Thread: MLM vs. COLLEGE

I don't know this guy, but he has some good videos on subjects folks who visit REALSCAM.COM might find interesting. For all I know he may post here, I do know his work has been mentioned in the past.

Ethan Vanderbuilt - YouTube
Ethan Vanderbuilt | One Voice Can Change The World

I stumbled on this:



For me it is not even a question go to college, or get a good technical skill. Either will let you start your own business, and both will give options to fall back on if things go sideways. If you go MLM and it doesn't work, you may or may not have a viable fall back. Unless your family is rich, go to community college and a state school, keep your debt low and grades high. (My 2 Cents)

Here is what I find the most troubling about this conversation and maybe perhaps MLM in general. Guy shows up with the rah rah stuff, fine that is to be expected. But then he starts throwing around the LIES about having your own business being some tax promised land. Ala, Robert Kiyosaki best debunked here: John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad

There are clearly some advantages to having your own business like being able massively fund certain retirement plans, but you need INCOME to do that. For the most part standard stuff as outlined by the IRS is deductible, like "Cost of Goods Sold". As a practical matter, I know people play games with it, but most are not so clumsy as to put it in writing on the internet.

MLM guys tax scenario isn't even up for discussion, it is flat out wrong. Took a 5 second google search to find the IRS guidelines on how to treat business expenses. MLM guy claims to have a degree in Accounting and to have worked for a CPA firm for 3 years. Notice he did not say he was a CPA!!! Assuming he has an "international MLM business" just who is he giving advice to? All those kids that skipped college and bought Choose to be Rich? Keeping in mind this is mainstream MLM advice that has sold millions of books. Think about this if you are making a decision, does a roofer need to know code, a pharmacist drug interactions? If you are reading this and truly trying to make a life decision, go back and independently verify what you are being told.

Cheating on your taxes is like a lot of things, if you are dead broke to begin with your chances of an audit are smallish. As Ethan points most MLM experiences end with losses or very little income. But, if you build a successful business and pulled this crap along the way, huge audit risk.




2.JPG
3.JPG
4.JPG
5.JPG
1.JPG


Deducting Business Expenses

Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
What Can I Deduct?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

It is important to separate business expenses from the following expenses:

The expenses used to figure the cost of goods sold,
Capital Expenses, and
Personal Expenses.

Cost of Goods Sold

If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.

The following are types of expenses that go into figuring the cost of goods sold.

The cost of products or raw materials, including freight
Storage
Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
Factory overhead

Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.

This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.

For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.
Capital Expenses

You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.

Business start-up cost (See the note below)
Business assets
Improvements

Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.
Personal versus Business Expenses

Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.

For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.
Business Use of Your Home

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.
Business Use of Your Car

If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
Other Types of Business Expenses

Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.

This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
Page Last Reviewed or Updated: 2013-09-11

Deducting Business Expenses

Ha, I like that the one guy is named Joseph Weil - looks like that was intentional.

Yellow Kid Weil: Autobiography of the greatest con man in American history - Boing Boing

Originally Posted by ribshaw;60896
Here is what I find the most troubling about this conversation and maybe perhaps MLM in general. Guy shows up with the rah rah stuff, fine that is to be expected. But then he starts throwing around the LIES about having your own business being some tax promised land. Ala, Robert Kiyosaki best debunked here: [url=http://www.johntreed.com/Kiyosaki.html

John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad[/url]

These folks should get the slammer for giving that kind of advice. Sadly, some young people fall for it.

Bill gates dropped out of college and is now one of the richest people on earth currently.

Imagine with his business skills, what type of MLM he could make.

Just putting that out there.

Originally Posted by Fendaril

Bill gates dropped out of college and is now one of the richest people on earth currently.

Imagine with his business skills, what type of MLM he could make.

Just putting that out there.

And there's one Bill Gates in the world. What about the tens of millions working menials jobs or living on skid row and food stamps who dropped out of school?

Just putting that out there.

Originally Posted by Luzer

These folks should get the slammer for giving that kind of advice. Sadly, some young people fall for it.

