She's On The Money - Sounds like MLM but okay

Episode Date: July 21, 2020

MLMs – they’re the multilevel marketing business models that promise an amazing lifestyle and a generous pay packet, but in reality, the overwhelming majority of those entangled in MLMs lose money, escaping the experience emotionally and financially drained. Given the misleading nature of the practice and that 75% of MLM distributors are women, we think it’s time we shed a little light on why multilevel marketing is something we should be avoiding at all costs.Do you love the podcast sick and want more SOTM? Obvs! Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and DEFINITELY subscribe to our newsletter, the written recap of the pod’s key takeaways, including some bonus bits you won’t want to miss. Finally, if you’re in a money mess and need help untangling the muddle - we’ve got you sorted – simply record your question and send it through to us at [e-mail] and you may just end up on the podcast!  Your hosts are Georgia King and Victoria Devine. The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the money, the podcast for millennials who want financial freedom. My name is Georgia King. I'm a copywriter and journalism student who knows a little bit about the wonderful world of money now, but I still have lots left to learn. Luckily, just like all of the weeks always, I am joined by millennial money with Victoria Devine. Hello. Good morning, Georgia King. Now, today on the show, we are going to be dissecting the problems with MLMs or multi-level marketing businesses, as they're also known.

You've probably heard of them before. They're the network marketing companies that onboard you to make money by selling their product and also by recruiting others to join your team who then sell that product too. Examples of companies that use this business model include Tupperware, doTERRA, LuLaRoe and plenty more. Research out of the US has also revealed that 99% of all MLM distributors lose money. So we think it's time we had a chat. But before we dive in and dissect why MLMs are maybe not quite as they seem, Victoria, let's start on a peppier note and chat through some money wins or confessions from the week that was. What have you got for me? Okay, I have another money win. They are coming at you left, right and center. Yes, you are welcome. Mine is a food

related money win i feel like a lot of mine is either food or car related that's okay um but that's that's where i'm at in my life so georgia as you know i'm probably one of the most digestively challenged people i can confirm this yeah so it's not easy for me to find snacks and foods that actually align to all of the requirements i have and recently my local cafe has been dabbling in making some snacks and muffins and things that actually meet my requirements not for me it's for everybody but I'm really excited about it so I let them know and this morning they sent me home with a free muffin and I was very excited about that it was a delicious raspberry I think pretend white chocolate muffin I can't remember vegans yeah so it was like gluten-free vegan dairy-free

all of those things that I consume and I loved it so anyway those things are usually really expensive and I'm here for it so that was my money win it's about a muffin do you have a good money win for me okay mine is also food related and it's not vegan in fact it is quite the opposite you guys might remember in season two i dropped a little shout out to my mates at aldi um still a big fan it's not about tuna this time it's about cheese guys now i i'm a big cheese girl my friends listening will know this already but daffodil is my favorite cheese triple cream brie but it's gonna set you back it's gonna set you back about 15 bucks a pop it's not even 15 i think it's more expensive like I live closer to the city.

It's like $18, I think, a slice. Yeah, which is ridiculous. But I'm going to say it's worth it and it aligns to my values. But recently I went to Aldi and they have this whole cheese range, guys. I'm talking truffle brie. I'm talking triple cream brie. All of the brie's, all of the camembert's, all of the cheddar's. They have amazing cheeses for like, you know, a quarter of the price.

Impressive. I like your Pat and Kim accent. Yeah, I don't know why that happened. No, we're keeping it. I'm just excited about the cheese. Anyway, get around it, guys. um should be that's your money win this week you bought some cheese yeah but i saved like 15 bucks is it all right that's my win i'm not judging your win well okay so mine wasn't that impressive but

you know who's always impressive our facebook group that is true let's have a little look at the community the small community of 83 000 people now if you don't mind victoria which post stood out to you this week georgia king i have a money win this week from the facebook group that made me stupidly happy and I think it made a lot of other people really happy as well judging on how many likes and interactions this post got so this was from Celie and she said today I paid off a personal loan from my first car which was a complete lemon I've had the loan since I was a fresh 18 year old and it was a 14% interest rate I had the car for one year when the car died about two years ago I was left with a massive loan to pay off and no car so this year she paid off over

