Monday, May 15, 2017

MLM and Momentum

Today's blog is not about physics, but rather the psychological version of momentum people go through on a day-to-day basis. Most people realize life has a lot of ups and down, but very few people pay attention to why these situations happen. As Newton's Third Law states, "For every action there is an equal and opposite reaction.", and this law not only applies to physics, but rather to life in general. Momentum is one of the most powerful psychological forces as it propels us in one direction or another, and often dictates the intensity of a situation.

Have you ever had a day where you felt like nothing you did was right? From start to finish, everything seemed to be wrong and there was absolutely no way to fix it. Furthermore, after each negative event, did you notice it seemed to propel you quicker to the next negative event which was more intense than the last? That is psychological momentum, and it can last for as short as a moment, or compound for what feels like a life time. We often refer to this momentum as luck, in this case bad luck, but it is really just our way of trying to make sense of a series of unfortunate events that happen to come closely enough together to compound on one another.

One of my favorite examples of psychological momentum is connected with gambling. There is nothing more fallacious than connecting momentum with gambling, and yet every compulsive gambler does it and tries to make the most of a positive swing. In fact, because of momentum people tend to lose their money more quickly than they would if they played consistently. I have personally witnessed people beat the odds in games, such as black jack, and still lose because they begin to raise their bets when they were on a "losing streak" to regain their losses, and yet they bet smaller or the same when they are on their "winning streak". In roulette, they have a screen that shows the previous spins results and what is considered a "hot" number or a "cold" number even though every single round is completely isolated and has no correlation to the previous rounds. This psychological momentum we invent can be extremely dangerous to our wallets when playing games of chance.

Unlike gambling, the worst chance to make money are MLMs as they boast record setting "loser" percentages in the neighborhood of 99%. If there was ever a time to fold, it is when you encounter a MLM. Not only do they prey on the most vulnerable people in society, but they consistently utilize psychological momentum to deceive their consumers. They will say such things as, "Get out of that dead end job", "Don't make a bosses dreams come true instead of your own", or anything along the lines of "We are the answers to all of your problems". They aren't looking for the people on a positive path in life that have many great things going for them, but rather the people that look at their situation and continue to think about all the awful "luck" they have had.

MLMs aim to be the momentum shifter and change all of that negative psychological momentum into a positive. Yet MLMs are some of the worst proponents of true psychological negative momentum. Whatever little a pre-MLMer has before MLM will vanish as they isolate themselves from their work, their community, their friends, and their families. MLMers will disappear from civilization and their money will vanish from their bank accounts. Only when an MLMer loses everything pursuing the "dream" will they realize that negative momentum was perpetuated by their own minds and the MLM was responsible for all of their bad "luck".


  1. That's the insidious part of Amway. Many times they recruit young and motivated people, although often gullible because they believe the lie that Amway is some kind of shortcut to retirement and a life of luxury.

    It's ironic that most people join because they wan more time and money. And because of Amway and the systems, they nearly always end up with less time and less money.

    Most people figure it out quickly, which would explain the massive attrition that plagues Amway and most other MLM. But some people really get sucked in hard, like my former sponsor who's still at it more than 20 years later. It's truly a waste of their lives.

    1. Joe,

      I find it terribly frustrating when I see young, hard-working, and motivated people with the right mindset to do well and be good get caught in the MLM (Amway) web of lies. They take that positive momentum and energy and thrust into a cesspool posing as an "opportunity".

      I really wish I knew what was so horrible about having structure and a job. I honestly feel like I would be a terrible person if I didn't do something constructive, such as work, with my time. These guys are so unbelievably entitled and narcissistic these days, and it is horribly frustrating to be considered part of the same group. I'm not going to pretend I love working, but I know that it is incredibly healthy for me and I love the fact that I contribute to my community in a positive way.

    2. When I was recruited for Amway, I was a young and hard working. But I fell for the hype that I could smash my alarm clock and wake up when I was done sleeping, which is what was pitched. I was in the work force for about 7-8 years so a shortcut to retirement sounded intriguing.

