Better Than Amway?

 One of the silly comments I often receive on this blog is that Joecool should offer suggestions about what might be better than Amway since I make comments against the Amway opportunity. First of all, I would like to make clear that most of my point of contention is against the tools companies and not Amway itself. Having said that, I believe Amway can and should have done more to prevent IBO abuse by upline and tool selling companies. But I believe Amway has not because the uplines are the ones who recruit new IBOs and teach (defacto) 100 PV quotas to new IBOs, thus keeping Amway sales consistent. Uplines also teach product loyalty.

But what can be better than Amway? Well, since most IBOs earn less than $15 a month, there are many things better than Amway. I might add that the $15 I refer to is gross, not net income. Thus, after expenses, the vast majority run their Amway business at a loss. Working part time for minimum wage would be more beneficial to most people who get involved in Amway. Buying and selling items for a profit on Ebay is likely to get you more income than selling Amway products. Heck, a lemonade stand on the roadside is likely to get you more net income than an Amway business. Since most IBOs lose money, staying home and watching TV makes you better off as well.

What makes the Amway business financially dangerous to many, is not Amway and Amway products, but the involvement in Amway training such as voicemail, standing orders, functions and other materials. This training is promoted as the key to Amway success, but as far as I know, there is ZERO unbiased documented evidence that any of this materials work. In my old LOS, Worldwide Dream Builders, or WWDB, the same leaders I saw 12 years ago are still (minus those who left or passed away) there and there are no new diamonds that I know of. I would guess that there were "some" new diamonds, but there are also many diamonds who are no longer in business. Kind of makes me wonder why diamonds would quit or resign from Amway if they could "walk away" and continue to collect "residual income". Perhaps this residual income is a myth perpetuated by your LOS. Afterall, Amway doesn't mention anything about residual income and income from your business would come from Amway.

What is really discouraging is that so many eager and motivated people get caught up thinking their financial dreams and goals will be achieved by their involvement with the Amway opportunity. Sadly, most will end up losing money because of the very training that was supposed to bring them success! Even the fiercest of Amway defenders have no documented proof of success. It appears that Amway success is elusive even to the most dedicated of IBOs.

So, what's better than the Amway opportunity? Seems just about anything. In fact, if you are involved in the training system, donating $100 a month to charity and doing nothing else would make you better off financially than participating in Amway and the related training. Doing nothing would make you better off. Watching football games would also likely make you better off financially than Amway and the training systems. My recommendation (but you must make your own decision) is to simply find part time work and invest your extra income wisely. It isn't quick or flashy, but you are likely to benefit long term. Of course, your mileage may vary. Good luck on whatever you choose to do.

Is Your Upline Rich?

 One of the things so many Amay IBOs and others do is assume that their upline diamond is rich beyond belief. At meetings, the speaker would be introduced as being in the top one tenth of one percent income bracket. While it may or may not be true, nobody ever questioned it, they just assumed it because people saw pictures of mansions and copies of 5-10 year old bonus checks. Even I never went and studied how the diamond bonuses worked. Most people just assumed that the money would be huge at the diamond level. But looking back, I can recall some things that make me believe that the diamonds were cutting corners and needed their platinum's working free in order to maximize profits.

The diamonds in our group often did not stay in hotels when visiting for a board plan, but in the home of another diamond or some lucky downline platinum. The diamonds rarely rented a car. Instead, a downline platinum or higher would be lucky enough to be the unpaid and uncompensated chauffeur for the weekend. The platinums basically were the doormen and ushers at the functions and in many cases, probably didn't even get to hear the speakers since they were busy working. Their reward for their troubles was "spending time" with their uplines.  Imagine that, working for free and being a chauffeur and doorman is an "honor"?

The downline are like unpaid volunteers. For example, ever see diamonds actually renting a moving van and hiring movers? I believe most of them had downline groupies who did the work for free, just for the honor of being near their upline. Just my opinion, but if these folks had mountains of cash, why wouldn't you hire movers so your downline didn't have to use up a valuable Saturday or Sunday to do that work? That's like having all of their stores closed. No products sold, no new recruits prospected. If Ray Kroc moved his residence, would all the nearby McDonald's owners close their stores to help him move?   I used this example since upline often use the McDonald's franchise in their examples of why Amway is a good business to join, even if an Amway business has nothing to do with a McDonald's or a franchise business.

