Thursday, March 23, 2017

Amway IBOs Mistake Tax Refunds For Profits?

One of the things that I have observed is how IBOs are so misguided by their upline, that they think that their business losses, which result in a tax refund is a profit, or that they are getting a free pass with the government footing the bill for their standing orders and functions. In the past, IBOs have been audited and had many business deductions disallowed because the tax department ruled that they were not truly running a business, but participating in a hobby called Amway.

I know that most IBOs are deducting the cost of their training materials on their taxes, but the issue at hand is whether the training materials are resulting in increased sales for your business. If you are running a "buy from yourself" business, then there is a strong possibility that your expenses may not be valid deductions come tax time. If you are not selling products to customers for a profit, then there is a chance that your expenses are not valid deductions. It would be sad indeed to be audited at tax time a few years after you have been an Amway business owner, only to find out that your expenses are not valid and that you may owe tens of thousands of dollars in back taxes.

Another apparently common mistake of IBOs is to think that their business expenses are basically free from the government because they may end up with a tax return. Your expenses are deductible from your taxable income. Thus if you had $10,000 in business expenses, your return would depend on your tax bracket. If you are in the 15% tax bracket, then $10,000 in expenses would get your about a $1,500 tax return, depending on other deductions you may have. But IBOs get duped into thinking they made a score and now get back $1,500 when they may not have had a refund in the past. Obviously in this case, the IBO would have been better off saving the $10,000 and never getting involved in Amway. Some IBOs proudly proclaim their refunds as basically a windfall, almost like it is a profit. That is truly scary.

Folks, there is no free ride. If you are spending money on legitimate business expenses with an intent to make a profit, then there is nothing wrong with that. But if you are traveling to conventions hoping to learn the secret of sponsoring more downline, you could be walking on thin ice should the IRS ever decide to audit your business. There have been many cases in the past where not only did IBOs lose their shirts due to the business support materials they purchaed, but they got double whammied later when the IRS disallowed tax deductions, leaving them in financial ruin. I truly hope you aren't on that path.

Check out this link:
http://www.apollowebworks.com/amway/irs.html

"TRAVEL AND ENTERTAINMENT have always been areas of abuse. Sections 162, 262, and 274 are always applicable and sometimes Section 183. Since most of the travel is primarily to attend social gatherings for entertainment and motivational purposes, any real business purpose is suspect. Unless the taxpayer can show that attending seminars, meetings, etc., meets the requirement of Section 162, the travel should be disallowed. Amway people have been unable to show that attending these meetinqs increased their sales. The agendas of these meetings appear to be primarily for entertainment, socializing, and listening to motivational speeches. The meetings have nothing to do with promoting the sale of Amway products to the general public. In fact, Amway distributors are specifically warned aqainst mentioning either Amway or selling when recruitinq potential downline people. Since it is not likely that the taxpayer will increase his sales by attending these functions, then there is not a reasonable business purpose for the trips"

Wednesday, March 22, 2017

Amway Upline Credentials?

I recently read a comment from an Amway zealot on another blog. She mentions that someone's credentials (the credentials of an Amway critic) must be considered when looking at information that is presented. I will comment that showing me a sports car or a fancy suit is not proof of financial success. Telling the audience that you buy homes in cash is not proof either. In fact, some of these diamonds were found to have their homes foreclosed and some had financial difficulty, even though they at times had shown off pictures of their lifestyles. I believe that many diamonds are likely to be more like the general US population - in debt. In debt trying to portray a lifestyle that is unsustainable with their Amway and Amway related income.

I find this subject ironic because not one single upline leader, as far as I know, has ever supplied bonafide credentials about themselves. The audience assumes that the person on stage has certain credentials, but do they really? I will say that certainly, if someone is wearing a diamond pin for example, that this person has at least achieved the diamond level as recognized by Amway, but the level may not be current, and the level doesn't indicate the kind of income this person earns from Amway. (Joecool is criticized for being outdated even though I was at 4000 PV at one point in my Amway career)

What many people assume is that the diamonds buy homes and cars in cash, that they wake up at noon every day and participate in leisure activities all day while the cash rolls in. I have heard from some new IBOs, that their upline makes more money taking a crap in the morning than a critic makes in a whole year at a job. That IBO became quiet when some critics offered to take that bet.

But the truth of the matter is that as far as I know, only former diamonds have come clean about their Amway income. They are the only ones who spoke of credentials and accomplishments. Even critics of Amway will often openly speak about their experiences and achieved levels in the business. In the REAL business world, showing business tax returns and credentials are a normal part of doing business. It appears that only in the world of Amway is the supply of credentials and financial statements a big secret. Now I am not suggesting that IBOs or upline leaders should disclose their financials to the entire world, but certainly prospects and some downline should be able to see what their upline is doing financially, especially if that is the basis for purchasing their standing orders and function tickets. And I refer to business (Amway and Tools) income and expenses only, not from other personal sources.