      Now, 20 years later, I am close to retirement at the age of 55. Fortunately my company has a pension plan and very fortunately, I continued to invest about 17%or more of my gross income even while in Amway so I've accumulated nice nest egg.

      With that I'll be traveling quite a bit and enjoying "freedom" that I thought Amway would provide (but doesn't). It is at that point, I may slow down on blogging a bit. :)

    3. Joe,

      That is fantastic to hear! You must have a serious nest egg if you are going to be able to survive for at least 30 years without an income (unless you have investments). That scares me more than anything is continuing to have cash flow. I feel like it doesn't matter how much I save, within reason, without cash flow, the money will dry up quicker than I will.

      I'm pretty young at this point and have a lot more time to accumulate REAL residual income, but even then, I don't know if I would ever completely retire (I say that now). I like the idea of waking up for something and continuing to produce for society. That is worth more to me than the opportunity to sit around and be taken care of with the money I saved.

    4. Actually John, I will have a pension coming in plus I own a rental property so I have enough income to pay my bills and some extra. Some of my investments will be liquidated and that will be my travel funds. I've been saving and investing for a long time. I worked 2 jobs when I got out of college and although it felt stupid when I was young, I invested more than most people my age. I'm sure glad I did it now that it's nearly 30 years later. :)

      My advice to young people is to save 15% or more of your gross if you can afford it and get a second job for a few years if needed, to invest in your retirement. When you reach your retirement years, you will be glad you did.

    5. Joe,

      That's some pretty incredible planning. I don't know of many people that would think to save that much of their income. I also know that most people my age could never afford to live on 100% of their income let alone 85% so that savings model is probably impossible, but that is still really cool that you were able to do that.

      I would say my wife and I put away about $1,250.00 a month in a savings account, and we also have another account with a small emergency fund in case we needed to make a very basic purchase. I haven't even begun to think about getting a house yet, real estate in my area is completely insane!

    6. Great job saving that much $$$ Dr. Doe! To be honest, I was no financial genius. I was lucky to have gotten some good advice to "suck it up" and start saving money for retirement while young because it may seem crazy but money compounds with time. When I started working full time, my company had a contract with Great Western Bank and their interest was 9.5%. I currently have a majority of my portfolio with Prudential earning 2.8%. Not a great percentage but ahead of inflation and a safe investment since I plan to retire in about 2 years.

      I was also lucky to have found a great deal on a one bedroom apartment for $500 a month which allowed me to save a lot of $$$ while I was young. I didn't purchase a home until I was about 35 years old.

      But as you know, as you get older, your pay goes up and your mortgage says the same. So now I see a somewhat early retirement. I hope my health remains good so I can enjoy it.

      Good luck to young up and coming workers. It's never too early to begin saving for retirement.

    7. My Ambot brother believed that once he achieved 'Diamond' he could retire and not only receive a large residual income for the rest of his life, but also that this income could be passed on to his children, and to the children of his children, etc. ad infinitum.

      This absurd comic-book story was set out in black and white in the pile of 'Amway' documentation that my brother had been given when he signed up. In other words, my brother had signed an incomprehensible contract of infinite duration, but when I later obtained a copy of the same standard documentation, I discovered that the 'Amway' company retained the right to terminate any 'Distributor' contract if he/she broke the 'rules.'

      Ironically, my brother had no children. Nonetheless, he was so deluded that he totally believed that, by my opposing his 'Amway' involvement and filing complaints, he could be deemed to have broken the 'rules,' and therefore, I was threatening his future security and that of his descendants.

      In comic-books, heroes never do banal things (like paying bills, taxes, mortgages, retirement contributions, etc.)

      Similarly, the 'MLM' comic-book story tells of a secure future existence (where no one does anything banal). Every obedient 'MLM' hero is prosperous and happy, because even though he/she doesn't have to work, he/she still drives a Ferrari, Bentley, Porsche, Mercedes, etc.

    8. David,

      That is an amazing observation! I never really thought about the way they ignore the practical, yet very necessary, tasks every person has to take part in (such as "bills, taxes, mortgages, retirement contributions, etc."). In fact, when I was being propositioned for Amway, they only mentioned how wonderful it would be as a tax write-off, but they still didn't mention anything about those continuous expenses. Furthermore, they didn't highlight a clear path to achieving the "heroes fairy tale reward", but rather suggested it would sort of happen miraculously as one day you would wake up and there would be all of this money and all of these things.