$8,000 worth of debt including her personal loan and credit card and she's finally feeling so much better about her financial health which as you know Georgia is my favorite part of helping people and she said that I've listened to the podcast and something that really struck with her was if you live fake rich now you'll be real poor later and she said that she'd been doing this her whole adult life trying to prove to people that didn't matter to her that her worth as a human amounted to a fancy car and fancy clothes so while that's all stupidly impressive the other money win that she had for us was that two months ago she bought her first house with her partner and she'd saved for the deposit for the house while paying off her debts and she says that

the podcast has changed her life and i got i get so sappy about all of this but celia you are a legend and the photo of you and your partner at the front of your house with a sold sticker makes me so happy let's see more of these types of posts in the group georgia king have you got a post that stood out to you this week i certainly do mine is from ace who has written in that she's recently been stalking the old facebook marketplace yes um yeah and she was she was in the market for a breville coffee machine or any kind of professional looking coffee those ones are really popular aren't they they are and you know what they can be expensive seven hundred eight hundred dollars usually she picked one up for a hot three hundred dollars so she's frothing up

those barista made coffees on the daily forget your $4.50 latte in the morning five dollars if you're having oat milk like Victoria she's having them at home for free so good on you Aisty and also good for the espresso martini yeah I was gonna say can you make sure that you uh talk about the edit that I can see there she says that she's worked out how to perfect the espresso martini also in lockdown so I just feel like that's a money winner all around because let's be honest an espresso martini can set you back a solid $20 easily. Oh, 100%. Yeah. And you can't go out now, so may as well stay at home and enjoy those espresso martinis. All right. Now, let's move on to the main topic of today's show, multi-level marketing. Now, globally, MLMs are a multi-billion

dollar industry with hundreds of thousands of people being tied to these companies who promise the world that more often than not, do not deliver. MLMs are often sold to people with the lure of being an easy way to be your own boss and make bank from home, which sounds too good to be true because usually it is. How was the emphasis there? Now, MLMs are often sold to people with the lure of being an easy way to be your own boss, babe, and make bank from home, which sounds too good to be true because usually it is. Now, unfortunately, it also impacts significantly more women than men with 75% of distributors or MLM salespeople being women. So what better place to talk about it than right here. Victoria, please kick us off by further clarifying exactly what MLMs are and then we can

move into why they are so very problematic, if that suits you. It absolutely suits me. So first things first, I know we're going to get a lot of people offside with this episode, but I think it's really important to discuss it. And once we get through some of the stats and figures, I think you guys will really understand why I want to talk about this, because you often see these women who are passionate and driven and smart and they get wrapped up in these businesses and they are putting so much time and energy and effort into for example selling skincare for somebody else's business so while they are online busting their nuts essentially to actually get their business up and running they are working away for somebody else and with that same time energy and effort

that they are putting into somebody else's business i genuinely believe that they could be building their own that would actually have a profit for them so whether that's skincare or essential oils or tupperware or whatever it is i just see so many people online selling these products and then not actually fully comprehending that it's not actually their business and we saw this semi recently a couple of years ago avon left australia and that actually left a lot of people high and dry who had been building their or what they they presumed were their own businesses for the last you know 20 something years to have it pulled out from underneath them so I think that we need to have a really well-rounded and proper discussion about this topic because I know that

probably everybody in our Facebook group at some point has been messaged by someone who's like oh hey I was just wondering how are you doing do you want me to talk to you about my new product and I know that it's something that we actually really need to cover and really need to get across because I feel like there's so much delusion in that space where they sell you a dream but the dream isn't actually 100% and that's what we want to shed light on today yeah so I'm glad I answered your question Georgia by absolutely not answering your question so let's jump straight in MLM stands for multi-level marketing and you've probably heard a lot of other things that it's been called in the past such as network marketing or referral marketing or direct selling or even pyramid scheme

selling but like most businesses MLMs actually sell products and services. So if you do a really quick google search for multi-level marketing you'll see so much criticism lobbed at MLMs and I think that whilst it's warranted we really need to break this down and this is because the business model is creepily similar to a Ponzi scheme or a pyramid scheme so in classic pyramid schemes you actually purchase into a company paying a sign up and or a monthly fee to be a part of that scheme and to make your money back you actually have to invite new investors or new partners into the company and so on and so forth but as we've come to learn this isn't actually sustainable because your success is actually built on the fact that you will sign more people up to this scheme it's