I believe that IBOs and upline leaders do not disclose that information because it would not be beneficial to them. If it were, they would likely publish it freely, just as they flash around copies of checks. IBOs and prospects should take this to heart and ask upline the tough questions

Tuesday, March 21, 2017

Amway's Hidden Costs?

One of the things upline leaders do is to disparage people with jobs. Oh, they would say we needed people to wait on our tables and clean our toilets, but in general, jobs were put down and basically the group was told that Amway is their best chance at achieving financial freedom, giving them the ability to flush their jobs. Some upline might even show a video of someone who walked off their job because they made it big in Amway. Ironically, IBO's jobs are what funds their Amway businesses. Most IBOs would be out of business within weeks if not for their job income funding their Amway businesses.

The key selling point appears to be the 2-5 years of part time work rather than working a job for 30 - 40 years and then retiring on social security which may or may not be there when you retire. This plants a fear in people about the future and then the Amway opportunity is presented in a positive light because the Amway opportunity comes with a low start up cost. What uplines do not mention is how the opportunity can become a money pit as the monthly defacto 100 PV quota starts to add up. It is my guess that if people only bought items they truly needed, these IBOs would likely move 100 PV every three months, unless they are actively selling goods to non IBO customers, which also appears to be uncommon.

When an IBO finally agrees to register, it is then that the hidden costs begin to be revealed. Many uplines will introduce standing orders and functions and present these tools as vital to IBO success. Some upline may give you some free cds at first, but eventually you'll be told that a "serious business owner" buys their own. You will also be expected to do the same for your own prospects. Most new IBOs don't know better and feel subtle pressure to conform and give it a try. Some upline may loan some tools to downline in the beginning but evemtually, the IBO will be encouraged to be a "serious" business owner who should be purchasing their own tools to loan to their downline and the cycle goes on.

If you examine some version of the Amway recruitment plan, you will see that most IBOs are at the 100 PV level, which will reward you with a monthly bonus of about $10 or so. If that same IBO subscribes to the tools system, than IBO will likely be losing over $100 a month not including the product purchases. And because many IBOs have been convinced that working a job is so horrible, that they can be convinced that this condition of losing money is temporary and that untold wealth is right around the corner. Sadly, for most, this condition is the norm and even the sponsorship of a few downline, the losses continue to mount. Yet many are convinced that this is better than a job.

Ironically, a job allows people to pay their monthly bills, feed their families and many people enjoy their work and co workers. While upline leaders may convince you otherwise, it is this very same excuse upline leaders use when asked why they are still working instead of walking the beaches of the world collecting massive amounts of residual income. I would encourage IBOs to truly analyze their efforts in Amway and determine if it is beneficial to your finances. In most cases, your Amway efforts ONLY benefits your upline's finances. For most who get involved, the Amway opportunity is not better than a job.

Monday, March 20, 2017

The 2-5 Year Scam?

One of the things I heard, and is still promoted is the concept of a 2-5 year plan to financial freedom. As a prospect, 2-5 years of hard work in your spare time sounds resonable. Afterall, anyone can work an extra 12 hours a week for a couple of years with that kind of reward awaiting you at the end. The sad reality is that you are likely to suffer 2-5 years of financial losses without getting any closer to financial freedom.

When Amway morphed into Quixtar, a very relevent question was how many diamonds were "quixtar only", meaning they signed up in 1999 when quixtar was implemented and then became diamonds in the advertised 2-5 years. As far as I know, there were very few (if any) new diamonds. The new diamonds that were named all seemingly came from other countries, not the US or Canada. Even now, my former LOS (WWDB) is touting "double eagle rubies" which is not a recognized achievement by Amway (as far as I know), and there is no assurance that achieving such a level makes an IBO profitable.

Even today, I do not see a steady stream of new diamonds emerging from Amway. If the 2-5 year plan actually worked, there would be new diamonds constantly emerging. Instead, my former LOS (WWDB), actually has fewer diamonds now than back in my IBO days. And of those diamonds who remain, some of them had home foreclosed and it also appears that at least a few of them ran into some financial difficulties. Make me wonder what a diamond's finances actually look like. I suspect many of them live in debt, especially if they flaunt the "diamond lifestyle", which is probably not sustainable on diamond income as reported by Amway.

So while it might be possible to achieve diamond in 2-5 years (some may have done it), but tens of millions have tried. It is much more likely that you will win the lottery (provided you have a ticket) than it is likely that you will join Amway and go diamond. It is also unlikely that people in the US and Canada who join will go diamond in the advertised 2-5 years. The 2-5 year plan is not promoted by Amway, but by the LOS leaders. I believe it is a hoax and the numbers back up my claim. You are much more likely to be better off working part time for 2-5 years and saving and investing for your future. If not, you will end up with 2-5 years of losing money on functions and standing orders.

As many Amway leaders will state: Look at the fruit on the tree. In the US and Canada, the trees are bare.

Thursday, March 16, 2017

Your Amway "Rich Dad"?

