Why the very American fantasy behind multilevel marketing won't die
What are we buying when we purchase a product? Sometimes, the item itself, something as unglamorous and useful as laundry detergent or ink for the printer. But just as often, we are buying a fantasy — an assurance that we are a certain kind of person, a dream of a different kind of life. Companies that engage in multilevel marketing, or MLM, are especially deft at peddling this sort of intangible temptation. As the New York magazine journalist Bridget Read documents in her gripping and instructive new history, 'Little Bosses Everywhere: How the Pyramid Scheme Shaped America,' they have to be, because they barely make a pretense of selling actual products.
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Yahoo
4 days ago
- Yahoo
Bride 'Blew Her Entire Savings.' Now, She Expects Her Sister to Help Pay for Her 'Lavish' Wedding
A woman is questioning whether she's wrong to refuse to help her sister pay for her "dream wedding," after she lost money in a multilevel marketing scheme In a post on Reddit's "Wedding Shaming" forum, the woman shared that her sister has asked to use her savings to fund her wedding "She knows I have a decent chunk of change saved and she's been dropping not-so-subtle hints about how I'm 'so responsible with my money' and 'don't have a mortgage yet' so surely I can spare some cash for her big day," the Reddit user wroteA woman wonders whether she's wrong to refuse to help her sister pay for her "dream wedding." In a post on Reddit's "Wedding Shaming" forum, the 30-year-old woman opened up about her sister's "serious main character energy when it comes to her wedding." "The kicker — she expects me to foot a significant chunk of the bill after she blew her entire savings — $25k — on a ridiculous MLM [multilevel marketing] scheme," she explained. According to the OP (original poster), her sister, a 32-year-old named Chloe, has a history of being "terrible with money." "Think impulsive buys loans for trips, the whole nine yards," the OP wrote. "Meanwhile, I've been diligently saving every penny for a down payment on a house. Our financial approaches are polar opposites." "About a year and a half ago, Chloe got completely sucked into one of those 'boss babe' wellness drink MLMs," she continued, referring to the business model where participants earn money from both selling products or services and recruiting others into the network. According to the Federal Trade Commission, many MLM companies are illegal pyramid schemes. "I tried to warn her gently at first, then more forcefully as she sank more and more cash into inventory and training. She was convinced she'd be a millionaire. Spoiler alert: she's not," the OP added. "She flushed her entire $25k savings down the drain and is now financially back at square one." According to the Redditor, Chloe is engaged and has plans for a "massive, fairytale wedding — the kind that easily costs $50k+" — and she's asked her sister for help paying for the lavish event. "She knows I have a decent chunk of change saved and she's been dropping not-so-subtle hints about how I'm 'so responsible with my money' and 'don't have a mortgage yet' so surely I can spare some cash for her big day," the OP wrote. Never miss a story — sign up for to stay up-to-date on the best of what PEOPLE has to offer, from celebrity news to compelling human interest stories. Eventually, the sister "straight-up asked" for the money, and the OP was taken aback by her justifications for the bold request. " 'You know,' she said, 'if you even threw in like 10 grand it would make such a huge difference. You don't really need all that house money right this second and this is my one shot at the wedding I've always pictured,' " the OP wrote, recounting the conversation. The OP said she absolutely "lost it" after this request and promptly shut it down. "I told her, 'Chloe there is NO WAY I'm paying for your wedding. You literally flushed your savings down the drain on a scam, even though everyone told you not to and now you expect me to bankroll your fantasy. My savings are for MY future, not to bail you out of your past mistakes,' " she said. Her sister got upset, calling the OP "selfish" and "unsupportive." The sisters' mom also took Chloe's side, telling her other daughter: "Family helps family." "Honestly, I feel a little bad for making her cry and I do love my sister," the OP admitted. "But I also feel like I'm being put in an impossible position. She made her bed and now she expects me to pay for the luxury sheets." In the comments section, readers were quick to take the OP's side, agreeing that she shouldn't have to fork over her hard-earned savings just because she isn't getting married or buying a home right now. "Any time she brings it up, just remind her that 'no' is your final answer," one person advised. "If she wants a $50k wedding, then she and her fiancé had better start saving that." "I find it extremely audacious that you are being asked to give up or push back your dream because of your sister's poor financial decisions," another commenter said. "She needs to learn to live within her means. And right now, those means do not extend to a $50k wedding." Read the original article on People
Yahoo
5 days ago
- Yahoo