all about recruitment exactly and because there are finite amounts of people in the world and not every single one of those people in the world wants to be a part of that scheme you're going to soon run out of new recruits and you're not going to be able to make the lines so in reality only the top five percent of people in pyramid schemes actually end up making money and now we are talking about pyramid schemes right now and i know a lot of people are going to want to be jumping down my throat being like but mlms are pyramid schemes you are correct what are the differences the defining difference of mlm that makes it not a pyramid scheme is that there is a tangible product associated with a mlm so an mlm means that you actually sell a product in addition

to doing all of the recruitment but if you look into it properly you will see that most of the revenue derived by a business that is of multi-level marketing is not from the product they sell but from the recruits that they drive so i think it's really important to go okay you're right you are not wrong mlms are not pyramid schemes but they are creepily similar and they are not putting you in the best possible position long term so how do you differentiate between an mlm and just a straight up pyramid scheme one pyramid schemes here in australia are illegal so i'm pretty sure that they are they're illegal in most places i was going to say i'm pretty sure that they are illegal internationally but i don't want to be quoted on that but i do know that they are

completely illegal in Australia. But things to consider are if you can make a decent amount of money through sales alone, it's a legitimate business. There are businesses out there that take people on to sell their products. It is not a new concept. If there are high-end products that actually work, it's a legitimate business. All righty, Victoria. So why would you say people are so drawn to MLMs then? Look, George, simply put, I think it's because they sound incredible. And I've got friends who engage in these. So this is absolutely not an attack on them and I think that you know I have a lot of really intelligent friends who are doing this and I also know people who are doing it who are making money so it's not something that

we need to actually you know completely rip down but what we need to be is educated they're really shiny they look beautiful how many jobs out there can promise you uncapped earning potential Georgia King your own working hours you get to work from home the opportunity to be your own boss etc etc without having to deal with a balance sheet or a profit and loss or worrying about employees. I think that it is selling a dream and to be honest, it sounds great. So I can see why people want to be involved in them. But if you have the time and you have the energy and the effort to put into marketing somebody else's business, I think that you end up in a position where you might have been better off long-term actually starting your own business as scary as

it can seem. MLMs are also strongly targeted at women and 75% of distributors of MLMs here in Australia are actually female. Now, there are so many reasons for this. And the main one is that women are more likely than men to actually be at home with their kids and be able to be targeted by these things. They're often looking to have a bit of a side hustle on the side or contribute to the weekly income. And for many women, MLMs sound like a get-rich-quick scheme that they can actually do from the comfort of their home while still raising their kids and so on and so forth. Yeah, it sounds amazing. Honestly, it sounds like a dream, but we're going to break down exactly why it is not.

MLMs also promise a certain level of support that is also not always delivered to these people, which can appeal to mums who I know personally through interacting with our community all too often feel really lonely when they're home with kids. It promises a community. It promises an online network of people who can support you and business partners. And honestly, it sounds great. And if this worked, I would be here going, why doesn't everybody do this? But there is a very good reason why. I think another point to note is that there's also very strong ties to feminism linked in with MLMs.

They really capitalize on the whole bus, babe, girl bus thing. Oh, totally. Yeah. So they try to make you feel like they're empowering you and helping you in that space when really they're just exploiting you. Totally right. And it actually really upsets me because if you're empowering me, why are you making me buy the product before i can sell it if it's such a good product that you're saying will literally

sell itself why do i have to purchase it first and keep my own inventory so i feel like there are a number of questions that we need to be asking of these companies as to whether they have our best interests at heart or not as you said like they're strongly tied to feminism they're also so female orientated like think about the types of products that are in the lamps we're talking about kitchen tupperware we're talking about weight loss shakes leggings essential oils cosmetics which obviously appeal to women more than that does men and potential people who are recruited into this or we could call it lured into this they can imagine themselves using this product and they are often conned into purchasing the product for themselves so the company is not

just making sales from the people that they recruit or the people that you know you sell to they're also making sales for you because obviously you have to purchase that product to try out before you sell it to somebody else because otherwise you'll look like a complete fraud like why would you be selling a product you've not even tried yourself so they end up in a position where they're making multiple sources of revenue from a place that it probably shouldn't be coming because at the end of the day Georgia if I hired you to sell my product I would want you to be an advocate of my product so why wouldn't I just give it to you also MLMs often target people from lower socioeconomic backgrounds and low income earners, people who don't have