Many IBOs seemingly have read "Rich Dad, Poor Dad" written by Robert Kiyosaki and they often will cite his cash flow ideas and his talk about earning passive income and using business as a vehicle to build wealth. But has anyone really stopped to wonder how Kiyosaki built his alleged wealth? He likely built his alleged empire by selling books and apparently scammy real estate seminars. I'm posting a 3 part youtube series exposing the scam and you can see Robert himself backpeddling when questioned about the very questionable practices in one of his seminars. He says he will look into things but as the video shows, these practices have been going on for years and years.

https://www.youtube.com/watch?v=HE6nT0oyPt8

https://www.youtube.com/watch?v=dv6feHB0AE4

https://www.youtube.com/watch?v=9iimvyVCEGA

You can view the videos and judge for yourself. I was appalled that this kind of scam is allowed to go on. These hucksters need to be in jail. But since the authorities don't stop them, the best way to help people to avoid the scam is to educate them so they don't get enticed into signing up and literally throwing their money away.

Amway diamonds and Kiyosaki have no documented evidence of success for their "systems". I've seen Kiyosaki's infomercial for his "system" and after showing (unsubstantiated) testimonials, the disclaimer of "unique experience" streams in small print across the screen.

I encourage you to view the 3 short videos and I look forward to comments.

Wednesday, March 15, 2017

The Amway Business Costs?

One of the things upline leaders apparently do is to disparage people with jobs. Oh, they would say we needed people to wait on our tables and clean our toilets, but in general, jobs were put down and basically the group was told that Amway is their best chance at achieving financial freedom, giving them the ability to flush their jobs. Ironically, IBO's jobs are what funds their Amway businesses. Most IBOs would be out of business within weeks if not for their job income funding their Amway businesses.

The key selling point appears to be the 2-5 years of part time work rather than working a job for 30 - 40 years and then retiring on social security which may or may not be there when you retire. This plants a fear in people about the future and then the Amway opportunity is presented in a positive light because the Amway opportunity comes with a low start up cost. What uplines do not mention is how the opportunity can become a money pit as the monthly defacto 100 PV quota starts to add up. It is my guess that if people only bought items they truly needed, these IBOs would likely move 100 PV every three months, unless they are actively selling goods to non IBO customers.

When an IBO finally agrees to register, it is then that the hidden costs are revealed. Many uplines will introduce standing orders and functions and present these tools as vital to IBO success. Most new IBOs don't know better and feel subtle pressure to conform and give it a try. Some upline may loan some tools to downline in the beginning but evemtually, the IBO will be encouraged to be a "serious" business owner who should be purchasing their own tools to loan to their downline and the cycle goes on.

If you examine some version of the Amway recruitment plan, you will see that most IBOs are at the 100 PV level, which will reward you with a monthly bonus of about $10or so. If that same IBO subscribes to the tools system, than IBO will likely be losing over $100 a month not including the product purchases. And because many IBOs have been convinced that working a job is so horrible, that they can be convinced that this condition of losing money is temporary and that untold wealth is right around the corner. Sadly, for most, this condition is the norm and even the sponsorship of a few downline, the losses continue to mount. Yet many are convinced that this is better than a job.

Ironically, a job allows people to pay their monthly bills, feed their families and many people enjoy their work and co workers. While upline leaders may convince you otherwise, it is this very same excuse upline leaders use when asked why they are still working instead of walking the beaches of the world collecting massive amounts of residual income. I would encourage IBOs to truly analyze their efforts in Amway and determine if it is beneficial to your finances. In most cases, your Amway efforts ONLY benefits your upline's finances. For most who get involved, the Amway opportunity is not better than a job.

Tuesday, March 14, 2017

Your Million Dollar Amway Business?

So many IBOs mistakenly believe they will work for 2-5 years, own a million dollar business and retire from their jobs walking the beaches of the world while cash rolls into their bank accounts. Sadly, most IBOs won't get anywhere near to the dreams they were sold as prospects into the business. This in my opinion is the crime in all of this. To fill someone's head with false dreams and hopes and then profit off them by selling them tools that will not help to fulfill those dreams. In fact, the cost of tools is what sometimes leads to financial ruin for some IBOs.

Most IBOs will never sponsor a downline and many IBOs will not even have a single customer. What kind of business can become wildly successful and profitable without a lot of customers? It seems that only in Amway and some other MLM offshoots do we see this warped teaching of buying from yourself as a means to become successful in a business. Many people, desperately wanting it to be true, will buy in and give the business a try. Then after a while when progress stall or it becomes painfully obvious that things aren't working out as promoted, they get discouraged and quit. Most quit and never complain, partly out of shame, or perhaps these former IBOs don't want to complain about the friends and family who sponsored them.

I would challenge prospects to go and look at a million dollar business. Go to the mall and see what some bigger businesses look like. Does your Amway business resemble it in any way? Do you have customers in proportion to a million dollar business? Heck for that matter, does your upline diamond really have what looks like a millio dollar business or is their real business selling you standing orders and function tickets? It would appear that standing orders and functions are a million dollar business. Many unsuspecting IBOs are the customers of the tool and functions. Unfortunately, there is no unbiased documented evidence that the tools do anything other making your upline wealthy.