Navigating through Poverty and the Allure of MLM Schemes

Growing up poor is rather difficult. As a child, I didn’t think about the concept of being poor or rich, and I didn’t care. It was just my life. Stress surrounded me like a stifling fog, the still air filling my lungs with its poison. I don’t remember many vacations, food scarce, and the cars were old, always breaking down. My parents decided that it was okay to share their money problems and stress us children. When I was about seven years old, I remember my father telling me his income for the week and how much rent was for our home. He handed me his adult burden. Anxiety over the future was the undercurrent within our family dynamic. 

My father is a Vietnam veteran who was honorably discharged after doing two tours of duty. He came home suffering from post-traumatic stress disorder from experiences on the battlefield. During his first tour, he was incarcerated for an altercation with his commanding officer and deemed unfit for battle, he was not sent home, but back to the war zone. Shell-shock was the term back then, not PTSD, and he went undiagnosed for a long time. But it wasn’t just him suffering, his family suffered as well. We were in his line of fire. 

He met my mother soon after he was discharged. He had a job working for one of the railroads as a manual laborer. My mother was twenty years old and had  no career goals. They  married after the met and exactly one year later, on their first anniversary, they had me. Now she was a stay-at-home mom. Then in another nineteen months my brother was born. Occasionally, she would work part-time with my grandmother as a babysitter. My family was working poor. And then my dad had an accident at work. A ditch he was digging caved in on him, resulting in a broken clavicle. He was unable to work for a while and lost his union job. My memory is him wearing his brace and yelling over the phone at someone.  Then he would complain about the conversations he had with the union rep and others. We slipped farther down the financial bracket.

Soon my father got involved with Amway and my mother with Ava Care. My father could no longer say the word “job”, he literally had to spell it out,  “J-O-B”. Those higher up in the company turned the word job into a four-letter word. Ava Care for my mom was different because of their Aloe Vera juice. There juice was special. It was nothing like the ones at the stores. She turned a whole room of our house into an Ava Care office, lined with shelves filled with various products. They even had their own line of makeup. It was very similar to Melaleuca. We had to rely on government handouts and my grandparents for financial support. Both of my grandparents worked. My grandfather was a finish-work carpenter, making built-in cabinets for new, expensive homes, and my grandmother worked full-time as a manager in a deli. They were not rich but they were now working to support two families. I can only imagine how difficult that was for them, having to work to support their daughter and son-in-law. It was a very difficult financial situation. They loved their daughter and grandkids, and they also didn’t want us to go hungry. So they continued to work, giving us what they could without complaint.

Only a very few people succeed at multi-level marketing. My parents soon quit. “We were just not pushy enough,” my mom said.  There are a lot of shame with quitting a multi-level marketing company. “You didn’t work hard enough”. “You didn’t sacrifice enough”. “You didn’t talk to enough people”. It’s all your fault. Really, you can literally sacrifice everything for the company and still fail because for the top one percent to succeed, the ninety-nine percent beneath them must fail. It gets too expensive and exhausting to maintain the needed momentum. When you stop buying, the people above you sees the effect on their paychecks. So they turn on you. They label it as a failure, but it isn’t your fault. 

Multi-level marketing companies continue to operate because of the Amway precedent. In 1959, Rich DeVos and Jay Van Andel started Amway. The company grew through the 1960s, but eventually there was trouble. The lawsuit stated that the company was operating as a pyramid scheme. (Taylor) In 1979, the judge Robert Pitofsky, acting for the FTC ruled in favor of Amway and determined that it wasn’t a pyramid scheme with the contingency that Amway complied to “retail rules”, selling their products to customers and not stockpiling them*(cite). A rule with this contingency that has never been enforced. Now the distinction between direct selling and pyramid schemes became blurred. Amway has always focused on recruitment and “tool” buying and the distributors kept stock-piling products to stay active. The tools were inspirational books and videos. It was a money making idea from the top of the pyramid. These tools are how they are actually making their money. Not selling the product, and not even through recruitment. Nothing has changed. Some join are well-intentioned, wanting to focus on selling the product but the team meetings are never about product knowledge but recruiting. They flood their recruits with toxic positivity and love-bombing.

