Worst MLMs of 2025 Exposed! (they're not the ones you think!)

Summary

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Frugal Friends Podcast – "Worst MLMs of 2025 Exposed! (they’re not the ones you think!)"

Hosts: Jen Smith & Jill Sirianni
Date: December 2, 2025

Main Theme & Purpose

In this episode, Jen and Jill take a critical and humorous deep-dive into the lesser-discussed and more insidious multi-level marketing (MLM) schemes of 2025—specifically those in the financial services sector. Their goal: to expose hidden dangers, share real-world examples, and empower listeners to question business opportunities that may do more harm than good, all with an emphasis on protecting your finances and supporting true financial literacy.

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Key Discussion Points & Insights

1. Rethinking MLMs: Not Just Nail Polish and Supplements

• Common Perceptions: Most people think of MLMs as “awkward Facebook messages,” “overpriced nail stickers, shampoos, and supplements,” or infamous products like “obscenely bright leggings.” (Jen, 01:54)
• Beyond the Usual Suspects: The real issue often isn’t the products, but the commission-based recruitment structure that incentivizes endless recruiting rather than genuine product sales. These companies thrive by focusing on recruitment, which creates a fundamentally unsound financial dynamic. (Jen, 04:23–05:15)

Memorable Quote

“I can’t even be mad at an MLM for maybe hiking up the price a little bit to take business away from these multibillion-dollar corporations. Right. The thing that makes MLMs so unhealthy is the commission structure.”
—Jen (05:15)

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2. The False Promise and Real Risks of MLMs

• The Recruitment Trap: Most income is made not by selling products, but by recruiting others—a hallmark of a pyramid scheme. The majority at the bottom of the downline rarely make money.
• Conservative Reality: “For over 80% of the people who are going to actually be a part of the mlm...it's a conservative percentage.” (Jill, 09:28)
• Limited Markets: You’ll eventually “run out of people to sell to,” especially since many products are easily available elsewhere for less. (Jen, 09:25–09:57)

Notable Quote

“The products are just normal products. They’re not trying to revolutionize. … It’s literally just like, let’s create a network of people that just buy our products from this off brand versus the big companies.”
—Jen (11:17)

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3. The New Frontier: MLMs in Financial Services

Why focus on finance?

• Jen and Jill highlight that MLMs are not limited to consumer products—they have found fertile ground in complex, intimidating markets like investing and insurance, where most people lack confidence or expertise and are therefore ripe targets.

Disclaimer for Legal Reasons

• The hosts clarify: “Everything we’re sharing in this episode is opinion based. It’s grounded in only publicly available information and data…maybe you’ll see us be vague in some places and that’s on purpose.” (Jen, 12:27)

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A. Investment MLMs: "I Am Academy" & Beyond

• Example: I Am Academy (recently rebranded to Iovia and now insolvent, also previously known as IMarketsLive/IML/IMMA).
• Business Model: Sells online courses on speculative investments (crypto, forex, options) for $250 upfront + $250/month, but you can waive your monthly fee by recruiting two others.
• Tactics: Confusion, secrecy, targeting young, often minority communities lacking investing education.
• Scale: At its height, 500,000 members, $1B revenue (2022), and $1.2B allegedly scammed since 2018 (FTC, 2025)
• Legal Trouble: Fined for trading without a brokerage license; heavy FTC involvement as of 2025.

[22:10]

“It costs $250 upfront and then $250 a month. And so again, if you recruit two people in, then your monthly fee goes away…”
—Jen

[26:52]

“They’re targeting intentionally communities of color who do not have as much background in investing education. It was being very intentional with the communities that it targeted.”
—Jen

• What You Can Do: “We should be talking about what we know about investing because so many of the people that this company in particular targeted were very young…It takes all of us to be talking about this, to be normalizing this.” (Jen, 25:53–28:57)

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B. Insurance MLMs: Primerica, World Financial Group, Family First Life

• Common Scenario: A friend starts selling life insurance and asks you to buy—often with genuine intentions but little financial background.

  • “People don’t know a lot about insurance. It’s boring. It’s intentionally complex and it has the most grifters in the financial services industry.” —Jen, 29:29

• Product Reality: You do get the insurance, but often pay more for coverage you could get for half the price elsewhere. Commission structures further incentivize recruitment, not customer service.

  • Standard Brokers: Earn 80–90% commission.
  • MLM Agents: Start at ~25%, rising only if they recruit others.

[36:24]

“The issue isn’t that you’re not getting the real product…same here. You will get the insurance that they’re selling you. But … you may not get the right thing for you. It might not be the most suitable or affordable. And so much of what you’re paying is just extra…”
—Jill

• How to Protect Yourself
  • Always compare quotes from at least 20 different insurance companies; don’t rely on a friend’s recommendation without doing due diligence.
  • Ask how many companies your agent can quote from—less than 15–20 is a red flag.
  • Online tools like PolicyGenius or reputable brokers like Ladder, Fabric, and Ethos can help.

[41:18]

“You can ask [the agent] how many different insurance companies do they work with?…if they’ve only got 5, 10, 15, that’s not enough…”
—Jill

• Names to Note: Primerica, World Financial Group, and Family First Life—all operate with MLM models. Their agents are licensed but do not have a fiduciary duty or access to all products on the market.

[42:35]

“So the biggest one is Primerica … World Financial Group … and then Family First Life. … They don’t have a fiduciary duty…and they don’t have access to every product available. So it is wise to do your due diligence with any insurance agent, not just these…”
—Jen

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4. Red Flags & Warning Signs: The ‘Lightning Round’

Practical Advice for Avoiding MLM Pitfalls

• Classic Red Flags:
  • Secrecy around the business model/product.
  • Pressure to recruit your network rather than just sell something.
  • Emotional manipulation, especially leveraging existing community/religious bonds.
  • Promises that sound too good to be true (e.g. “You’re going to make millions for just enrolling a few friends!”).
  • Overlap with cult-like tactics—rituals, groupthink, “us vs. them” language.