      After my "sponsor" asked me, "Would you shovel s*** for 2-3 years with no pay if you were promised to receive $250,000.00 for every year for the rest of your life." I never pursued asking how that would magically happen. I just took his word that I would be transformed one day and my windfall of cash would appear. Oh the naivety!

    9. John - In cults, the future secure Utopian existence is always on offer in exchange for your critical and evaluative faculties. Once these faculties have been shut down, victims can become quite literally enslaved, and they will dissipate all their resources to the benefit of their leaders no matter what suffering this entails.

      When you look hard at any cult's comic book-controlling scenario, it is always essentially the same. The members of the group are the heroes struggling to achieve Utopia and those opposing the group are the evil villains. Adult stuff like expenses and relationships don't exist when you are a selfless hero trying to save the world.

      It is no coincidence that 'Scientology' instigator, L Ron Hubbard, was employed as a penny-a-word writer of comic-book tales. In order to learn this trade, Hubbard read as many comic books he could get his hands on. He realised that their simplistic 'hero vs villain' plots were always essentially the same and that they could be produced almost mechanically simply by changing the names of the characters and the periods and places in which they were set.


  2. L. Ron Hubbard is an excellent example of cultism, for he consciously transformed what had originally been just some personal crackpot philosophy of his own making into a recognized worldwide religion. This was deliberately done, as a way to magnify his tax breaks.

    Hubbard himself knew very well that Scientology was nothing but a money-grubbing racket that ripped off and mentally enslaved its members. But as long as he was in charge of it and getting steady revenues, he didn't really care.

    Hubbard purchased Scientology's official recognition as a "religion" from the Clintons, those ever-for-sale political whores. When a cult becomes a "religion," money is what usually greases the skids.

    1. Anonymous - The full truth about how the boss of the 'Scientology' racket obtained tax-free 'religious' status in the USA, is not quite as simple as you state, but I'm sure you know that.

      Contrary to the organisation's own comic-book propaganda, 'Scientology' is not a 'world-wide recognised religion' (certainly not in Germany, France or even the UK).

      As long ago as the 1990s, German State agencies estimated that, in the entire world, there were no more than 50 thousands long-term core-believers in 'Scientology.' The organisation itself (has for years) claimed around 10 millions followers, but recruitment has been steep decline lately due to the organisation losing its monopoly of information about its leader's criminal objectives.

  3. I'm embarrassed. Got sponsored in Amway when I was 22. I thought I could build it, pay for college and have money to do fun stuff. Well, stuck around for 7.5 years, let Amway early this year, and it's bittersweet... Because although it's great to get away, I spend $6-8kish per year being "core", would've been able to pay off my student loan. Very expensive lesson. I'm honestly pretty upset and want to sue Amway and worldwide just to recoup my losses. But I don't know where to start. The most misleading, dishonest and predatory scheme ever.

    1. Hey Anonymous,

      Thank you for your comment and I am so sorry to hear about your losses. Spending between forty-five and sixty thousand on Amway would leave a sour taste in anyone's mouth. At least you are young enough to be able to recover, but still, calling it bittersweet sounds like some serious sugar-coating.

      I'm not a good reference for legal action. Ethan Vanderbuilt has written about starting class-action lawsuits against these companies, but that is probably a lengthy and expensive process. My best advice, and something you mentioned in your comment, is to take this as a "very expensive lesson", and do your best to not become a victim again. I know that sounds harsh, but it is better to not drag this out any longer, especially since Amway is extremely insulated these days (Betsy DeVos has become Secretary of Education, and they have donated millions to the Republicans).

      I would love to hear more of your story, if it isn't too painful for you. Your duration in Amway is far longer than most, since MLMs usually have a 99% churn rate by 5 years. I would be curious to hear about any brainwashing, manipulation, deceit, criminality, etc. Again, only if you are comfortable sharing this, and feel free to send it to me via e-mail at if you don't want me to post it as a comment.