Too bad he has not really kept up with the page, but a lot of these hucksters ended up tipping their hand at the truth. Best-selling real estate authors: where are they now? by John T. Reed

1.jpg
2.jpg

And Kiyosaki may end up blowing it just yet, but if you are going to stick someone for $24 mil, this is how you do it.

Robert Kiyosaki, author of the bestselling "Rich Dad, Poor Dad" series, has filed for Chapter 7 bankruptcy protection after losing a nearly $24 million court judgment to The Learning Annex, The New York Post reports.

As one of Kiyosaki's earliest backers, The Learning Annex was responsible for arranging the speaking engagements and platform that led to his massive success.

But apparently the fame went to his head because according to court papers obtained by the Post, Kiyosaki, who published his first "Rich Dad" book in 1994, never paid the Annex its rightful share. Said founder and chairman Bill Zanker: "Oprah believed in him, and Will Smith believed in him, but he didn't keep his promise to us."

Kiyosaki's Rich Global company was ordered by a U.S. judge in April to cough up $23,687,957.21, which in turn led him to file for corporate bankruptcy on Aug. 20.

Despite the blow to the personal finance guru's reputation, Kiyosaki probably won't feel the pinch in his wallet. Forbes pegs his net worth around a cool $80 million, and Kiyosaki, who's written 11 books, operates as many as ten other companies. Rich Global was said to be worth a few million when it went under.

"Rich Dad, Poor Dad" became an overnight sensation when Kiyosaki made the rounds on feel-good daytime TV like "Oprah" and aired his speaking programs on PBS. Cash-strapped consumers identified with his inspirational story of learning how to manage money from one father who struck it big and another who died penniless and alone.

Of course, not everyone bought into the schtick. As Helaine Olen's wrote in Forbes Thursday, the guru's "tips ran the gamut from ridiculous to illegal and downright hurtful and included advocating for insider trading, arguing for the purchase of multiple real estate properties with little or no money down and telling followers they could purchase stocks on margin via unfunded brokerage accounts."

Read more: 'Rich Dad, Poor Dad' Author Filed Bankruptcy - Business Insider

Originally Posted by Fendaril

Bill gates dropped out of college and is now one of the richest people on earth currently.

Imagine with his business skills, what type of MLM he could make.

Just putting that out there.

One thing that makes a business solid is a barrier to entry. I would in some senses argue that Gates is his own barrier to entry just because of his brilliance. Keeping in mind, IBM had no vision as to what they were giving up in letting Gates retain some rights to MS-DOS.

If you are in a commodity type business which MLM is, I believe a high degree of selling skill is that barrier to entry. If someone can sell, really sell, they will likely be able to achieve a massive income college or no. Even there, my suspicion is that most of the top salespeople with 7 figure incomes have some type of degree.

One of the criticisms of Kiyosaki has been that he sometimes gives questionable or dangerous advice. Skipping college or insider trading would be examples. Then if you do as he advises and fail, the response will be that nobody forced you to skip college, etc.

At least he didn't throw about the "Harvard Business School teaches MLM" bull****.

A MLM Skeptic: MLM Mythbusting: Did Harvard Business School Really Develop 3 Criteria of Successful MLM Companies? (No, they did not!)

The antidote to that stupid video is my article:

9 Things They Don't Tell You About Multi-Level Marketing / Network Marketing

Originally Posted by ribshaw

One thing that makes a business solid is a barrier to entry. I would in some senses argue that Gates is his own barrier to entry just because of his brilliance. Keeping in mind, IBM had no vision as to what they were giving up in letting Gates retain some rights to MS-DOS.

There's also the 10000 hour rule. From what I read, Gates was on one of those super-rich high schools that had a computer and he learned programming before some colleges got computers. So by the time he founded Microsoft he'd mastered the stuff already.

If you are in a commodity type business which MLM is, I believe a high degree of selling skill is that barrier to entry. If someone can sell, really sell, they will likely be able to achieve a massive income college or no. Even there, my suspicion is that most of the top salespeople with 7 figure incomes have some type of degree.

