Are multi-level marketing businesses good investments?
Question:
First of all, I just want to say how I have really enjoyed reading some of the blog posts.
My boyfriend is going through a tough decision, and I have a bad feeling about it, but I wanted to follow up with the Scripture to make sure that his decision will not be steering away from the written word. His parents are involved in a pyramid scheme type business and they really want him to join so it helps them out. I am very concerned because I don't want him joining and getting manipulated or brainwashed, but he feels the need to help them. Are there any passages that talk about these types of jobs or situations?
Thank you so much for your help!
Answer:
There are a few legitimate multi-level marketing businesses, but there are a lot of money losers as well. The legitimate ones have an actual product to sell and can sustain themselves on selling the product alone. The bad businesses only are able to make money by getting other people to sign up to sell the product. The worse examples are labeled "pyramid schemes" because there is a fixed number of people in the world, so only the few who start the business make any money and it is impossible for those who come later to make money because they won't find anyone to sign up.
To avoid being labeled a pyramid scheme, a number of businesses use a blend of having an actual product and signing up salespeople. If you are interested in such a business, the question you should ask is can you make a decent wage just selling the product. In the vast majority of the cases, the answer to that question is "no."
What is the appeal to such businesses? The product is almost always secondary. The emphasis is on who much money you can make in a short amount of time signing up people. That is when Solomon's advice should come to mind: "He who is greedy for gain troubles his own house, but he who hates bribes will live" (Proverbs 15:27).
Most poor businesses emphasize making decisions quickly. That is because you won't take time to see if it is a good deal or not. "The plans of the diligent lead surely to plenty, but those of everyone who is hasty, surely to poverty" (Proverbs 21:5). If something is only a good deal for a short time, then it wasn't a good deal in the first place. Sure, being careful might cause you to miss a few really good bargains, but in the long run, you'll do better because you didn't invest in so many bad schemes.
Notice that his parents are having a hard time making their business work already. If it was viable, they might ask their son to help in the work, but they are saying that they need his investment just to make money. In other words, whatever they are selling doesn't make this a profitable business. They can only make some money if others sign up, so they are wanting their son to sign up to make some money off of him. The fact he will have an even worse time making money from his investment isn't considered. This isn't a sustainable business model and so would be a foolish investment.
Think of it this way: how is helping his parents lose money helping them?