formal education backgrounds, a degree or certificate. You don't need those to get involved with an MLM. You can just sign up, pay your entry fee and off you go. So they are preying on people who are more vulnerable, maybe don't have as many other options. And sadly, they're the ones that are going to be emotionally and financially drained in the end, right? Yeah. And I think it's really depressing as well because you're sold a dream and there's a lot of stats that surround this so like let's start having a chat about those because I think that they are the thing that's going to really drive it home now guys because MLMs are usually based out of America and then come to Australia a lot of these statistics aren't Australian but they

absolutely apply to all of the people engaging in MLM companies here in Australia because they're a part of that so we tried to get really Australian statistics but they weren't relevant and I really didn't feel like they had the impact that these do. So if you're even considering getting involved in a MLM, I think one of the first things that you should be doing is going and looking at the income disclosure statement. So this statement is going to be breaking down the rank of each person within that business, the percentage of the person at that level in the business, and then their average annual income. And I think that that's really important to understand because you'll see where most of the people are sitting. Okay so something that has recently come to Australia

is Monet and this is a skincare company that is an MLM business very similar to Rodenfields or Arbonne. They've come to Australia recently and I've had a look at their income disclosure statement and I think that it is really telling. So the most popular level in their business is called a market partner. And that is what 94% or 94.03% of the people in their business are ranked at. And per annum, the average annual income of one of their market partners is $183 US. And so annual income of 94% of their company is $183 Georgia. And so if that's not shocking enough if you would like to sign up to Monet to become one of their skincare partners you have to buy their trial pack and you have to buy their startup kit Georgia that's $199 so that is actually

more than what you made in the year so you are actually paying them to be a part of the business and you are not making anything and so you're like okay well that's 94% of the company then the next level up is a managing market partner and that makes up 2.74% of that business and their average annual income is $2,300 for the entire year of work that they have done to recruit other people and grow their businesses which is quite dramatic but that then doesn't take into consideration the fact that these managing market partners would have had to purchase one their own product their own startup kits all of the things included in that which I looked into and that averages at about $800 in product purchased by a managing market partner. So take that back to

about $1,500 worth of profit, let's call it that. That is not okay for an entire year's worth of work. Imagine starting an online business and that is what you generated in the first year of being on social media, of being in a position where you're selling someone else's product. I would have expected it to be far more and it actually doesn't increase in a better way at all because the further you look into it the lower the percentages and the highest paid person in the business there's like three of them and they get paid more than a hundred thousand dollars but of all of those people they're the ones that are you know they're the shiny ones that everyone refers to and says oh my gosh in my first year I did this and I think that it's really important

tactically you go okay no problems but 94 percent of the business make 183 dollars but i had to spend 199 to even get involved and that's why it's um closely linked to pyramid schemes right like the richie riches are up the top making all of the coin and then everyone else below 94 percent like nothing exactly and the only difference between a pyramid scheme and an mlm is the fact that an MLM has a product associated with it in addition to having that pyramid structure so it sounds like the main danger here is that MLMs are just not a sustainable way of making money are there any other reasons we shouldn't be getting into it I mean that's a pretty good one but I mean that's pretty good yeah but no there's no guaranteed income of people often find

themselves buying the product just to make their bonuses and stuff like that so like if you look further into the business structure you'll find that each and every single month they need to make a certain amount of sales per month to make a bonus and people don't want to lose their bonus because often their bonus is retained from previous months so you're forced into purchasing your own product and if you were doing this in your own business it wouldn't be sustainable it wouldn't make sense it really seems like you own your own business but in reality you're just a very small part of a very large company that are using you to get their product into the market And at the end of the day, I've said this before and this is very opinionated of me, but if that product was a very, very good product, why isn't it on the shelves in every good skincare company?

