I think part of
Speaker 1: the reason that we wanted to create this episode was
Speaker 1: because a listener in our Facebook group she asked whether
Speaker 1: or not she should buy a product from a friend
Speaker 1: who's involved in an MLM to support them, which is
Speaker 1: something we touched on a little bit, and most of
Speaker 1: the advice that other listeners were giving centered around the
Speaker 1: fact that they shouldn't feel obligated, but only make a
Speaker 1: purchase if they actually like the products. I agree, Right,
Speaker 1: if there is a good product that a friend who
Speaker 1: is uh, you know, running an MLM business is selling,
Speaker 1: and I think it's a good product, i'd consider it.
Speaker 1: But it's also important to note that MLM's prey on people. Right,
Speaker 1: the business model itself borders on predatory in most cases,
Speaker 1: and for other MLM companies, praying on people is the
Speaker 1: entire business model, depending on which one it is. But
Speaker 1: many of the lower level people like your sister's cousin
Speaker 1: or whatever, who are involved, they're not in it to
Speaker 1: that degree or with that intention, and they probably don't
Speaker 1: even fully realize exactly what's happening. They're trying something out
Speaker 1: in order to make a decent income to support their family.
Speaker 1: So it's important when you are getting that pitch to
Speaker 1: recognize that the person giving that pitch probably doesn't actually
Speaker 1: realize exactly what they've signed up for and exactly what's happening,
Speaker 1: because if they did, if they knew the whole truth upfront,
Speaker 1: they likely would have said no from the get go
Speaker 1: to Yeah, that's that's true. Man, and and so it's
Speaker 1: important to remember that while in m l M has
Speaker 1: the small chance of making you money, you're gonna have
Speaker 1: to work your butt off to get there, and on
Speaker 1: top of that, you might actually burn some some relational
Speaker 1: bridges along the way. If you're considering one of these things,
Speaker 1: it's important to to ask yourself, you know, like, can
Speaker 1: you afford the risk of the initial money as well
Speaker 1: as the time that's required to try and build your
Speaker 1: business this way? Don't buy into the hype from a
Speaker 1: post on social media or from a friend who claims
Speaker 1: to be making real money. Instead, we'd recommend for you
Speaker 1: to do your research and to know the odds of success.
Speaker 1: You know. Again, according to the FDC, people who get
Speaker 1: involved in an MLM they end up losing money. And
Speaker 1: so instead of joining up, we would recommend that you
Speaker 1: try creating your own business instead, or at the very
Speaker 1: least just kind of level up a little bit at
Speaker 1: your current job or take on a side hustle. Yeah,
Speaker 1: the likelihood of you seeing a pitch getting pitched by
Speaker 1: a friend has increased. M l m s are on
Speaker 1: the rise right now, but they're basically bad news for
Speaker 1: for pretty much everybody. So Hopefully this episode gave you
Speaker 1: some important information to know before you get that next
Speaker 1: pitch from a friend or family member who wants to
Speaker 1: sell you on the fact that your skills can make
Speaker 1: you uh super sweet income in very little time through
Speaker 1: participating in your own business, which means participating in an
Speaker 1: m l M with them. Yeah, that actually made me
Speaker 1: think of maybe another way to think about MLM droll, Like,
Speaker 1: when you are the product, that's when you should run away.
Speaker 1: It's one thing to sell products, but if you yourself
Speaker 1: are the product and you're getting involved into this network
Speaker 1: or the system, then that is something you definitely want
Speaker 1: to avoid. And I think that's when people begin to
Speaker 1: feel used in the process. Yeah, exactly, it's because like, no, no, no,
Speaker 1: I have to sell you so hard on your ability
Speaker 1: to do this, because if you don't say yes, then
Speaker 1: my business isn't gonna flourish because I need more people
Speaker 1: essentially to sell underneath me. Our friendship is now gone,
Speaker 1: exactly And and and friendship can't exist in that climate.
Speaker 1: And that's part of the issue with mL ms. And
Speaker 1: of course a lot of relationships get completely broken in
Speaker 1: the process of of doing an m l M together
Speaker 1: because of that dynamic, So stay away at all costs.