I don’t remember large portions of my childhood. Nothing felt real but I also have some very vivid emotional memories of fear, loneliness, and survival. Even today, when I hear people arguing I start to shake and cry. My grandmother told me she could always tell by looking at me, shaking in my baby seat, that my parents had argued earlier. 

My father had no steady jobs after the railroad. My mother counted 35 different jobs, not always in sales, each only lasting for short periods of time. He still dreamed of making it big one day. The biggest issue was his personality, for he either talked too much or his bosses got tired of him. With post-traumatic stress disorder, it takes what you are before trauma and then amplifies it. If you’re  a broken person before, whether through abuse or neglect like my father, after severe trauma, you become emotionally shattered. He can appear “normal”, it is when you spend time with him you soon realize he is far from it. Often, we told others about the difficulties we had at home, but people never believed us. According to his therapist, he has the characteristics of a narcissistic sociopath. This caused us to be continually dependent on government assistance and my grandparents. We were evicted from the rental home, so for an entire summer we moved in with my grandparents. Within three months, my mom found a house for sale she wanted and her parents bought it for her. Despite our mortgage being only Five hundred dollars for a little house in Modesto, California in the 1990s, my grandparents still had to pay it. Meanwhile my dad, in between his myriad of jobs, sat on his bed either watching golf or was playing golf with his friends, who would buy him meals while we were at home hungry. Off and on, he would remind us about his railroad retirement and it will be starting soon then everything would be good. We waited.  

Eventually, my mother became aware of what his friends were saying about him and his family. “Oh, poor Frank having to deal with that family of his.” Frustratingly, it seemed that everyone was on his side. We told one story and he told another. All about how we don’t support him and he was believed, not us. Now, thankfully it is no longer the case.

Despite what some believe, living on government handouts is not easy. At the beginning of the month, my mother would get our allotted food stamps, go food shopping and my brother would eat it all by the end of the week. All I had to eat was tortillas with butter or toast with strawberry jam. I have two sisters who were born after my brother. My younger sister ran away around fourteen years old to escape and my baby sister ate cat food. This period of time is a blur. The stress caused me to detach from everything, living in a bad dream. Now it makes me angry and guilty because I couldn’t help my siblings. It is so hard being poor as a child, especially when you are blamed.

Multi-level marketing companies lure people in, especially the financially vulnerable.. They can be down to the last hundred dollars and encourage them to take it to start their own “business”. “Let’s invest in success. Come with me and we can be successful together.” They know all the ways to manipulate. Nothing has changed, the companies just reuse old jargon to the ignorant  and has evolved with today’s world of social media. They meet a new generation of people who have come into the world and lack the knowledge and understanding of multi-level marketing companies. 

There is a cult-like devotion to the mult-level company too, and they will staunchly defend it when confronted by those in the anti-MLM community. “Pyramid schemes are illegal so the company wouldn’t exist if it was a pyramid scheme.” Or if you are critical of the company or multi-level marketing companies generally you are called a “haters” or a reply like “They are just jealous because they couldn’t succeed and they want your success.” Personally, I hate fraud. The majority of those who join don’t realize that they are being scammed and, in turn, have become the  scammer. But there is so much information available now. An anti-MLM community has developed, led by those who were part of the industry, that exposes the dark reality of multi-level marketing company scams, all in the effort to spread awareness for those inside and education to everyone. Everyone needs to know the truth about multi-level marketing. They also need to know that when they quit, it is okay. They are not failures.

My grandparents had a different work ethic compared to my father. They were Germans immigrants who lived in Germany during World War II. During the war, my grandmother worked in a large office, as an intern, learning office management. My grandfather was at a university, studying to become an architect. At the end of the war, the Russians invaded from the East. My grandmother was captured by the Russians, being sent to Siberia for nine months. She almost didn’t make it out alive, surviving typhoid fever, freezing temperatures, and starvation. When she was released, weighing only seventy pounds, she made her way back to Germany and found her family. My grandfather was in a POW camp for his role in the German Red Cross. When he was released, he went into business with his family in carpentry.

It is interesting how the trauma of war affects people in different ways. My father was unable to function but it made my grandmother stronger. While my father stared blankly at the TV screen, my grandmother walked to work every day for minimum wage to support two families. They were both mentally scarred from watching people die all around them, but they dealt with their past in different ways. 