According to a professor at HBS, his estimate says 70% of top salespeople have some sort of innate talent for sales. The other 30% are "made" (they learned how and through hard work)

Are Top Salespeople Born or Made? - Steve W. Martin - Harvard Business Review

Originally Posted by Luzer

One of the criticisms of Kiyosaki has been that he sometimes gives questionable or dangerous advice. Skipping college or insider trading would be examples. Then if you do as he advises and fail, the response will be that nobody forced you to skip college, etc.

Kiyosaki stole the idea from Sir Ken Robinson, through misinterpreting the message.

Ken Robinson: How schools kill creativity | Video on TED.com

Sir Ken Robinson was talking about how schools are still in industrial era, teaching the most basic skills to supply the labor force for the machines. We have moved on from that world, so why haven't our education have moved on as well? But Robinson never talked about skipping school or such.

This was a good article over on the droid » Confesstimonial :: Collateral Damage from someone who was involved with a lady in MLM for 8 years. Does not read as if it ended very well, for her or the relationship. I am always left wondering if the 997 out of 1000 would be better off financially and emotionally if they had just plowed this time and effort into a second JOB, or some bankable training and put the additional money in some sensible investments???

This book tells a similar tale and this guy was higher up the pyramid than most and still was not making it financially. Merchants of Deception: An Insider's Chilling Look at the Worldwide, Multi Billion dollar Conspiracy of lies that is Amway and its Motivational Organizations: Eric Scheibeler: 9781439247150: Amazon.com: Books

Sort of a pro side article, but not really. The income disclosure really calls the tune for MOST. I am decidedly pro money, and pro education as well. For the dream of making a six figure income, versus the payday that bartenders, servers, or pizza delivery can bank.

About 75 percent of Vemma’s “active brand partners” make under $1,327 per year, according to the company’s 2012 Income Disclosure Policy of US Brand Partners.


School is back in session and dorm room refrigerators are once again stocked with energy drink favorites like Red Bull and Monster.

But in recent years, a third brand, Verve, is trying to elbow its way into student life.

The brainchild of Benson K. Boreyko, the founder and CEO of Vemma, a nine-year old multilevel marketing company, Verve is two years into a marketing plan that focuses on young people selling the caffeine-rich drinks.

While Vemma is far from the first company in the $30 billion direct-selling industry to enlist college students to hawk their product, its marketing strategy of trashing college as a pathway to success may be.

Boreyko also uses fancy cars like BMWs and Mercedes to lure students. He has top salesmen arrive at recruitment meetings in the flashy wheels and the message is clear: in just a short period of time, you, too, can be driving this car.

“College doesn’t guarantee anything but students loans,” 23-year-old Alex Morton, one of two salesmen who launched the college drive about two years ago, told a Las Vegas recruiting session last spring.

“You can be driving a new BMW within 90 days,” Boreyko boasts in a YouTube video. Vemma gives its top distributors, which it calls brand partners,” a bonus of $400 towards a monthly payment on BMW, Mercedes or a mini-Cooper.

Boreyko told The Post the college-focused marketing campaign amounts a young people’s revolution of those unhappy with this “crappy economy” who are willing to try a new approach to making a living.

He declined to give the total number of participants, but said 745 people have earned the car bonus.

Vemma’s success also has sharpened the focus of consumer groups on its practices. Some, noting the heavy emphasis on recruitment, have called Vemma a pyramid scheme.

Boreyko, not surprisingly, disagrees. “Don’t call us a frickin’ pyramid scheme because we’re not,” said Boreyko, who said the controversy over Herbalife has fueled the critics of companies such as his.

To be sure, the odds of getting a car are long. About 75 percent of Vemma’s “active brand partners” make under $1,327 per year, according to the company’s 2012 Income Disclosure Policy of US Brand Partners.

“I couldn’t afford the $150 every five weeks,” said Eric Muldoon, a 21-year-old senior at SUNY Oswego. Muldoon said he lost $500 in the four months he tried Vemma. Part of the problem was a complicated formula that forced him to recruit in a new geographic area to qualify for commissions, he said.

