What's Wrong with Multi-level Marketing?

In some areas of Mormondom, MLM companies and distributors are as ubiquitous as CTR rings and minivans. In areas like these, it's not uncommon to be approached by home teachers, visiting teachers, and other people in your ward about joining up. If multi-level marketing is the win-win situation many people tout it as, what's wrong with multi-level marketing?

Nothing, if you don't mind being a pawn in someone else's money-making scheme while you barely scrape by yourself. The danger is that you won't be told the real deal up front. Instead, you'll be given visions of grandeur. Writing for Forbes, Donald Frazier says, "some MLMs amp it up with messianic language and a powerful sense of purpose and community so that IRs stick with it to be loyal and keep friends, even when losing money."

For example, Bountiful-based ARIIX distributes dietary supplements through its multi-level marketing network, but the company's vision is "to unleash the human potential for good." Who wouldn't want to be a part of such a mission. Their website elaborates a little on this vision: "Our desire is to contribute to the greater good of every person we encounter because we believe that each one of us is linked together for a specific purpose." It's exceedingly difficult to find out how much you can make by selling ARIIX products. On the compensation page, you're told, "The possibilities are endless for what you can attain with the Activ8 Compensation Plan. by participating in the Activ8 Compensation Plan you will have access to a tool that can make your dreams a reality."

C'mon, seriously? I just want to know how much commission I'll earn when I sell my visiting teachers the Slenderiix weight-loss products because I already told them that "abnormal fat storage resulting from a suppressed metabolism is a disease of deficiency and co-existent toxicity."

It seems like I'm picking on ARIIX, but I'm just using it as an example. If a company is not willing to be up-front about how much the products cost, how much commission you'll make by selling them, or what you can expect from this "job," it's too risky.

Since multi-level marketing is so prevalent in some LDS areas, I've included a whole section of my book, Farsighted: The Mormon Mom's Guide to Money, to explaining its inherent dangers. There are so many legitimate, less-dangerous ways out there for moms to make part-time income from home. You don't have to resort to the confidence-eroding job of selling price-inflated products to your increasingly skeptical friends and acquaintances. Don't be a pawn. Take control.

Saving for LDS Missions

The United States tax code has given its citizens incentives for saving for education and retirement. Section 529 provides tax incentives for saving for college, and 401(k) and 403(b) provides retirement savings benefits. These programs are well known and used by millions of Americans to plan for events that will happen later in life. But there isn't a government-sponsored method of saving for LDS missions, so we have to figure out how to best do that ourselves.

The following are ideas for mission savings that you can use to help your children save for their missions, or they may help you to save for your own mission.

1. Matching Plan. Some employers offer matching plans for their employees' retirement savings. With 401(k) programs, employers can match up to 6% of the employees' earnings and deposit this money in their retirement accounts. When you offer your children a matching plan for their missions, you give them an added incentive, and you also teach them about their future investment strategies. Depending on how old your children are and how much they could potentially earn, you could say, "For every dollar you put in your mission savings account, we'll put in a dollar, too." They'll watch their savings accounts grow faster, which will encourage them to continue working and contributing.

2. CDs. Today's historically low interest rates are great if you're buying a house, but they're not so great if you're trying to save money in a traditional savings account. Today's saving account interest rates don't keep up with inflation, so it's wise to look for another savings vehicle. Certificates of Deposit (CDs) are a good alternative because they have higher interest rates, and you can't withdraw from them until the specified time period has expired. The longer the maturity length, the better interest you'll get. And your child (or you) cannot withdraw the money until maturity, so he won't be tempted to spend it at iTunes.

3. Money Market. Money market accounts are more liquid alternatives to CDs. You'll still get a higher interest rate than you would with a regular savings account, but you can access the money just as you would with a checking account. Money market accounts are a great option for older teens who are approaching mission age and are also learning to use a checking account. Most money market accounts allow you to write checks and use debit cards.

With the new, lowered age requirements for missionaries, starting early with your mission saving has never been more important, and many families will be sending more missionaries now that girls can go at a younger age. For more LDS financial tips, download Farsighted: The Mormon Mom's Guide to Money at Amazon.

How has your family saved for missions?

Free This Weekend at Amazon!

Download your free copy of Farsighted: The Mormon Mom's Guide to Money this weekend. It will be offered free through Monday.

Farsighted isn't one of those finance books that explains the ins and outs of the global economy. It's a down-and-dirty financial guide for Mormon moms in the trenches. It's conversational, to-the-point, and full of practical tips to get you out of debt and to start building a solid foundation for your future.

You'll get down-to-earth advice about the following topics:

• Earning More than You Spend
• Tithing and Charity
• Saving
• Investing
• Keeping Track of it All
• Teaching Kids About Money

Get your free copy today, and please write a review on Amazon after you read it.

Farsighted: The Mormon Mom's Guide to Money

Be the first in your ward to download Farsighted: The Mormon Mom's Guide to Money. In this conversational finance book, you'll learn everything from how to reduce your energy bills to how to invest in real estate. 

Mormon moms face unique financial challenges. In general, they have larger families than their neighbors, but they also have missions to save for and food storage to buy. Most basic of all, they pay tithing before they even begin budgeting for the month. These extra financial considerations require just that--consideration. But don't think you can't thrive. Mormon moms have the talents, the tools, and the moxy to see beyond today's financial temptations and to set their sights on a secure tomorrow for their families.

Farsighted: The Mormon Mom's Guide to Money gives LDS moms a new perspective. Instead of feeling the budget crunch of raising a larger family on less money, it's possible to put your many talents to work and broaden your vision. This book will teach you how to earn more than you spend, budget effectively, save and invest, and keep track of your finances like the pros.

Farsighted will be free on Amazon over the weekend. Download your copy here!

Release Date: January 18

My next book, Farsighted: The Mormon Mom's Guide to Money, will be released this Friday, January 18th. It will be available for free on Amazon over the weekend, so download your copy this weekend.

The Mormon Mom's Guide to Money can help you with the following topics:

Earning
Budgeting
Housing
Saving
Investing
Giving to Charity
Organizing Finances
Teaching Kids about Money

I'll post the link to Amazon's listing on Friday. Don't miss it!