Speaker 1: That's what we would advise. All right, Now, let's get
Speaker 1: back to the beer that we had on the show today.
Speaker 1: This one's called Double Up. It's a double West Coast
Speaker 1: I p A from our friends over at Monday Night
Speaker 1: and Cascade brewing a little collab beer here. What were
Speaker 1: your thoughts on this one? Man? This was a good one. Man.
Speaker 1: This is one that I will say, I think Kate,
Speaker 1: my wife, would really love because she's all about West Coast.
Speaker 1: I p A is they're a little more typically, a
Speaker 1: little more uh piny, a little more resony, a little
Speaker 1: more bitter. That being said, though, I will say, because
Speaker 1: it was a collab with Monday Night, I felt like
Speaker 1: it was pretty fruity, you know. I had a lot
Speaker 1: of tropical notes, had a lot of melon going on.
Speaker 1: It was a little bit sweet, but then because of
Speaker 1: that West Coast bitterness, it kind of balanced out. So
Speaker 1: I feel like it started out sweet and tropically, but
Speaker 1: then it kind of mellowed out and kind of switched
Speaker 1: gears to the bitter notes. This one was really good, man.
Speaker 1: I was excited to see our friends over at Monday
Speaker 1: Night team up with Cascade who, by the way, makes
Speaker 1: amazing sours that I mean sours that Cascade makes I
Speaker 1: will drink any day of the week, you know. Yeah,
Speaker 1: they're incredible. They're they're incredibly expensive, but they're worth it
Speaker 1: because they're like just aged four months and months and months,
Speaker 1: sometimes years with different fruits and stuff like that. Man,
Speaker 1: every hour I've had from Cascade has been excellent. But
Speaker 1: this isn't a sour, this is an I p A. Yeah,
Speaker 1: what were your thoughts on I really liked it, man, Yeah,
Speaker 1: I thought it was more bitter than the I p
Speaker 1: A s I'm used to drinking these days because it
Speaker 1: was in the West Coast style. It had a touch
Speaker 1: of watermelon. Yeah. I feel like there were just a
Speaker 1: lot of melon notes going on in this one, Like
Speaker 1: not fruity in like the citrus vibe necessarily, but just
Speaker 1: kind of more of that rounded melon flavor. Yeah, exactly.
Speaker 1: So I really enjoyed it. Even though it's not the
Speaker 1: style that I gravitate towards these days, it's fun to
Speaker 1: change it up and drink a West Coast style and
Speaker 1: it's not as harsh or bitter as a traditional West
Speaker 1: Coast ones that are just incredibly abrasive. This one took
Speaker 1: like a middle ground approach to a West Coast I
Speaker 1: p A and I really enjoyed it totally. And because
Speaker 1: it wasn't a New England style when we poured, it
Speaker 1: was nice and clear, which is clear and kind of
Speaker 1: like a burnt orange, right exactly. Yeah, unlike a lot
Speaker 1: of the IPAs were drinking these days, which basically look
Speaker 1: like orange juice. Yeah, but yeah, man, I'm glad you
Speaker 1: and I got to share this one today on the
Speaker 1: episode while we talked about MLMs and that's gonna be it, man.
Speaker 1: Our listeners can find our show notes up on our
Speaker 1: website at how It's money dot com. Up there, we'll
Speaker 1: put some links to some of the different resources that
Speaker 1: we mentioned as alternatives to MLM, some different places that
Speaker 1: you can make extra money without necessarily harassing your friends.
Speaker 1: Yeah exactly. And if you've been listening for a while
Speaker 1: and you haven't yet left review, well, Matt and I
Speaker 1: would really appreciate it if you let other people know
Speaker 1: what you think about the podcast, and your good review
Speaker 1: helps spread the word about the show that we're creating
Speaker 1: to let other people know where they can find help
Speaker 1: with their money. All right, that's gonna do it for
Speaker 1: this episode, Matt, until next time. Best Friends Out, best
Speaker 1: Friends Out,