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The Truth About Network Marketing (MLM) When You're Destroying Debt

Will network marketing help me eliminate my debt faster?

The short answer: In almost all cases the answer is a resolute "no".

I'll go into the nuances of why I believe this in the post, but I wanted to give the short and sweet answer for those who are looking for it, so you can quickly move on to other things.

In most cases, the process of building a network marketing (MLM) business is a multi-year, resource (money) and time intensive endeavor to get to profitability (if you ever even get there).

In both my personal and financial coaching experience, your time and energy would likely be better spent on activities like: getting extra work (side hustling), selling stuff and cutting things out of your budget while you're eliminating debt.

You see, eliminating debt requires extreme focus and, in my opinion, trying to focus on eliminating debt AND on building a network marketing business are often at odds with each other.

In most opportunities you'll have to buy product to share or for people to sample and you'll likely have to spend money on marketing materials, events, etc., all of which serve to divide your focus when you're getting out of debt.

You don't need to divide your focus, you need to destroy your debt.

That said, we'll jump into some of details why I don't think MLM is the best option for newly minted "debt eliminators".


A Word About Network Marketing Or MLM (Multi-Level Marketing)

The, Good, The Bad, The Ugly...


Let me start by saying that I’m not at all an opponent to the network marketing industry.

There are some great skills and attributes it can impart on a budding business owner/entrepreneur. But even those positives don't automatically make me a raving fan in all cases. 

You'll probably find that my perspective a bit of a paradox.

Based on my 5 years of experience in the industry, I would say I'm largely neutral with a bent toward being necessarily skeptical.

Don't hear me wrong, there are some good MLM opportunities out there, but there are also plenty that I wouldn't walk within smelling distance of.

The point in sharing my perspective is to offer a more balanced view on the industry and offer some counterpoint to the hype you may have received thus far.

I'll give you some of the positive attributes as well as tell you the truth about some things they (in the industry) don't like to hear.


Excellent resource for budding entrepreneurs...

On the positive side, I was personally involved in network marketing for about half a decade.

I can honestly attest that it increased both my business acumen and my overall salesmanship. In his book, Rich Dad, Poor Dad, Robert Kiyosaki actually recommends network marketing for these very reasons.

And while I don't agree with Robert on all of his views about MLM (i.e. that it's the "business of the 21st century"), I do agree that MLM is a great vehicle for new entrepreneurs to (potentially) inexpensively engage in learning the skills they need to become successful entrepreneurs.

The courage and discipline required to constantly prospect for new customers and recruit new "downline" are a must to be successful in the industry. You HAVE TO learn these or you will fail.

I have to say that, while I had these attributes before MLM, they greatly increased in my time in MLM and have served me well in other (non-MLM) areas of my sales career and life.

Additionally, MLM helped me to clearly define my personal goals and my "why" for them in a way I'd never done before. It also caused me to become much more organized and strategic in my overall business planning and sales execution.

Very good stuff and I'm grateful for all of it.

But there is a not-so-secret dark underbelly in the industry that helped me to quickly understand why most people I attempted to recruit ran away screaming in the opposite direction.

That dark underbelly has mostly to do with 1) the “hype” and often overstated product benefit claims as well as 2) the many MLM leaders who mislead their followers as to the “results” (i.e. the financial gains and time frames for such) their reps will get if they “go all in” or “just don’t quit”.

The financial outcomes are often WAY overstated while the difficulty of getting those results is WAY understated.


MLM For People Trying To Get Out Of Debt

With that backdrop, I wanted to lend my “two cents” about the network marketing industry specifically for those of you who might be considering one of its many opportunities as a “side hustle” or as a vehicle to help you retire debt more quickly.

There is plenty to say about this and I want to discuss in terms of your possible current economic posture in particular.

Disclaimer alert!

Please keep in mind that his is my experience with the industry and how I advise my friends, family and clients when they intersect with a potential network marketing opportunity and ask for my perspective. 

So, please receive this as one dude’s experience as you consume the other mountains of content on the internet about this subject. Please take it with a grain (or ten) of salt. :)


My Personal Back Story


Brad & Angelica or "Brangelica" ...


My personal network marketing journey started in August of 2009, about a month after I met my soon-to-be-wife while on a two-week musical/missionary tour through Venezuela and Colombia.

Meeting her and knowing that we would be married, I got a glimpse of the slightly raised financial responsibility that our future would entail.  


For some more context, let me take you back a few years to July of 2006, when I left my last corporate sales job and was earning a living as a contract musician. I was blissfully playing the role of touring guitar player, recording studio engineer and music producer. I was scratching out a reasonable income for a single guy with no debt AND having a great time getting to travel the world playing music!