The Little-Known Link Between Multilevel Marketing and Project 2025
It's a scenario that's all too common in Instagram DMs and on Facebook Messenger: An old acquaintance with whom you haven't spoken in years messages you out of the blue, usually with something like, 'Hey hun!' But this person's not trying to catch up — they're trying to sell you something. And that's all because of the multilevel marketing business they recently joined. When you think of multilevel marketing, you probably conjure up images of the past few decades: Mary Kay makeup, Pampered Chef cookware, or Tupperware parties in '50s and '60s living rooms. But in her new book, Little Bosses Everywhere, NY Magazine journalist Bridget Read explains that the origins of MLM actually go back almost as far as the founding of America — and that, rather than exemplifying the American individualistic spirit, these companies helped shape the national identity. We spoke to Read about what most people get wrong about multilevel marketing, the difference between MLMs and fraudulent schemes, and this industry's global influence — and its close ties to Project 2025. Bridget Read: I did a short article for New York Magazine about multi-level marketing companies during the pandemic, and it left me with more questions than answers. In describing how MLM works for an article-length piece, I had to skip over so many things that don't make sense about the business model. Ultimately, I realized that you need a whole book to tell the story of multilevel marketing, because it's a story as old as the American project itself. That's definitely the industry's definition, but what I learned in my research is that what you're actually getting paid for are the purchases of sellers under you. The Multilevel Marketing Company is only tracking how much my 'downline,' the group of people I've recruited to sell more products, is buying. In theory, that could be a mix of customers and participants. However, there is considerable evidence that suggests most people buying inside MLMs are themselves participants. MLMS treat those purchases as sales because, in theory, an MLMer can go out and resell the products. That's what they're supposed to be doing. But in reality, most of them have a ton of products lying around at home. The revenue comes from recruiting people, and what those recruits are buying. So there really aren't product sales happening in the way you think there are. Just think about how strange that is: The idea that anyone would buy these expensive products in this weird way from a friend, where they're sort of harassing you online? It doesn't make any sense as a business model. The products can be good, but where MLM falls into fraud and certain companies have been prosecuted as pyramid schemes is the concept of the business opportunity. That's the part that, over and over again, has been found to be often fraudulent, because the idea that it's relatively easy to make money is not true. [They sell the idea that] with this little investment, you can then build a team where you're making a living from doing that. When really, the people who continue to make a living from doing it, statistically and overwhelmingly, do it by recruiting new participants. There's a lot of really intense in-group association that makes people compare MLMs to cults. You're using your own kind of language, and they're plying you with positive attention, so you feel like you're part of a family. Also, many of these companies have a policy against what they call crosslining, which is that you're not supposed to talk to anybody who's at your level. And you're definitely not supposed to send negativity down to your downline. That creates this sort of Draconian environment, where nobody's complaining and nobody shares when they're losing money. That makes it really hard to dissent, to ask questions, and ultimately, to leave. When people do leave, then there's a lot of pressure [for those still inside] to cut those people out. Most people I've spoken to who leave MLMs are cut out of chats; their friends stop talking to them. You really do feel like you're being cut out of your family, so that also makes people really afraid to speak out. Women's positions are much more precarious in the labor market than men, and have been for a long time. During the '60s and '70s, many more women went to work, but statistically in the United States they went to work in the industries and areas where labor is much more fragile: retail, the service industry, clerk-type work, secretaries. These jobs are not very secure, wage-earning jobs. The people in them are often independent contractors, or they're making minimum wage. They don't get benefits, and they're much more subject to the vicissitudes of the market, layoffs, things like that. So that means more women are stuck at home; often, they're doing childcare, too. They are simply more vulnerable to the pitch that you can make a living from home, that it's flexible, and that you're not subject to clocking in somewhere every day, which often does conflict with childcare. MLM flourishes among all kinds of women. According to the FTC, there is such a thing as legitimate multi-level marketing, which stems from a decision made by the FTC in 1979, called the Amway Decision. Amway was, and still is, the world's largest MLM, and the most