Like if it is the best cleanser in the world, why has Mecca not been able to pick it up? I also think it's really important to touch on the fact that as much as you are a small part of a big company and they're empowering you to be a small business owner and, you know, do your own thing, there is no actual benefit to this because you don't get sick days, you don't get days off, you don't get annual leave. And a lot of people have to work weekends and nights just to try and make ends meet with these products. They don't pay you a wage or a salary or a base income or a retainer to make sure that

you do this. you only ever make money on the commission or from the people that you've recruited which means that everybody's clipping the ticket along the way so Georgia if I recruited you I'd clip the ticket on all of the sales that you make but the person who recruited me is clipping the ticket on both of us yeah and it kind of goes like that in a chain which is why the pyramid scheme makes a lot of sense Georgia I also think and I'm so ranty on this episode so I do apologize but lots of MLMs also encourage you to capitalize on devastating moments and i know that that's probably not the first thing that you guys were thinking of so i was actually reading an article the other day

that was written by a lady whose mother had just passed away and someone from high school had reached out to her sending love which was so nice but then she replied saying thanks and then tried to sell her essential oils to help her achieve carbonous so gross and then also tried to get her in her team because she was killing it etc yeah yeah hey girl it'll take your mind off you know the trauma that you're going through which is so unethical that is so unethical and so gross there is so much pressure which means people don't actually act ethically or put you in a situation where they are thinking of you well and i just feel like that is not okay and it is not it's not right like so many times i've been messaged and i'm probably putting myself in this position

just because I've got the Facebook group and I'm the admin of it. But I get literally messages every single day. So, Georgia, when we said, like, should we do an episode on MLMs? I was like, yes, let's talk about it. I get messages every single day from people saying, oh, hey, Victoria, I run this company. It's a really good skincare company. I'd love to tell you more about it.

Let me know if you're interested. And it just makes no sense. And then they want to post on the Facebook group because they want more recruits. And I have to say, look, I'm really sorry, like, we don't support MLMs. And they'll say, oh, Victoria, it's not an MLM. It's a network marketing business. I'm like, okay, like same thing. And they just seem to be so bought into the fact that, no, it's my business.

I run it. I just buy the product from here and it just makes no sense. And I just feel like these girls are hustling their butts off. Let's be honest, George, like they are working really hard, but direct your time, energy and effort into something that is actually yours. And I'm sure you would be wildly successful as well. this structure is just not sustainable for the long term i think the last point to note there as well victoria is that and you kind of alluded to it before but relationships can be ruined

through this kind of marketing like you're reaching out to carol from high school saying do you want to be a part of my team carol's not hey girl i just thought you had a baby yeah oh thanks yeah can i come over and show you my essential oil kit yeah no no girl so that relationship with carol is ruined but then also you get desperate and you go to your friends you go to your parents you go to your children you don't go to your children maybe some people do but it can be really damaging in that sense and then also because people are they're not doing this in the nine to five hours they're gonna have to work at night time in the day on weekends at every moment so they're going to be neglecting their families not in every situation but

I think that that's a really big risk as well there I totally agree and it makes me feel sort of strange because it's always people that I'm not that close with that approach me and I go oh how nice is that i'm hearing from xyz and they're like oh hey victoria i've been working as a personal trainer i'm like oh girl that's amazing congrats and then they're like oh and recently i've had heaps of success with this diet shake like would you be interested in trying it and you're like no i'm okay um yeah and facebook makes it a lot easier than back in the old days as well like it's prolific absolutely but i think if we're going to talk about facebook and social media did you know that if you are part of an MLM you cannot pay for any advertising on your product I did not

know this why is that because they don't want you advertising it it's all network you have to go to people so you're forced down the route of directly contacting people instead of you know maybe starting a social media account and growing the business that way and putting some you know some money behind an advertisement so that you can actually get your name out there yeah that's not allowed you can't actually pay for advertising and if you're going to start a business online you're not actually allowed to talk about the price of the products online and there's just so many catches that make it seem so non-transparent and just not genuine that make me feel really uncomfortable and the annoying thing here is like some of these businesses actually have products

that I like like don't get me wrong like I have purchased doTERRA and I loved doTERRA and I have a really great friend who actually sells it and you know what she's beautiful she does the right thing you know what she has this beautiful lifestyle and essential oils really align to what she's doing she is at no point pretending that this product is actually going to solve world hunger or anything like that she's just like yep i think people lack them and this is you know what it is i also love essential oils like i love my diffuser georgia would know that there's a couple in our offices and i just feel like it is a really nice product but i don't believe that that structure needs to exist to sell a beautiful product. Like I am attracted to that