So get to debt freedom, from 2004-2007 I had devoured Dave Ramsey's Financial Peace University (FPU) program and obliterated over $43,000 in consumer debt in just 2 ½ years. I remember the day, May 8, 2007 when I closed on the sale of my downtown Atlanta condo (thereby eliminating the last $10k of my debt), as one of the happiest days of my life!!

Now that I had freed myself from the bondage of consumer and mortgage debt in May of 2007 (as it turns out mere months before the implosion of the real estate market later that same year.... Whew!!), I was free to pursue music as a career.


And there I was having met the woman who I would marry, completely out of debt and doing work I truly loved.

The problem was, I knew that I wouldn’t be able to support our new family on an itinerate musician’s income and I desperately did not want to go back into the corporate world. What to do?

I always knew I wanted to build wealth and for about a decade, I followed the mantra: “do what you love and the money will come”.

The doing what I love part was great, but the “money will come” part wasn't.

This tension was morphing into frustration with each passing year as I continued at a standstill from an income perspective.

I knew I was going to have to do something drastic to gain financial momentum, I just didn't know what that something was.


Enter Network Marketing

My first network marketing opportunity, MonaVie, entered my life through a fellow musician a couple of weeks after I met my future-wife while on that tour in Colombia.

Like I hinted at earlier, I was ready for an opportunity and actually looking. The timing appeared “perfect”.

Time for a pause to consider, "will network marketing actually help me here, or am I just being hopefully optimistic?"


I pretty much jumped in head first.

As soon as I saw my first home presentation of the product and opportunity, I was in!

"How could anybody NOT get this", I thought?! "Amazing nutrition, amazing timing, amazing company, amazing comp plan…”

You’ve probably heard something similar by now if you're looking at similar opportunities.

To make the long story short, here's how it all went down for me. 

In two and a half years of "getting after it", I personally sponsored 23 people and had about 250 people in my “downline” (that’s MLM terminology for other people I would be making commissions from that were recruited by me, my recruits and by others above me in the organizational structure). 

Keep in mind, only a small fraction of my downline were actually buying products or working the business.

And just as a heads up, it’s always that way.

That’s why you have to continue to recruit like a madman.

People will "get in" and then fall away very quickly because it's tough to sustain both the courage and necessary activity levels to recruit new folks.

So, I “earned" about $3000 the first year and almost that much the second year.

I approached just about everyone I knew and even reconnected with people I hadn’t spoken with in years to tell them about this product and opportunity.

As you can imagine, some were more appreciative than others about the reasons for my reconnection... :(

I hosted home "tasting parties", went to networking events, national company events and looked for any opportunity I could to grow my business. "Working the business”, I was.

Practically every single waking moment found me hustling because I wanted success very badly.


The Bottom Line As I See It

As you have or will come to find, network marketing has a bit of an odd reputation in our society that I didn’t fully understand when I first got into it.

Many people you approach have tried MLMs and have varying experiences, mostly landing on the negative side of the board.

As a result of those negative experiences, some people are downright offended by the very idea.

You have to learn how to cope with that attitude pretty quickly to not become totally discouraged. 

As I rapidly came into an awareness of this negativity, I wanted differentiate myself as fast as possible.  

Even though many of my friends complimented me for not being “that guy” (meaning they appreciated my being tactful about how I shared the opportunity and product so as not to alienate them), there was definitely relational fallout in the form of my personal reputation being tarnished for being involved in network marketing. 

And of course, not being a complete sociopath, this bothered me.

I knew that building a business usually required a degree of not caring what people think. That part seemed reasonable.

But as I got further and further enmeshed in MLM, I saw that the industry seems to take that to “not caring what people think” to a rather manipulative extreme.

I'm not going to minimize this part. Sometimes extreme negativity and rejection is something you will have to learn to deal with, especially in any kind of sales.

There will be people who completely change their perception of you and will sometimes not associate with you any longer if you become a network marketer.

That's a truism for you to consider.

And for me the response of my MLM leadership was just about always the same with regard to this phenomenon of virulent rejection and negativity.

In fact, leadership in most of these opportunities just brush it off (as I'm sure they must) and encourage people to "just ignore" the negativity and even to heap contempt on the disinterested you've tried so hard to recruit.

It's tough.

I realize that some degree of rejection and negativity are inherent in any sales role (remember, I've been in professional sales for over 25 years).

It's just that in my experience, the response of the public to MLM can be somewhat extreme.

This is an important factor to consider when contemplating entrance.