politically powerful and influential one. Betsy DeVos's father-in-law, Rich DeVos, is one of the founders of Amway, along with his partner, Jay Van Andel. Amway comes from the same line of old MLMs that created some of the companies in the seventies that were found to be pyramid schemes. When the FTC sued, Amway argued that there were rules in place that kept the company from being a pyramid scheme. They claimed [as a seller] you had to have a certain amount of customers, you had to have 70% of your products resold, or you wouldn't get any commissions. They also claimed that Amway bought back any products you weren't able to sell, and the FTC decided that they would accept those rules without any evidence — Amway didn't have to prove that its rules were enforced. They didn't have to prove how many of their recruits make a living from actually selling the products. The FTC accepted Amway's word that it regulated itself. Herbalife was another huge MLM that the FTC eventually sued. Though the company settled, the FTC found that the overwhelming majority of Herbalife participants did not make money, and many of them lost money. Herbalife was sued for $200 million and supposedly restructured their business. But again, there's really very little evidence that the enforcement has changed much, and so the idea of legitimate MLM is still a gray area — which is why the FTC website basically warns people not to participate in them, even though they're technically allowed. Part of what led to the Amway decision was that, by the time the judge was making his ruling, DeVos, Van Andel, and Amway were already incredibly powerful political entities. They are Calvinist Christians from Michigan; the Congressman from their district was Gerald Ford. By the time Ford was president, they were very close to him and were big donors. Then they backed Ronald Reagan, who obviously became president in 1980. During that time they were very influential, sending a lot of money to the Republican party and to think tanks like the Heritage Foundation. Since then, they've continued to be one of the largest dark-money donors in the Republican party — just like the Mercers and the Kochs. Betsy DeVos, even long before she was confirmed as education secretary, said in a speech in the '90s, 'My family is one of the largest donors to the Republican party, and now we're going to get something in return.' So, they've used their influence to help pass the policies that they want, which largely hew to an ultra-conservative free-enterprise philosophy. That includes making the government very small, deregulating all kinds of industries, increasing privatization, and lowering taxes. They contributed money to Elon Musk's PAC this election cycle, and what DOGE is doing really closely aligns with their vision of the government. They also donate a substantial amount to the Heritage Foundation, and Project 2025 aligns closely with their views. So what we're seeing happening in the Trump administration is a big part of the ideology that powered multilevel marketing. Yes. Barb Van Andel-Gaby, who is Jay Van Andel's daughter, is the chairman of the board of the Heritage Foundation, and when she inducted Kevin Roberts — who wrote the introduction to Project 2025 — she literally said, 'He is going to increase our influence on Capitol Hill.' Project 2025 includes exactly what Betsy DeVos said about the Education Department, which is that she wanted to eliminate it. It has a whole section on independent contractors, and MLM relies on as loose independent contractor laws as possible. They want to significantly limit the FTC's ability to regulate private companies and private enterprises, which would obviously greatly benefit MLMs. I hope everyone picks up this book, because so much of what has happened in our country in the last 40 to 50 years in terms of the widening inequality gap actually comes from the ideology that multilevel marketing has spread throughout the United States — and now the world, since the majority of MLM participants are actually overseas. That ideology is one of ruthless individual pursuit of wealth, and that instead of critiquing that inequality gap, [MLM philosophy says] we can all just keep going in our own little side hustles, and we all have the chance to be our own kind of Bezos one day. MLM conventions are extremely insular events. Typically, you have to be part of an organization to attend. I did not join Mary Kay, but I ended up going to the convention, and relying on the fact that I'm a white blonde woman who can blend in with the crowd. It was a really wild experience, but it also made me feel much more sympathetic and empathetic toward the women who do it. I was moved by a lot of the stories of redemption and success, even though many of them are probably not true — I've spoken to and seen a lot of evidence of women in Mary Kay and other MLMs who've been celebrated for their sales, but end up actually having simply spent a lot of money. One woman whom I spoke to at length about her journey in Mary Kay was championed as a saleswoman, but she was just spending and spending and spending. She ultimately spent more than $75,000 on Mary Kay products over a decade. The post The Little-Known Link Between Multilevel Marketing and Project 2025 appeared first on Katie Couric Media.