as a product, but will I purchase from it moving forward because it's an MLM now that I'm educated about what it actually is? No, I won't. I'll go and find a different source. So I think it's really important to just be educated about things, but yeah, it's, it's really, really interesting how it actually works and what it actually means. And sometimes you can just get so wrapped up in it without even realizing that you're being sold to because as we're talking before georgia there are so many transparent ways that you see people recruiting you like hey i'm a pt would you like to try these diet shakes but then you also see you know influencers online using this product yeah and then you go oh i'd really like that product and they're like oh you have to message

this person to get access to it you're like okay no problems like and you want to do it because you want to try this product because you've just got this idea but that's all part of the trap right so from the sounds of things victoria it sounds like you are significantly more likely to lose money than make money despite all the promises of these companies right absolutely and i've done some research because we always do research because stats gal um but the loss rate for mlms here in australia is 99 do you know what that means that means that less than one in 100 mlm participants make a clear profit and at least 99 out of every 100 people engaging in these actually lose money, which is insane, Georgia. And do you know why that's insane? Because if

you compare that to research by the Small Business Association, it found that 44% of small businesses survive for at least four years. So if you're going to put this time, energy and effort into something, you are actually better off putting it into a small business that you own and run yourself because just looking at the statistics, you are more likely to be profitable and successful by running your own thing than you are from actually engaging in an MLM because to actually progress in an MLM, you need to recruit people underneath you to sell product as well. And that's just not feasible for most people. Whereas in small business, you can run your own show and you can be in a situation where you actually have control. I actually think it's a bit crazy

how promoted these are, yet the stats are so wild and bad for us, but no one ever really talks about that. Well, exactly. Here's another stat for you if you're interested, Victoria. Yes, stats now come at me. So a study out of America, again, found that 95% of people within MLM companies dropped out within 10 years because it is just so unsustainable. 99% of them aren't making any money. They're losing money. Exactly. So I think we really need to be talking about this. People just don't know. People don't know and they don't know what's good for them either. And I think that an MLM makes you feel incredibly supported and incredibly comfortable. So if you've ever been in a situation where you've said, I wish I could just do my own thing, but I'm not confident enough

to do it. MLMs will pick you up and say, Oh, we'll give you the team support. We'll give you the product. We'll give you everything. You can be a girl boss and run your own show. And I just feel like that is preying on people who are vulnerable and just need to be built up so that they can run their own thing because you can do it and you are completely smart enough and you are successful Dumber people have done better things, Georgia, than a lot of us. And I just feel like we need to have some conviction in ourselves instead of relying on someone else that sells us a dream that puts us in a position where we are not financially better off.

So I feel like the message of this podcast has been pretty clear. We should be staying away from MLMs where we can. But are there any words of wisdom you'd like to leave us on, Victoria? Yeah, as you said, I think avoiding it where we can. if you're already involved with one like please don't get me wrong i'm not trying to throw everybody under a bus here but i really want you to be educated on something like this i want you to know that you are completely capable and you have the ability to build a business and generate your own revenue especially if you're putting all of that time and energy and effort into somebody

else's i think we also need to really remember that people working with mlms as distributors are often told to fake it till they make it to entice other people to join their quote girl tribe or whatever it is and I think that we just need to be really wary of this and stay vigilant like sometimes if it is too good to be true it often is and I think that as much as your friend is trying to recruit you or you know the girl you went to high school with that you haven't spoken to in 12 years is trying to recruit you into a business like have a little bit of a think about why that might be the case like why is she so desperate to give you this opportunity after having not spoken to you for the last 12 years and something else that's really important to me

is that if financial freedom is your end goal and to Georgia King if anyone is listening to this podcast I really hope it is your end goal a better decision would potentially be to invest in your education or resources you need to pursue a more reliable and stable career instead of spending money on an MLM to get started with a starter kit and then having to buy their product to sell their product to stock it so that you can get it out to your quote clients and I think that you know finally i just really want to round this conversation out here by adding that there is absolutely no judgment here if you are a part of a business that works to an mlm model and if you you can make it work like incredible amazing like i'm so here for you as a business

person i just feel like there are so many negative things associated with mlms that we need to talk about this and we need people to be wary because recruiting people can often be really unethical We just really want to shed light on this topic today as we thought our community really could benefit from understanding MLMs a little bit more just so they can be informed if they ever approach to join our MLM, which I know, especially at the moment, is happening more and more. And I know this because I am being approached myself. Hi there.