Another things IBOs and prospects should note is that pictures of mansions, sports cars and jet skis doesn't mean someone is wealthy. Someone could have all those things on credit or rented after all.  And many people who truly are wealthy, do not show off their wealth. It is possible that many diamonds live mundane middle-class lifestyles on their income but need to portray wealth to lure in new IBOs. While your upline diamonds may act and look rich, how would you really know? I can take a homeless guy, clean him up and put him in a suit and a sportscar and he would probably look like a diamond.

If your uplines are implying that they are so wealthy, ask them to verify some of the claims. I'm not talking about their personal income, but in business, verifying business income is very common. If you are being invited into the business and a business system such as WWDB, BWW or N21, you have every right to check your upline's credentials. Avoidance of the truth, or an answer such as "none of your business" should be a red flag. It is your business if you are being asked to join and follow upline advice.

Amway Creates The Most Millionaires?

 I hear from some IBOs that they believe that Amway has created more millionaires than any other company in the US. I call BS on that claim. I am not saying that Amway hasn't created any millionaires, obviously, the Amway owners are worth billions of dollars. But what the IBOs are apparently implying is that the diamonds are millionaires. I'm sure there are some diamonds who indeed are millionaires, especially if they are tenured diamonds, in particular the double diamonds and higher. But conversely, I believe that many high-level diamonds are not millionaires. I believe it is just as common for a diamond to be in debt as it is for a diamond to be living large. I also believe that many diamonds did not accumulate their alleged wealth exclusively from Amway.

The reason why this is an issue is because these big pins will stand on stage and show off excessive wealth and imply that it is their Amway income that pays for these mansions, sports cars, and in some cases, jets. In the US, I attended a function called "Dream Nite" where these kinds of trapping are displayed, to the tune of the song "I wanna be rich". The diamonds would say that you can have what they have, if only you will do what they advise. These functions still go on today and I believe it is now called Winter Conference.

Stanley and Danko's book, "The Millionaire Next Door"
http://www.personalfinanceplaybook.com/2009/08/the-millionaire-next-door/

This book makes some very interesting points which I believe applies to Amway diamonds. I will outline the significant ones and I will comment below:

**Predictably, the data shows that most people who you believe to be very rich are not.

**High net worth individuals, statistically, tend to be people that live within their means. They don’t spend a lot of money. They don’t waste money. They tend to be pretty frugal people.

**The authors point out that most of the richest people you know aren’t driving expensive luxury automobiles. That’s what the people who want everyone to think they’re rich drive.

Joe's commentary. The book does say that about 1/3 of millionaires acquired their wealth thru a J-O-B and saved and invested, but did mention that many millionaires were also business owners, such as a pest control company, etc. But based on the points made by the book above, I can see where it is likely that diamonds portray a wealthy lifestyle as a recruitment tactic, when the reality is they may be living very middle class lifestyles off stage, or may even be in debt. I have seen evidence of diamonds having their homes foreclosed and being in debt (Ruth Carter's book: Amway: Behind the Smoke and Mirrors). Recently, there was also a report that Triple Diamond Greg Duncan filed for chapter 7 bankruptcy. The report indicated that he could not make his mortgages, or something to that tune. Odd, because when I was in WWDB, some of the upline leaders said diamonds paid cash for everything because paying interest to the bank wasn't very smart.

My question is why IBOs continue to make up these claims? Try googling millionaire or Amway millionaire. There is nothing to indicate that Amway was responsible for creating the "most millionaires" of any US company. If this were true, wouldn't Amway state it on their website? If someone finds any veracity about this claim, inform me and I will post it.  

I will also add that it's ridiculous to even think this claim is remotely true.  NVDA (Nvidia) is currently the most valuable company in the US sitting at about 3.5 trillion in valuation.  Amway is less than 10 billion if I'm not mistaken.  Does anyone really believe that Amway has created more millionaires than NVDA?  I'm almost certain that a large number of NVDA employees are millionaires or multi millionaires and much greater in number than Amway.  But this also illustrates the lengths upline must go to deceive their downline.  In the end, putting lipstick on a pig is still just a pig with lipstick.

Whose Success Is Wanted?

 One of the things my upline leaders used to always talk about was how they wanted everyone to succeed. Looking back, I believe they were lying and simply wanted the faithful downline to keep spending money on tools whether they succeeded or not. Now I am not claiming that every single upline leader does this, but primarily the ones who run "systems", such as WWDB, N21, BWW, LTD and some others.  Based on what they say and teach, this is the only plausible conclusion I can make.

