If you feel as if you are drowning in debt, you are most likely looking for a sure way to make more money, reduce spending and pay off your creditors. One of the easier ways to achieve this is to bring in more income. If you are strapped for time or unable to pick up another job in your community, joining an MLM and working from home may seem like the perfect solution. However, you may be surprised to learn that joining an MLM to pay off debt may not work as well as you would expect.
What Is an MLM?
The abbreviation MLM refers to multilevel marketing. Instead of the company selling their products from a storefront or online, they sell products through salespeople who work on commissions. Salespeople do not make salaries, and the amount they earn depends directly on what level they are at with the company. To get to higher levels and make more, individuals must sell a certain amount of products and have a specific number of recruits beneath them, known as their down-line.
While some MLMs are nothing more than dangerous pyramid schemes or illegal business setups, many companies do operate legally in the United States today. Some of the most familiar include Amway, Norwex, Avon and The Pampered Chef. Most provide discounts to individuals who sign up as new recruits, making it easy to fall into this trap. A legal ruling in 1979 judged that a company primarily focused on selling products rather than on gaining new recruits was a legal MLM.
Can an MLM Help You?
For most people, this structure keeps them constantly busy. What was promised as an easy way to make money can quickly turn into a time-consuming job of buying new products, traveling to company meetings and talking up the business to recruits. If you are planning on purchasing products from the desired MLM company and are merely planning on joining to get a sizable discount, then an MLM may be a good choice for you. However, for most people, joining an MLM to pay off debt is incredibly risky.
How Is Participating in an MLM Risky?
Multiple studies have shown that the majority of people who join MLMs end up breaking even or losing money over time. A 2018 study by the AARP Foundation showed that almost half of those who join lose money and another quarter of individuals simply break even. An even more concerning study published through the Federal Trade Commission that looked at 350 MLMs found that around 99% of people lose money with this scheme.
Sadly, most MLMs target people who do not have much money but who are looking for ways to make lots of money quickly. For example, college students and stay-at-home moms living in the suburbs are common targets. These individuals are often lured in by misleading information, not knowing that they will have to fund much of the endeavor by themselves. Most people who make money through MLMs gross only $1,200 per year before expenses.
In addition, the U.S. Securities and Exchange Commission, or SEC, warns against joining MLMs that are actually pyramid schemes. These fraudulent companies typically do not have an actual product or service, promise very high returns or an easy, passive income or require you to buy into the company. In addition, these companies generally promote recruitment more than the selling of any products.
What Could Actually Help You Pay off Your Debt?
You may feel tempted to join an MLM to pay off your debt, but you need to do your own research before signing up for the plan. Most people experience limited to no success when working in an MLM. In fact, many actually lose money, which is certainly not the right choice for you if you are already in debt. If you plan to use the products extensively yourself and are looking for a discount then joining an MLM may be right for you. However, if you are already in debt, your investment into a multilevel marketing plan could leave you worse off than ever.
What you need is a trusted and proven way to pay down your debt quickly and free up more monthly cash so that you can afford other integral parts of your budget. Debt consolidation can do just that. With this method, you will take all of your debt and lump it into one monthly payment. Christian Debt Counselors can usually get a lower interest rate for you to help you save and pay down your debt faster than ever. In addition, debt consolidation can make it easier for you to pay your monthly bills. It can even raise your credit score by shifting your debt burden from credit cards to a single loan.
Another option that is far safer than joining an MLM is opting for debt settlement. With debt settlement, Christian Debt Counselors will arbitrate a reduced debt balance with your creditors. Not only will we handle the difficult negotiating process with your credit card companies, but we also may be able to negotiate a lower interest rate on your remaining debt.
Both debt consolidation and debt settlement can help you avoid bankruptcy, which can severely damage your credit score. They provide real ways to help you pay off your debt. Whereas working with an MLM may or may not be successful, using debt relief can give you time-tested results. Every month, you will be able to watch your debt go down. You will have more money to devote to other needs in your budget, and you will not have to go to the work of finding customers, marketing your products and meeting high sales numbers as you would with an MLM.
If you are tired of living with high levels of consumer debt or debt from loans, turn to a trusted method to pay off debt and live within your means. Consider the debt relief options at Christian Debt Counselors for long-term success at meeting your financial goals.