You've reached the She's On The Money mailbox. Do you have a money problem you want help solving? Do you have a money dilemma you just want to chat about? Victoria is here to help. Every week, we'll be playing your questions to help make sense of a money mess you may have found yourself in. Make a quick recording on your phone and send it through to podcast at shoesonthemoney.com.au

and you might even find yourself on the show. But for now, here's today's listener question. Hey, Victoria and Georgia. Like a lot of people, I have lost my job this year because of COVID. I'm a uni student studying nursing and I'm living at home and I was working part-time in hospitality. but I'm now just getting payments from the government and I'm feeling a little bit helpless.

My friends work with doTERRA and says it's a really good and easy way to make a bit of money, but I know MLMs have a bit of a bad reputation. Financially, do you think this is a good decision to start an MLM side hustle or am I better off doing my own thing? Can't wait to hear back. Based on today's conversation, Victoria,

I think I know what your answer is going to be for this one, but go ahead what do you think I think this is a really interesting one disclaimer this though sometimes there are some MLMs that work really well and they might fit really well into your lifestyle for example I know Tupperware is an MLM company but I also know there are some people who sell that who really like the lifestyle that affords them they're not looking to you know make a million dollars a year that's interested in having a couple of Tupperware parties with their friends and they just want to be in a position where they have a little bit of extra income but they're not completely reliant on it. If you're in a situation where you have lost your

job I'm not sure if an MLM is the right way to go about it because it's going to take you some significant time to build up enough of a base to actually have an income that could supplement the lifestyle and the income that you have lost. If it's a side hustle then absolutely sure like work it out yourself if you're comfortable with it after reading through their income disclosure statements and the rules and regulations associated with becoming a representative for them like as I said I'm not completely against it I just want us to be making educated decisions but I do think that if you have a skill or an ability and you want to start a side hustle you're potentially better off doing your own thing like side hustles are great there are so

many different things you could do you could be jumping on airtasker and doing little admin jobs or copywriting jobs for people or pulling together something or running errands or there are so many things that people do including online surveys and stuff like that that you can do online to actually generate some income which would arguably be a more solid income that doesn't require you to make an investment in someone else's product yeah a much um less risky choice yeah a much less risky choice we're not in a position where we need to take massive risks to be able to retain the lifestyle we want and we can actually do that in a more sustainable way and i just feel like maybe an MLM is a little bit risky in comparison to what you're trying to replace especially if you

were a uni student studying nursing like you're obviously not silly like go and do something that could help people go and do something that you know works for you online and I mean jobs are very hard to come by at the moment obviously but she is living at home she's still getting those payments from the government at the moment so she shouldn't be too stressed out like you might not have that income that you're used to but maybe just chill out a little bit don't get yourself into um a super stressful state um and I wouldn't have thought an MLM is a good idea that's my opinion yeah and I don't disagree with it but I'm all for people having freedom of choice and everybody making their own decisions but Georgia we're in a position where we just want you to make

the most educated decision for you and if you look at it and you go no sorry I really want to do this go for it I'm here for it like I want you to be happy and I want you to be in a position where you are actually being impactful. But we know that 99.7% of people will lose money in network marketing schemes. So for every 1,000 people who join an MLM, only three earn more money than they actually spend. Yeah.

So keep that one in mind. We hope that gives you some clarity. Hi, I'm 27 years old. I'm a recovering afterpay addict and this is my money diary. Now for the fun stuff. what good would a money podcast be without the pervy bits? It's time for Money Diaries. We started off by asking her about her attitude to money. I guess money always was important to me to, you know, like make sure I was living without

living paycheck to paycheck essentially. But I had a really bad spending habit and I just, you know, the money would hit my account and I'd be like, let's go out for drinks or let's go out for dinners, just frivolously spending my money. But now I suppose because I've had a little bit more direction from listening to the podcast and reading books like The Barefoot Investor. I have a better understanding of the value of money and the importance of creating wealth so that you don't have to struggle later on in life. So now I'd say I put quite a lot of value on money, essentially that I'm more aware

of it and I don't like to needlessly spend money just because I have to. Let's get into the juicy stuff. How much does she earn and how much is sitting in her bank account right now? I'm a registered nurse. Last pay year, I earned about $69,000. And in my bank accounts, I've got about $8,500 saved. And what exactly happens to that money after it's deposited into her account? Yeah, so I get paid roughly, again, depending on if I've worked weekends or nights, etc.,