When I stopped and really thought about it, pretty much every piece of advice I received, I had to pay for. Voicemails, standing orders, functions, open meetings. I know these are supposedly optional, but in reality, they are a defacto requirement. Anyone with a "dream" is going to buy the tools because the leaders will tell you that you cannot succeed without tools. Ironically, the same leaders will blame individuals and cite personal responsibility for the failure of downline IBOs, even the ones who did everything they were told.

The leaders are edified and touted as having great business and financial acumen, thus not following their advice would seem foolish. Yet Amway defenders will try to claim that IBOs should discern the good and the bad and operate independently. It's a redundancy that many people do not see. Sure, a downline should not jump off a cliff because upline said they would pad their fall with a pile of cash, but many IBOs put in an earnest effort in Amway, only to fail because of the handicaps and reputation issues that Amway has. These IBOs are told they were lazy or quit too soon, or did not try hard enough. Yet the very few who manage to break thru are edified along with the system while ignoring the multitudes who do not make it.

The bottom line for IBOs and prospects to know, is that I believe most IBO leaders do not know you or care about you and your success. They are more interested in selling you websites, voicemail, standing orders and functions. They know that people will come and go, and they are perfectly happy replacing quitters with new people, as long as the system tools keep flowing. I believe some of the US diamonds are now hurting as Amway is apparently shrinking in the US. I read recently of Amway downsizing some of their operations, seemingly confirming that US sales are down. Also to note, Upline leaders would have to share tool profits with new emeralds and diamonds, which is why I believe they do not want new success.

I believe that Amway, other MLM businesses, Kiyosaki, or real estate gurus all have very limited or rare success with their financial systems. Informercials usually have a disclaimer that success is a "UNIQUE" experience. Amway is no different. But I believe in all of these cases, more money is generated in selling the system than by actually running the system. If not, success stories would be rampant, and people would line up to sign up instead of having to be deceived into even hearing the pitch.

NYC Mayor Part 2

Just a little humorous story to illustrate a point.  Tomorrow I'm back to focusing on Amway AMOs. 

The Tax System Explained…in Beer! Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. The men decided to pay their bill the way we pay our taxes, which went something like this… 

 The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59 The ten men drank in the bar every day and were happy with the arrangement, until one day, the owner threw them a curve ball - “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. From $100 to $80. 

 The group still wanted to pay their bill the way we pay our taxes. So, the first four men were unaffected. They would still drink for free. But what about the other six men?  How could they divide the $20 windfall so that everyone would get his fair share? The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. 

And so… The fifth man, like the first four, now paid nothing.   The sixth man now paid $2 instead of $3 The seventh now paid $5 instead of $7 The eighth now paid $9 instead of $12 The ninth now paid $14 instead of $18 The tenth now paid $49 instead of $59 (100% savings). (33% savings). (28% savings). (25% savings). (22% savings). (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But, once they left the bar, the men began to compare their savings. “I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he gotten ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!” The nine men surrounded the tenth and beat him up. 

 The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill! And that is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore!

New York Mayor?

 This article isn't so much about the politics of the mayor's race in NY, but I'm fascinated that a sworn socialist was elected in a mostly liberal based city.   I'm from Hawaii, and I consider myself independent even though Hawaii is a deep blue state where democrats enjoy a super majority in the state legislature.  But what I find interesting is I see fatally flawed policy that could be enacted if Zohran Mamdani wins the general election in November.  Of course, fatally flawed is in my opinion, and in some ways, can be compared to the fatally flawed systems that the AMOs push in Amway.  The systems are good for some people, but not the majority.

I'll cover some of the highlights of what I see as flawed policies that seem destined for failure.  First off, it seems that Mamdani ran an exciting campaign but It seems as if a lot of his supporters are young voters who are enamored with universal basic income, which is sounds good, except someone has to pay for it.  Mamdani's plan is to tax the wealthy, but NY already had a big exodus of more affluent citizens due to high taxes, and the plan is to squeeze the wealthy for even more.  Some may stock it out, buy many are already planning to bail to other states that are less (tax) oppressive.

