A little diversion if I can and try to draw on the wisdom of the brains trust to help with a personal matter.
I have a sister currently caught up in a network marketing scheme.
The product, a marketing course, is about as valuable as selling pet rocks, so it might even be purely an illegal pyramid scheme, but let's say network marketing for the moment. Either way, it's the usual story, it comes out of the US, you sell to family and friends and get a position in a hierachy at different levels depending on your success at selling and in this case by buying into the scheme. .
She is a single mother with no career background and small capital left from a divorce, seeing an opportunity for all her hopes and dreams to come true as well as giving her purpose and social validation and is completely caught up in it, on the phone 10hrs a day making calls trying to shift their product. Has invested $36,000 to date to buy her way into a particular level, although has made $25,000 in sales in return. But they are pushing her to buy into higher levels quickly before missing out (fomo) and she is selling off jewelery and everything she has to get up in the hierachy and make her riches. (She doesn't own a home and lives with her father). (I suspect the scheme might work by the promoters always keep you investing more into the scheme than the revenue you get, so they keep ratcheting you to higher levels depending on your success at selling and capacity to pay, but they're always keeping you putting all revenue and more into buying into higher levels.
I've seen in the past discussions on this issue and family interventions and the like on HC, but I'm not sure that's effective. Different family members have rung me to see if I can help given I have a bit of a business background.
I can see a lot of paralells to newbie spec stock investors, like all those people on NOR and a thousand other rubbish stocks punting all their hopes and dreams on the bullshit of stock promoters and then pouring their hearts out after being down tens and hundreds of thousands of dollars. Yet they wont be told at the time. Alternatively, it is possible if you are a brains trust member to make money from spec stocks, and big money too.
So that got me thinking. Is it possible to make money from a network marketing scheme and does anybody know the game?, (assuming you're not an original promoter). Just as for spec stocks and leveraged traders, maybe 90% lose, 5% do ok, and a few % make yuge gains if you know some rules and play the right strategies.
Rather than fight her and push agsinst her passion, Im thinking I might be able to become a business mentor and work with her once a week on strategies to try and make this work for her and or least minimise losses.
So for example in spec stocks I want 3 to 5 times expectation on my capital before I invest. So I might advise she should freeze at her $36k investment until she returns $90k and then takes her initial capital out before investing profits further. Also, a trader should have a reserve to recover from if things go bad, so instead of selling her Rolex watch, thats her reserve. Also get in early and get out early whilst the getting out is good. Just like spec stocks.
Working with her like this might help put some boudaries around this and gradually get her to take a business like approach that salvages her pride and caps losses.
I should say she is an excellent sales person, lots of friends and contacts through her gym and other activities including in a couple of cities. If it is possible to get a return on her money through the scheme, she could do it with the right direction and advice.
Has anyone dealt with this issue. Is it possible for her to get a return through her efforts in network marketing and what are the smart strategies I can guide her with, other than making her feel foolish and damage the family relationships.
Any thoughts and advice appreciated. Hoping the BT can help.
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