about $2,000 a fortnight. So I have $1,000 that goes automatically into savings. and then I deposit about $841 into my bills account and the rest goes just into like my everyday spending account for groceries and bits and pieces. Alrighty then so how does she feel about investing? Does she invest and if so how? I've done a lot of research on investing well when I say a lot like not that much like reading books or anything like that but I've invested about a thousand dollars in a business using the CommSec app and I also use Raise. What about debts like credit cards or personal loans? When I started listening to the podcast in December

slash January, I felt like I was drowning in debt. Like I had nine and a half thousand dollars on a credit card. I had an afterpay addiction that was incredible. I was just using it for literally everything, Christmas presents, birthday presents. I also have my HECS debt and I had a car loan. But since then I've paid off and closed my Afterpay account. I've paid off my car loan and now I only have $4,000 owing on a credit card and $14,000 in HECS debt. Does she have any good money habits that she's especially proud of? I'd say my best money habit is I don't make a purchase on clothing very quickly. Like if I see something in the shops I definitely never buy it at that stage if I really really need it like

I'll go back a week later I've got that like mulling over process time and also just setting up the direct debits into my savings account because once the money's gone into that account I absolutely do not touch it. And what about her worst money habit? Previously my worst money habits were absolutely using Afterpay for anything I'd have money in my bank account and I'd just be like after pay it and then you know you just end up with like 10 20 after pays going at once and the balance like each fortnight is like hundreds and hundreds of dollars I was living with a housemate who's a nurse as well and we both started the same year so we were getting paid the same amount and she in December was like well I've saved ten thousand dollars this year and I was

like what the hell how have you managed to save ten thousand dollars like I literally have got no money in my bank account to show for this. So I just used all the tips and tricks that Victoria always says. So I did a consolidation of all my debt. So it's just now on one credit card at 0% interest for like 36 months. So it's not like I'm getting stung with the interest on the repayments. So what's today's money diarist actually saving for? What's her big money goal? So I'm saving for a house at the moment. That's my current big money goal. Like I have got the money in my savings account to pay off the rest of my credit card at the moment but I don't really feel the need to because I've got the zero percent interest so I'm just like slowly chipping away at

that one and putting most of my money into my savings because I know by the time that I'll be ready with a deposit that card will have been well and truly paid off. And how would today's money diarist rate her own relationship with money? I'd give myself definitely like this time last year a D. I was really struggling like I said as I said earlier I was trying not to live paycheck to paycheck but I essentially was living paycheck to paycheck I didn't have any money in my savings account I'd say now I would give myself a grade of a B because like I'm still on my journey I haven't reached that A plus stage yet where I've reached my financial goals I really liked it I felt like she had a lot of introspection and she felt like she was on the right journey you know

she's obviously gone through a lot and the amount of debt she was in obviously took her a little bit of time to rack up so it's not something you can just get out of immediately but I think that she's done a really good job and knowing that she's not living paycheck to paycheck anymore like that is such an empowering feeling yeah and we're so lucky that we do get to hear these stories being on the she's on the money facebook group all the time they come through don't they like we see the amazing things that people are doing and to be honest Victoria a lot of that is to do with you mate oh that's really kind but also she's closed her after pay and I'd like to just point out here like off topic of the money diary I never told anybody to close their after pay accounts yet

here you guys are just saying all right I'm closing my account I'm doing this I'm doing that all I said was spend more mindfully and if you can't maybe consider not having it and so you guys are all like you're right shut it down shut it down and you know what I kind of love it because I feel like every single person that posts in our group about shutting down their after pay is really empowered you can see it in the way that they're posting and how excited they are and you know 27 healing and learning said that she had an off-the-pay addiction so I feel like maybe it was a really positive step for her and I feel like all steps no matter how small they are actually really help us build a secure future financial life and it seems like she's on the

right track and that is where we will leave it today guys but before we do head off let's quickly wrap the boring but important stuff the advice shared on she is on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision and stress less we promise victoria divine is an authorized representative of australia pacific funds management proprietary limited abn 34132463257afsl339151 and as always a massive Shout out to our audio king, Ryan and Sean, for putting together today's podcast.

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which is super exciting. Incredibly exciting. We will see you guys next week. See you then, guys. Thank you for watching.