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(IT'S NOT WHAT "YOU MAKE" BUT WHAT YOU MAKE "STICK" TO YOU : MLM Network marketing secrets - is another great article about mlm, multi level marketing and a little about multilevel marketing on IT'S NOT WHAT "YOU MAKE" BUT WHAT YOU MAKE "STICK" TO YOU by David G. Eisenstein, Esq. The Network Marketing Industry has Many Million Dollar Earners but Few Millionaires As an attorney who has...)

IT'S NOT WHAT "YOU MAKE" BUT WHAT YOU MAKE "STICK" TO YOU
by David G. Eisenstein, Esq.

The Network Marketing Industry has Many
Million Dollar Earners but Few Millionaires

As an attorney who has practiced for a total of 28 years, licensed in California and Arizona, and having represented network marketing and estate planning clients for the past fifteen of those years, I have known many high income earners within and outside of network marketing. 

What separates the so-called "successful" people in network marketing from those who are "successes" in the corporate and conventional business world is that those from the corporate world have applied the lessons they have learned in that world to help them to accumulate assets, whereas most key distributors engaged in network marketing have never been supplied the tools to accumulate assets with their big commission checks.  

Almost without major exception, top earners in network marketing have gone through their money as quickly, or more quickly, than they have made it.  In other words, they have been ingrained in a "conspicuous consumption" mentality where "living their dreams" with fancy cars, lavish travel, and "digs" is better than the long lasting, perhaps trans-generational, effects of accumulating wealth over a period of years.   

The network marketing companies have been willing accomplices of their distributors to, and some have even required them to, live the "good life" through conspicuous consumption, the more conspicuous the better.  The network marketing mantra of constantly setting production goals which amount to ever more optimistic projections of future success, has resulted in many very capable and effective distributors living well beyond their means.

What it Means to Live Beyond Yours

When distributors regularly spend more money than they make, it means that they will be sinking more and more into debt, with a larger and larger percentage of their income necessarily spent on interest on that debt. 

Robert Kiyosaki (author, "Rich Dad, Poor Dad" series) has described "good" debt as that incurred for the purpose of acquiring an income producing asset, and "bad" debt as that incurred for the purpose of acquiring something that "eats" away at your assets, such as a yacht, or even non-income producing real estate with big monthly mortgage payments, like a residence which is way more elaborate than you need. 

If you acquire enough of this "bad debt" it will sink your ship eventually if not sooner, no matter what your income.   What spending beyond your current (not what you might project through optimistic "goal setting") income also means is you will not be putting away savings, a needed nest egg which will stand you in good stead, when the projections of greater and greater monthly commissions based upon bigger and bigger downline sales do not come to pass.  

Successful distributors must put more emphasis on wealth accumulation and they can lead their distributor groups in this area by demonstrating to their downline the principle of "paying themselves first."  Paying yourself first means to sock away as much of your monthly income as you can.  It is not being selfish to save for a "rainy day" or to build toward the future of your family.

Why Network Marketing Companies can Benefit Greatly from
Distributors Living within their Means through Greater Retention

Key, high income earning distributors do not become disaffected with their company because of a lack of earning potential.  They become disillusioned because they have nothing to show for all of their "success" at the end of the day.  They look around and see that they are mortgaged to the hilt on a home which, as a part of "living their dreams," was bought as a showpiece for their recruitment and downline leadership activities. 

They are up to their eyeballs in debt because they bought expensive showpiece automobiles with big payments and they have spent enormous amounts on lavish "showpiece" vacations and travel.   Now, when the company's sales are flatlining, these key distributors see that their ever-optimistic sales and recruitment goals that they have set for themselves and their downlines, are simply not going to happen. 

So they look around for greener pastures, not because they are unhappy with what they have built in their existing company, but because they are desperately seeking a way to bail themselves out of the demands they find themselves subject to because they have consistently spent more than they made.   

Precious little or none of the huge income they have made with their existing company has "stuck" to them in the form of wealth.  Everything they "own" is really owned by their lenders and "leased" back to them for their use as long as they keep making the monthly payments.  

Network marketing companies who recognize that their high earners will leave out of necessity to escape the debt-laden noose tightening around their necks, can actually immediately, and over the long term, enhance their retention of their key distributors by getting them training, just as the corporate world has gotten for its key employees and executives, in the area of financial planning.  

Once the ship has been righted and these key people get out of debt, their attention will turn to the equally significant benefits that come through estate planning.  More significantly for the network marketing companies though, is the fact that they will have eliminated the single most important motive their key distributors have for leaving them. 

That is, the all consuming and ever increasing "debt monster" created and fed by all too conspicuously "living their dreams" which must be financed by borrowed money.

Source: Law Offices of David Eisenstein, Esquire. - As a Supplier Member of the Direct Selling Association - DSA - Mr. Eisenstein is available to consult with or represent MLM, network marketing companies with legal needs such as lawsuits in the courts and problems with the FTC (Federal Trade Commission), state AG - Attorney General. Click here for more information