Are People Losing Money in LIFE?

Classic economic theory, based as it is on an inadequate theory of human motivation, could be revolutionized by accepting the reality of higher human needs, including the impulse to self actualization and the love for the highest values.

Abraham Maslow

In AmProp’s recent analysis of the LIFE Income Disclosure Statement, they made the (faulty) accusation that “potentially 97% of all of LIFE may be losing money each month, based on $500 in monthly business expenses”.

Let’s look at the truth of this.

Monthly Expenses

They say that “it’s easy to envision $500 in annualized monthly TEAM/LIFE expenses, i.e., meeting and conference tickets, gas, hotels, food, tools and products.”  I agree, it’s easy to envision that.  But is it really fair to call all of that “business expenses”?  IRS technicalities aside, the fact of the matter is, people are receiving something of benefit from participation in LIFE, even if they don’t ever make a penny.

AmProp says that only 3% are netting a positive gain, and 40% are dropping out after a year.  That means that 57% are staying in on the basis of…what?  Hope?  Come on.  Either a) that 3% number is way off (possible), or b) people are staying in LIFE because the value they’re receiving from the community, training materials, mentorship, etc., exceeds the price they’re paying for it. Or most likely, a little bit of both.

Back to value, though…let’s use a simple analogy.  Let’s say you agree to do some work for a local restaurant, and you’ll take your pay in barter — credit at the restaurant.  You only do a couple of hours work, so you’ve got a $100 food credit, but you go eat there 3 times in the month and spend $120.  Does that mean you’re losing money on the deal?  Of course not — because you’re receiving value in excess of what you paid.

Same goes for LIFE.  The product is personal development training, and there are tens of thousands of people who feel that the value LIFE brings to their lives exceeds what they’re paying for it.  And some of them want to share that with others, and be compensated for it in the process.

I’ll say this — if you don’t think LIFE is worth the cost, purely on its own merits, even without the business opportunity, don’t join.  If you think it’s over-priced, you shouldn’t buy it, and you shouldn’t sell it.  That’s one of the very core problems Amway had, and what got them in trouble with the FTC.

So if you’re making money in LIFE, you’re making money.  If you’re spending money too, great, but you have to think of that as a separate transaction, evaluated on its own merits.

You Get Out of It What You Put Into It

LIFE isn’t for everybody. Direct selling isn’t for everybody. Yes, a lot of people don’t succeed at it.  A lot of people don’t succeed at entrepreneurship, college, or going to the gym, either. That’s not a valid indictment of the model — simply the truth that it is a meritocracy, and those who work harder, smarter and longer will reap the greater rewards.

And I won’t deny that the people at the top make a lot more money than the people who are just starting out, or who aren’t really working the opportunity. The numbers are the numbers.

The key difference is that in a corporation, there will only ever be one CEO, one President, one Chairman.  In LIFE, anyone can eventually qualify as a Life Coach. Anyone can qualify as a Leader, Coordinator or Senior Coordinator. There’s no prerequisite — simply your demonstrated ability to get results.

LIFE Compensation Plan

I’m not going to run through the math and a point-by-point rebuttal of Amthrax’s IDS analysis — Claude Hamilton has already done that. In summary, LIFE pays back to its members about double what Amway does (about 70% of business value vs. 35%).

In the end, it’s really all about opportunity — what can you do — not what somebody else did or didn’t do. And the fact of the matter is, LIFE has one of the most generous compensation plans in direct selling, a low startup cost, a product that helps you in all aspects of your life, even if you don’t work the LIFE business opportunity, and a thriving, vibrant, supportive community, both online and in person. If that’s what you want to be a part of — great.  If you’re worried about whether this month or next month you’re going to break even to the penny, you’re asking the wrong question.


Share Your Thoughts

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s