$30 minimum wage.  Sounds great for many people, but many small businesses will fold because they can't sustain a business with high taxation and having to per employees approximately $60K per year to mop floors or do other menial tasks.   Part of Mamdani's plan is to have the city run grocery stores that sell at wholesale, making it cheaper for resident.  The flaw here in my opinion is that government rarely runs things more efficiently than private business, and secondly, how can you make goods cheaper when your labor at the stores will be $30 an hour minimum wage?   I don't even see how fast food or mom and pop restaurants can survive with a profit if they have to pay higher taxes and unsustainable wages.  It is likely to lead to more or complete automation, or business closure.

Replace the police force with social workers.  Last time I checked, the NY city subway wasn't the safest place on the planet and not having deterrents such as police officers are likely to turn the city in a version of the movie "Escape From NY".  How can businesses and citizens prosper when public safety is not secure?  The super rich can live in gated communities with hired security, but average citizens will struggle and as far as I know, cities that defunded the police or became soft on crime, had increases in crime and violent crime, unless perhaps they don't charge offenders with felonies, then pretend that crime is actually down in the city.  And even the average citizen can't defend themselves with arms because Mamdani plans to ban all guns in N.Y.  if elected.

Mamdani is also advocating for free child care, which on the surface sounds great, except that the workers must be paid at least $60K per year which means someone must still pay their salaries even if it's not the recipients of free childcare.

Rent control.  Mr. Mamdani wants to impose rent control and believes that the reason people are leaving NY is because of the cost of housing.  I don't believe that high rent is the main reason people left NY.  I believe it's a combination of high taxation, lack of public safety and apparently much greener pastures in nearby states such as Florida, New Jersey or Tennessee.  I don't recall any city that implemented rent control and had remarkable success.  And again, rent control is almost a form of higher taxation for landlords who are likely to face increased taxation, property taxes and less revenue as a direct result of rent controls.  

There are other highly controversial issues but I'm thinking that if elected, NY and Mr. Mamdani will become a real-life reality show or social experiment.  Socialism in my opinion always appeals to a group of residents that will seemingly benefit initially, but the flaw in all the free stuff is that it's not actually free.  Someone is still paying the bill and those who foot the bill often gets tired of it and exercises their option to move elsewhere. Some of the Wall Street giants are already planning to bail out of NY.   Socialism seems great on paper, but eventually, the government runs out of money to sustain their free programs.  I wish the residents of NYC well, but be careful who you vote for, you may get more than you bargained for.  

    

Who's The Loser?

 One of the things I recall as a "fired up" Amway IBO was thinking how sorry I felt for people who were not Amway IBOs because we were all going to be rich and everyone else was a loser. Our upline used to tell us that we were winners - and if you weren't a winner, then obviously, you are a loser. Many times, the term "broke" was attached to the term loser. That was my mindset back then but having been out of the system more than twenty five years, I can look back and laugh, realizing that the losers were the ones buying stuff they don't need, stalking people at malls and bookstores, and wasting their time and money on tapes (cds), books and functions. We were losing both time and money, which is ironically what we joined to attain more of.

What goes unnoticed in many cases, is how much time and money really goes down the drain for Amway IBOs who work the system. Your life revolves around the business if you are dedicated and hard core. You are always looking for prospects and people to show the plan to, and you have to rearrange your schedules, or outright skip social or family gatherings because of the never-ending number of meetings and functions, many of which teach you nothing about running a profitable Amway business. When I first left the Amway business, I was sort of angry at the time and effort that was wasted, along with the cash I threw down the crapper.  But really there is no recourse because I chose to participate, even if under slightly deceptive circumstances.

But after I did finally cut ties with the business and the people associated with it, I got back into a routine of sorts. I focused on my job and after some years of gaining experience and working my way up the corporate ladder, I received some promotions, and I retired before the age of 55 with a decent retirement income and will likely have my home paid off by then. So, while I did have to work a dreaded job to be able to retire, pretty much all IBOs are also working a job or business PLUS having to expend their time and money to run their Amway business which has little to no chance of providing a long term stable and significant income. And if I may add, it is the systems such as WWDB or N21 that usually end up draining the IBOs of the most money because of things like the functions, voicemail, cds and recruitment meetings.

So I will ask the question. Who's the real loser? The person diligently working and saving for their future or the person chasing a dream that is unlikely to materialize? Factoring in the expenditure of time also makes the systems even more costly than it appears on the surface.