If you don’t know the term “MLM”, you’re probably still familiar with the type of business. It stands for Multilevel Marketing. It’s the kind of company where that girl from high school you weren’t really friends with hits you up 15 years later asking if you want to “join her team” selling nutrition shakes. But that girl isn’t motivated by selling shakes. She’s motivated by recruiting others to join with a dream of getting rich or earning a side income. She tries to portray success and sell that same dream to those she recruits.
If you take a straight up pyramid scheme and start tweaking tiny little things until it’s just barely not likely to put you in jail, what you end up with is an MLM company. MLMs are just pyramid schemes pretending to be a nutrition shake company.
If you want to take a look at the study referenced in this post, google “FTC MLM study” (without the quotes). If you’re involved in an MLM but don’t see it listed on this post, you can be pretty confident the numbers are nearly identical. The ones I include here aren’t the worst, they’re just typical and more well known.
The evidence against MLMs is overwhelming and overwhelmingly bad. But so many people still get wrapped up in them because they do an amazing job selling “the dream”. Work from home! Be your own boss! Make a side income. Opportunity to grow! Look at all these successful people. If you want it bad enough you can do it!
But the dream is a lie. The math behind the pyramid scheme makes it impossible for almost everyone to succeed. MLMs are good at three things: Costing you time. Costing you money. And costing you friends. They’re not a way to build wealth. You won’t make a side income. Find something else to do.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often (not in an MLM).