The Actual Numbers

So, I was doing everything my leaders were telling me to do and "killing it" activity-wise.

Could I have worked harder? Of course, you can always work harder.

But even my sponsor (who was an activity maniac) complimented my level of focused effort.

There were many times that I got frustrated and demoralized but, I kept plodding along adhering to the leaderships’ mantras: “It's a 3-5 year business plan” and “quitters never win and winners never quit”.

Always run the numbers with someone before you "enroll" or "sign on".


Do you remember those few thousand dollars I mentioned that I earned in years one and two?

Well, the unfortunate truth that I tried to hide from my recruits and friends is that I spent over $25,000-$30,000 to earn those dollars.

That's right, I got about a negative 90% return on my investment.

I spent that amount ($25-30k) on, product, marketing materials, going to conferences and on entertaining potential new recruits.

I did everything "the system" and the leadership prescribed for me to do to grow a successful network marketing business.

It just wasn't working and I was getting to the point of greatest frustration.

Eventually, my frustration level as well as the frustration level our team caused us to drop out. Like I said earlier it took about 2 1/2 years for me to get to that point, but once I was done, I was totally done.

I think you can agree that a 90% negative return on investment is not a sustainable business model, right?

I did move on to two other "opportunities", which account for the last 2 1/2 years of my "career" in MLM. The results were pretty much the same as my first opportunity, so I eventually fell away from network marketing altogether.


The Conclusion For Debt Eliminators

I know there will be people who read this and think, “man, you didn’t give it the full 3-5 years in that first opportunity”.

Maybe they’re right. I don’t really know. It doesn’t matter at this point.

There was no way I was going to put in another 2 1/2 years and spend another $25k to be "successful".

I really felt like I needed to cut my losses and it was very much the right decision.

All I know is what I saw, what I experienced and all the money I lost.

All I know is that I want to share what I saw and what I experienced with people, particularly with people who are trying to get out of debt and think that network marketing might be their “ticket”.

I think that you can tell by know that I honestly don’t think it is the ticket.

Verdict: "Nope", for debt eliminators.


Like I said at the outset, I’m not here to bash the industry, I really just want for people to know what they’re getting into when they sign up for a network marketing opportunity. 

So, particularly if you’re trying to get out of debt, I don’t think MLM is a good idea.

It’s especially a bad idea if there is any up front costs or ongoing product costs (which there almost always are). You simply can't afford it while you're still in debt.

So all of that to say, if you’re in the debt elimination process and considering entering into an MLM, I would say be very cautious and to a TON of research.

For my active coaching clients, I’ve actually helped some of them look at opportunities and have NEVER recommend that they move forward with an MLM unless and until they’ve eliminated all of their debt.

Again, my time in MLM was a great learning experience and, aside from all the money I spent/wasted I don't regret it over all.

I think it's an important part of my journey and I'm glad I did it. In retrospect, I probably would have "gotten out" sooner, but that is always the case with any kind of financial loss.

What I can say is that, overall my time in MLM helped me to become a better businessman.

And probably the biggest benefit is that now I get to share that wealth of insights and experience with all of you that are trying to get rid of your debt and are considering MLM to help you do that.

And that part (helping you) is incredibly rewarding. Let me know if/how I can do more of that.

Now, let's talk about the fastest, most assured way to get you out of debt!

The 8 Steps To Obliterate Your Debt

This is the blog post that outlines the 8 steps I followed to eliminated $43,000 in debt in 2.5 years.
And whether this is your first or thousandth time on the blog, I want to make sure you have this “8 Steps” framework that ALL of our content is centered around. 
These are the steps I personally followed to obliterate $43,000+ of debt in 2.5 years
Maybe your number is bigger, maybe it’s smaller. Either way the principles are the same and I want you to have them.
0. Stop All Retirement Investing (Until Step 4)
2. Starter Emergency Fund of $1000
3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)
4. Full Emergency Fund of 3-6+ Months’ Expenses
5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)
6. College Funding (if applicable)
7. Pay Off The Home Mortgage
8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!
I’ve created a simple, easy to follow guide that you can use as your foundation as you navigate the absolute annihilation of your debt forever.



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When You Need More Help

And again, if you’re looking for some resources to get started, you can download our free budgeting forms. Also, if you’re in a place where you’re ready to kick your debt in the teeth, here's the link to our free “8 Steps To Erase Debt” guide for you to use as your foundation.
To your freedom,
This post may contain affiliate links. If you click & make a purchase, I receive a small commission (at no extra cost to you) that helps keep Zero Debt Coach up and running. Read my full disclosure policy.

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