Are MLMs a Good Source of Income?

Last week, I had the great fortune of appearing on the Money Mastermind Show. Though, I’d rather discuss diversified income streams and early retirement, I’ve reluctantly become somewhat of an expert on MLM/pyramid scheme fraud. Perhaps reluctant isn’t the perfect word, because I like picking puzzles apart and MLM/pyramid schemes certainly presents one of the more interesting puzzles.

For the first time in nearly 10 years of blogging, you can see me on video here:

If it looks like I’m staring off into space aloofly, it’s because I have this computer with an odd placement of a video camera in the lower left of the screen. Video is its kryptonite.

There are few things to note:

1. There was a surprise guest as an audience member with extensive experience in Mary Kay chimed in. Lauren Greutman of I am THAT Lady happened to be watching and was quickly brought in. She was one of the most successful people in Mary “driving a pink car” at the age of 25. (Yes, she used the phrase “driving a pink car” which sounded as odd to the Money Mastermind Show hosts as it did to me.)

2. It’s interesting to hear that Mary Kay is horrible, but not surprising because it backs up Harper’s Magazine and Pink Truth’s analysis. The sad thing is that people generally trust the Mary Kay and it’s this bad. Makes me wonder who’s getting caught up in Rodan and Fields.

3. I can’t emphasize how great it was for Lauren to come in and tell her amazing story. It is not to be missed. You’ll never guess how much money she took home after expenses as one of the most successful people at the company. (Well, if you are a regular Lazy Man and Money reader, you probably can.)

4. I would not have picked that title to discuss MLM. Since around 99.5% of people lose money in MLM, I think a more appropriate question would be, “Are MLMs a good way to lose your money?” or maybe, “What are the odds of breaking even in MLM?” (Answer: about 0.5% or less depending on the MLM.)

5. I could have gone on for another hour, but I’m fairly sure no one wants to watch the first hour. In a follow-up post, I might present a written “outtakes” version of things that we didn’t get to cover.