A student at Arizona State University even wrote a column in the school paper warning against Vemma. “Gullible people continue to invest and lose money to this company,” wrote Morgan Chan.

James Tomasullo, a 20-year-old sophomore at The College of New Jersey, said he left after losing $1,000 in a few months because “the incentive is to recruit rather than get end user customers. Veema was clearly doing that.” The Federal Trade Commission has said an emphasis on recruiting is a hallmark of a pyramid scheme.

A consumer group, truthinadvertising.org, criticized Vemma’s promotion of its affiliation with the NBA’s Phoenix Suns and TV health expert Dr. Mehmet Oz. Some young salesmen told The Post those two affiliations proves Vemma is on the up-and-up. But neither the team nor Oz endorse the company. Vemma donated money to an Oz charity, according to truthinadvertising.org, which said many consumers have complained to the FTC that Vemma is a pyramid scheme targeting high school and college students.

In addition, The Post has learned that MLM expert and pyramid critic Bill Keep, the dean of business at the College of New Jersey, recently sent out a note to other business deans around the country alerting them to the suspect marketing plan.

Verve energy drink turning college students into sales force | New York Post

=============================================

A MLM Skeptic: Alarms Raised at Colleges Over Pyramid Allegations of MLM Vemma

A student who resisted the siren call of MLM...

Zócalo Public Square :: Did I Participate in a Ponzi Scheme?

Originally Posted by kschang

A student who resisted the siren call of MLM...

Zócalo Public Square :: Did I Participate in a Ponzi Scheme?

I'd like someone to record these bozos advising someone to skip college to join MLM and then have them shut down.

This month's Rolling Stone for those of you that are stilling thinking about peddling fruit punch over getting a skill that will put cash in your bank account.

More than 97 percent of the people who sign up for Vemma never advance past the rank of Diamond, which means that 97 percent average less income than someone who works 40 hours a week at a minimum-wage job, without even accounting for expenses.

And in the smoke-and-mirrors world of multilevel-marketing incomes, "millionaire" means something different to everyone. "Some people say they're millionaires just because they've made seven figures over the course of their lifetimes," says one Vemma member who's critical of YPR's boasting. "They don't even take into account the fact that they spent that much or more. It's all bullshit."

MLM will tell you that you are "building your own business", yet they treat you like an employee when you decide to leave.

Last January, one of Herbalife's most notorious distributors encouraged 16,000 of his followers to come with him to Vemma, a switch Boreyko welcomed despite the fact that the distributor had been named in a class-action lawsuit alleging predatory sales practices that Herbalife, while admitting no fault, settled for $6 million.


Read more: Selling the Bro Dream: Are Frat Boys Peddling Vemma Suckers? | Rolling Stone
Follow us: @rollingstone on Twitter | RollingStone on Facebook

They are treated just like employees the whole time. No one tells me what I can and can't do in my real business. I purchase items for resale and keep ALL the profit - which is far more than some piddly commission from a fly by night 'company'.

Originally Posted by Whip

They are treated just like employees the whole time. No one tells me what I can and can't do in my real business. I purchase items for resale and keep ALL the profit - which is far more than some piddly commission from a fly by night 'company'.

This is true. I would characterize MLM "independent contractors" as a combination of a customer, an employee without benefits, and a franchisee without territory protection.

Originally Posted by ribshaw

This is true. I would characterize MLM "independent contractors" as a combination of a customer, an employee without benefits, and a franchisee without territory protection.

There is an all-encompassing word that covers them..."victims"!!!

Thank you very much for sharing my video. Vemma has been ruthless in going after college students. For a long time they were trying to get kids to drop out of school. This video was a direct response to their actions.

Originally Posted by EthanVanderbuilt

Thank you very much for sharing my video. Vemma has been ruthless in going after college students. For a long time they were trying to get kids to drop out of school. This video was a direct response to their actions.

Thank you for doing the work to get the videos up.

MLM has long been a scourge on the poor and middle class, the anti-education movement is but one more great reason to let people know what MLM is really all about.