Like most people, I didn’t understand anything about multi-level marketing until a documentary came out on Hulu called “LuLa Rich”. It is all about the rise and fall of LuLaRoe, the MLM clothing company. This documentary had a profound effect on me and sent me down a rabbit hole of what is now dubbed anti-MLM content on YouTube. The majority of the content is produced by those who were in multi-level marketing companies who now saw the companies for what they are – pyramid schemes and scams. These content creators, who were once at the top of the pyramid, began to realize it was an illusion when they did their taxes.They are now spreading the word about those realities and exposing the lies using their own evidence. They reveal the tactics they use to manipulate, including the promise of a six-figure income for everyone who works hard enough and the belief that failure comes when you don’t work hard enough. Those high up in the pyramid encourage young mothers to sacrifice their time with their families, telling them it will be worth it for their future. Emotional manipulation, gas lighting, and toxic positivity is common. The company’s income statements reveal the reality though. Usually they are very confusing and when you study one it indicates that over 90% of people in the organization only make between $0-$100 annually. The income statement doesn’t include the required monthly purchase requirements. Imagine working so hard at a job, spending all your time, effort, and money, still resulting in no income for the year. There is content that includes interviews with those very high up in the organization who made no money but found themselves with thousands of dollars of product which they couldn’t sell, losing everything, going bankrupt and sometimes found themselves homeless because it all crumbled around them, all because of gambling their lives on the promises of multi-level marketing. It is eye-opening. Now I get sick remembering how my dad would spell out the word “J.O.B” like it was a dirty word. If my dad would have traded his time for money, maybe I wouldn’t have gone hungry.

My husband and I remained poor like our families before us, trying to raise children. Sometimes destitute and homeless, dependent on family. (Scaramella, Neppl) Personally, I chose not to discuss finances with my kids because I didn’t want them to have that burden like I did growing up. I loved them too much and I put myself in their shoes, a little girl whose parents struggled financially. I wanted them to be happy. My husband had to work, I insisted on it, and unlike both of our fathers, he tried to support his family despite his own mental issues and I tried to help financially as I could by working part-time. I had learned a trade, which I hated but endured for my children. It was difficult to find childcare that is affordable for four children, so we relied on family. Occasionally, we found ourselves on welfare and living with family because we couldn’t afford rent. Several of my friends were in multi-level marketing companies and I tried a couple but only lasted a month. Like my mother, I just can’t push people into joining my team. I failed at being successful. 

If you are born into a poor family you will likely stay poor. A 2009 study from Columbia University concluded that children growing up in poverty were not just more likely to remain in poverty but the likelihood of remaining poor through adulthood with the number of years remaining in poverty (Wagmiller, Adelman). 

Our families are not rich people. Some were never destitute like us. I was the first one to go to college and get a degree. But even getting a degree didn’t help much because I lack the connections to get into the field I studied. I am under-employed like many with a college degree. That’s the world we live in. 

More than likely I will continue being poor, but getting rich quick is not something I believe in. I prefer to work hard for what I have for my own peace of mind. I know the promises in MLMs are lies and half-truths, and it has nothing to do with a person’s mindset, and it means failure for most people. Even today I will see my friends posts about their multi-level marketing business on social media as they struggle to “grow their business”, they don’t believe me. Cognitive dissonance. They still believe in themselves, that if they try hard enough they will be the one who succeeds. All I can do is share what I know and let them live their lives. And despite the trauma from the past, I persevere working and providing for my family the best way I can, in the most honest of work – the J.O.B. – with a few benefits, like eating and having a roof over my head. As I work hard for the little successes in life, they are sweet because they are earned through blood, sweat, and many, many tears.

___________________________________________________Taylor, Jon M.; The Case for (and Against) Multi-Level Marketing; Federal Trade Commision, Consumer Awareness Institute;

Scaramella, Laura V and Neppl, Tricia K.: Consequences of Socioeconomic Disadvantages across Three Generations: Parenting Behavior and Child Externalizing Problems; 2009, October 1,;

Wagmiller, Robert Lee and Adelman, Robert M.; Childhood and Intergenerational Poverty: The Long-Term Consequences of Growing up Poor; 1 November 2009;

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