Disturbing Revelations From MLM Tax Returns
Posted: Tue Jul 22, 2008 5:20 pm
Nice work from Dr. Jon M. Taylor (MBA, PhD) over at Consumer Awareness Institute.
Disturbing revelations from MLM tax returns:
Tax professionals know who is making the money in MLM/network marketing and it's not the new recruits that are buying up products and sales tools to "play the game." See: "Survey of Tax Preparers".
(Or you can get a 12 page report in PDF format by clicking here.)
Conclusions from this survey are strengthened by household surveys on MLM participation. As further support of these findings, a much earlier investigation by the State of Wisconsin documented evidence, from tax returns, that Wisconsin Amway Direct Distributors (the top 1%) had annual net incomes of minus $900.
Gambling Beats MLM!
Where data was available, the rate of success for recruiting MLM's is abysmal. In fact, MLM makes gambling in Las Vegas look like a safe bet in comparison. Even clearly illegal no-product pyramid schemes do far better. Read "Some Shocking Statistics" to compare the likelihood of realizing a profit from twelve MLM programs, as compared with gambling and with no-product pyramid schemes. You will also get some great pointers on how you can do your own calculations of likely profitability of an MLM.
As Dr. Taylor goes on to point out, since nearly all MLM participants lose money, it is not difficult to come up with a list of income opportunities that are likely to be a lot more profitable that MLM. He gives some suggestions:
* Sell pencils on a street corner
* Babysit.
* Tend or walk the neighbor’s dog
* Mow lawns
* Deliver newspapers
* Use a metal detector to find coins in vacant lots
* Search garbage for aluminum cans to sell for recycling
* Sit on the sidewalk and beg.
* Gamble in Las Vegas – or wage a $20 bet with typical MLM participants that none of their immediate upline showed a profit on their taxes last year from their MLM program. (Your odds of winning are at least 100 to one.)
Disturbing revelations from MLM tax returns:
Tax professionals know who is making the money in MLM/network marketing and it's not the new recruits that are buying up products and sales tools to "play the game." See: "Survey of Tax Preparers".
(Or you can get a 12 page report in PDF format by clicking here.)
Conclusions from this survey are strengthened by household surveys on MLM participation. As further support of these findings, a much earlier investigation by the State of Wisconsin documented evidence, from tax returns, that Wisconsin Amway Direct Distributors (the top 1%) had annual net incomes of minus $900.
Gambling Beats MLM!
Where data was available, the rate of success for recruiting MLM's is abysmal. In fact, MLM makes gambling in Las Vegas look like a safe bet in comparison. Even clearly illegal no-product pyramid schemes do far better. Read "Some Shocking Statistics" to compare the likelihood of realizing a profit from twelve MLM programs, as compared with gambling and with no-product pyramid schemes. You will also get some great pointers on how you can do your own calculations of likely profitability of an MLM.
As Dr. Taylor goes on to point out, since nearly all MLM participants lose money, it is not difficult to come up with a list of income opportunities that are likely to be a lot more profitable that MLM. He gives some suggestions:
* Sell pencils on a street corner
* Babysit.
* Tend or walk the neighbor’s dog
* Mow lawns
* Deliver newspapers
* Use a metal detector to find coins in vacant lots
* Search garbage for aluminum cans to sell for recycling
* Sit on the sidewalk and beg.
* Gamble in Las Vegas – or wage a $20 bet with typical MLM participants that none of their immediate upline showed a profit on their taxes last year from their MLM program. (Your odds of winning are at least 100 to one.)