Yahoo
29-05-2025
- Yahoo
4 Dangers of Trying To Build Wealth Fast
A notable Harris Poll survey conducted in 2022 found that as many as six in 10 Americans want to become a billionaire — and around 44% believe they have the resources to do so (with crypto investors making up a large portion of that group). This increasingly common mindset might be more harmful than you think. As tempting as it is to build wealth quickly, it can be incredibly dangerous for your financial well-being. Be Aware: Consider This: Trying to earn money as fast as possible leaves you vulnerable to lifestyle creep, overinvesting your savings falling into debt and other risks. Here are four common dangers of building wealth too quickly and how you can avoid them. If you've ever felt like you can never earn enough, you might be succumbing to 'lifestyle creep.' This phenomenon occurs when someone suddenly has more expendable income than they're used to. Without a careful budget, it's easy to slip into the habit of spending more to keep up with what you see as an ideal lifestyle, whether it's a nice car, a bigger house or little things like more subscription services and meals out. One of the risks of trying to build wealth quickly is that even if you succeed in the short term, if you don't take steps to avoid lifestyle creep, whatever you earn will still not feel like enough. This can lead you to continue spending or gambling with your earnings rather than securely saving them for the future. Here are some tips to keep lifestyle creep from draining your income: Stick to a monthly budget that sets aside at least 20% of your earned income for savings. Take pride in living below your means. Set annual savings goals and try to exceed them. Avoid comparing your lifestyle to others', especially on social media. Read Next: If an opportunity seems too good to be true, chances are it is. Common get-rich-quick schemes you might encounter today include: Investment scams promising a high return Multi-level marketing (MLM) recruitment offers Work-from-home opportunities requiring little or no experience These opportunities may not immediately stand out as scams. They may also be perfectly legal. For example, multi-level marketing is a legitimate business structure despite the fact that as many as 99% of MLM participants lose money, according to Forbes. Dolling out risky investment advice on social media is also legal even if it's unfounded. To avoid falling for dangerous get-rich-quick schemes, you may need to adjust your expectations. Take some time to research every opportunity you come across. Remember, if it were really that easy to earn fast money, everyone would be doing it. When you're eager to earn, you may be tempted to invest everything you have instead of saving. Around half of Americans live paycheck to paycheck, meaning they don't have savings to fall back on in case of an emergency. Investing your money is almost always riskier than saving it. With no backup savings, a medical emergency or other unexpected cost could put you into serious debt, making it even harder to break the paycheck-to-paycheck cycle. Instead of investing everything you can spare, aim for the 50-30-20 rule: 50% of your income should go to monthly needs, 30% to things you want — which may include stocks and other investments — and 20% should go to savings. That ratio serves as a general guideline and can be adjusted if your monthly costs account for more than 50% of your income. For example, a ratio of 75-15-10 can also help you save while slowly building wealth. How much money do you have to invest? It might be less than you think. Remember that all forms of investment come with some level of risk. Whether you're putting money into real estate, stocks or a business, if something goes wrong, you likely have no way of getting those funds back. That's why it's important to set an investment budget before you enter any financial venture. Draw a line between money you can invest and money you can't. Avoid gambling with: Money you need to pay a monthly bill. The 20% (or whatever ratio best suits your budget) that should be set aside for savings each month. Borrowed money. Money that could be used to pay down debt. More From GOBankingRates Surprising Items People Are Stocking Up On Before Tariff Pains Hit: Is It Smart? 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on 4 Dangers of Trying To Build Wealth Fast Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
