Friday, October 18, 2019

Financial Freedom?

When I was an IBO, I often saw my upline diamond driving around town in his used Mercedes dressed in a business suit. I used to think why does he keep working if he can walk away and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios. The diamond is working to help his downline out of a genuine concern, or possibly he is working because he has to? The only difference now is that the diamond works the night and/or graveyard shift. Because many IBOs are building the business after they complete their day jobs, a diamond has to work nights and weekends to be able to meet and work with them. Some freedom. **We should also note that my former upline diamond dropped down to the emerald level around 2005 and has since re-established his diamond level a few years later. Who knows where he's at today?

Now Amway has stated that the average diamond earns about $150,000 a year.   However, not Amway reports that the average diamond earns $600,000 per year but that is for Q12 diamonds.  My informed guess is that regular diamonds The Norm) still earn about $150,000 a year, maybe a little more or less.  That is a decent income, but after taxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts. There is no large barrels of cash rolling in with no work.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining their group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin. We had "play days" and had the opportunity to "earn time" with the diamond.   Some IBOs went into massive debt to buy their next level because they wanted time with the diamond so badly.  It's really sad.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle. Sometimes I wonder if diamonds can actually afford to fly first class to all functions?   Do you know what a first class ticket costs from Hawaii to the mainland US for example?   I can fly coach from Hawaii to California R/T for around $600 but first class would cost about $1500.  Not a big deal for a diamond?   Try paying for a wife and 2 kids plus yourself.   Now you're paying $6000 for airfare to a function not including hotel and other expenses.  Can you afford that with numerous functions each year?   Probably not!

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a very middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nights and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next.

I believe that diamonds may actually be busier at the diamond level than an average Joe who has a 9-5 J-O-B. The difference is that the diamond works the night shift. Is this the freedom you are seeking?


Experienced Emerald said...

It's funny. Most people on these blogs act as if there is a mystery to where the income comes from. Let me confirm what everyone is asking and tying tentatively. The Diamond income absolutely comes from the system. Yes there is money coming from the IBO comp plan but it is tiny compared to other MLM. Amway never fixed the comp plan because they frankly, never needed too. The heads of Internet, N21, BWW, Worldwide and LTD had so much income coming form the systems that they never needed to address the comp plan. Amway peaked in 1998 and thats when so many diamonds were making huge money. Millions. 90% coming from the system. If you look at all of the big groups there really have not been many new diamonds. Even in the Quixtar days, there was very little growth and very few pins.
Today, most of the new diamonds have gone diamond by orchestrating their Diamond Run. A lot of smoke and mirrors. Log on to Amazon and you will see Amway products for sale. HMMMM, I wonder why they were ordered? Can it be bracket chasing and then non compliant sales?

I write from a position of extreme credibility on this subject. In my Amway business I had 4 legs over 7500 and had 27 downline Silvers and above including 4 Founders Platinums. I had close to 300 people attending functions and my highest year of earning from the actual Amway plan was just over 79,000.00. Of course, I had other income from speaking and tool flow. All legit, I have all of the 1099's still. I am currently still an Amway distributor although I have not been active since 2007. My monthly income from Amway still to this day is about $700.00 per month with absolutely no expenses. Since I went inactive in 2007 I have made $136,000.00 without attending any functions or buying an audio. Pretty good business. No tools, and no one has invited me to speak. LOL

I have friends who at one point were diamonds and have since left the business for other MLM, some are still involved in Amway. It is one of those scenarios, they are making too much to quit but, not enough to impress anyone. I would imagine it would be very tough to attend a function where a few years ago there were 10,000 people and today there are 200. Literally. How do these former diamonds who today are barely qualifying as Platinums have the guts to get in front of people and act excited and motivated.

My former upline Diamond is no longer even a qualified Platinum. I know for a fact that up to 90% of their income came from tools and functions. Today they are broke. Several Diamonds have been in foreclosure and bankruptcy. It's all online. I feel bad for all of the suckers that keep blindly following uplines, keep going into debt just for recognition and spending all of their money on functions so they can hear the same thing repeated over and over again.

My business was bigger than 99% of all Amway distributors and I saw the light, so should they before they all go broke to support someone else's fake lifestyle. If the income came from the plan, I would have a different feeling. Oh well, enough said.

Anonymous said...

The one advantage that an Amway Diamond has is that he usually doesn't need to recruit, since his down-line (especially the Platinums) generally do all that hard work. The Diamond's job is to keep his down-line busy, by speaking at meetings, encouraging established IBOs and urging them to recruit new members, and of course by travelling to the various functions. And he has to talk a lot, like a politician.

But he has to do all this ENDLESSLY. He can't stop. If he does, his down-line will slowly break up and dissolve.

The Diamond DOES NOT have a "residual income." Even Amway has forbidden its members to make that claim. A Diamond's income, no matter how large, depends on his continuous effort to maintain his down-line structure.

Joecool said...

Experienced Emerald, I thank you so much for sharing your experience and insight on this subject. What you claim is what I suspected. That you can have some "residual" income from Amway but you won't be jet setting and living high on the hog. I believe the tool money is the key to everything and it is why diamonds never "walk away" because they can't walk away and collect tool income. Diamonds just have a different job, although you can argue that working functions is better than a 9-5 situation.

The "residual income" is from speaking and working functions, provided you don't quit or die.

Joecool has been retired for some time now, at the age of 55, and my "work" is blogging, even without pay, because I have enough income and assets to be retired and I don't need to work for money. My Amway experience taught me a bit about money but I also realized that MLM and Amway is useless for financial security, unless you own Amway.