[51:14] — Guest Story via Marco

“When I got home, I called him and I said, you know, I looked up this company and I wanted to share some of the things I heard about with you. … And what I was told back was, ‘You’re just like everyone else. You don’t believe in me. They told me you would say that’—and that was the end of my friendship with my best friend of four years and it was my introduction to the world of multi level marketing.”

• Faith & Manipulation:
  MLMs often mimic group identity and trust, especially in tight-knit communities and religious groups.

  • “If I see anything…tapping into religious norms…that for me, if I see like any overlap…” —Jen (54:47)
  • “When I start to hear your sales are connected to your level of faith—ding ding ding…” —Jill (54:47)

• General Guidance:
  If anything is overly mysterious, secretive, or pushes recruiting over value, walk away.

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Notable Quotes & Moments

• Jen on Commission Structures:
  “Where you put the money is where you put the incentive.” (05:15)
• Jill on the MLM Dream:
  “Most of our friends who are a part of mlms … they’re not malicious … not really realizing where the true money is coming from…” (08:13)
• Jen on Financial Education:
  “It is still our responsibility to get in there, educate ourselves and help the people…” (28:57)
• Jill on Insurance MLMs:
  “You may not get the right thing for you. It might not be the most suitable or affordable.” (36:24)
• Jen on Red Flags:
  “If I see anything tapping into religious norms…for me, that’s a red flag.” (54:47)

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Timestamps for Major Segments

• 01:54 – Defining MLMs: stereotypes and the real problem with recruitment
• 05:15–09:25 – Honest takes on MLM models vs. unethical practices
• 17:19–28:57 – Investment MLMs, I Am Academy/Iovia, how these companies operate, who they target
• 29:29–44:45 – Insurance MLMs, how complex products allow for hidden grifts, what to watch for, specific company names to know
• 49:33–56:00 – Lightning Round: Red flags and personal stories, cult parallels, religious manipulation
• 56:11–59:10 – Closing thoughts, pushing back on MLMs, the importance of support and community, book promo

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Engaging Takeaways

• MLMs aren’t just about Tupperware or leggings—they now lurk in financial and insurance products.
• If a business is built on endless recruitment, tread very carefully—especially where money, community, or faith are involved.
• Support your friends by helping them find legitimate, non-MLM opportunities—don’t let MLM structures pit friendship or trust against sound financial decision-making.
• Trust financial and insurance professionals with recognized, fiduciary designations—not ‘opportunity’ sellers who rely on recruitment.
• Speak openly about money and these schemes, especially with younger people and vulnerable communities, to prevent exploitation.

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For resources and further learning:

• Jen & Jill recommend searching for “anti-MLM” creators like Hannah Alonso and Alyssa Grenfell for deep dives.
• Key comparison tools: PolicyGenius (for insurance), various online brokers.

Final Reminder:
If it sounds too good to be true—and especially if you’re being pressured to recruit others—it probably is.

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Summary prepared for listeners seeking to safeguard their wallets and social circles from the most insidious MLMs in 2025.

Transcript

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The worst MLMs of 2025 exposed and they're not the ones you think.

[Podcast Intro Announcer]

Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity, and live a richer life. Here are your hosts, Jen and Jill.

[Jen]

What do you think when I say the words multi level marketing? Is it awkward Facebook messages from college friends? Is it overpriced nail stickers, shampoos and supplements? Or maybe it's the documentaries about obscenely bright leggings or sketchy smoothie shops.

[Jill]

It's super easy to go after MLMs for some of their very obvious flaws, but there is a more insidious side to some of these small businesses. And so today we're going to be pulling back that curtain and talking about some of the worst MLMs of 2025, which you may not even realize are MLMs.

[Jen]

If you are a pretty girl and not using your pretty privilege to make you literally millions of dollars, what are you doing? Hey, Frugal Friends, I'm Jen.

[Jill]

I'm Jill.

[Jen]

And if you're not using your pretty privilege to become a millionaire, literally, what are you doing? If we haven't told you that enough on this show, what have we even been talking about?

[Jill]

Has nothing to do with MLMs but just unhinged. And she thinks it's funny.

[Jen]

It is completely unhinged much like a lot of the MLM content that you might see online, whether it is in your algorithm on social media or maybe a little closer to home on your Facebook profile with your friends from high school or college or wherever. And so we are going to be talking about MLMs today and not just the ones that it's easy to maybe poke fun at, but or even identify. Yeah, yeah, we, we want to talk about those, but also the really insidious ones that as somebody who loves anti MLM content, I don't hear people talking about them much, partly because they are so litigious and they send cease and desist so often, they sue people so easily. And so we really want to dive into them today.

[Jill]

Why not?

[Jen]

We're getting spicy. You know, we're flush with cash, so we're going to tread lightly. But we are not going to mince words when we say there are things to be aware of. And they are things we have strong opinions on and we want to only use those opinions to help you protect yourself financially.

[Jill]

The ones that we are all most familiar with are primarily products. And so many of us have received these messages from friends and lot and acquaintances and just distant people or sometimes close friends. And I think that's what most of us recognize as MLMs. And this is a difficult one because we maybe ourselves have been a part of an MLM or have a friend who is, or we've been to one of these parties and we're kind of like, what's up with this? What's going on? Maybe I buy because I feel like I want to support the person and we kind of want to break that down a little bit. But that's not going to be the bulk of this episode because there are other MLMs that we really do need to be aware of. But we also want to equip you for the everyday encounters that we might be having.

[Jen]

Yeah, because ultimately. So if we're looking at multi level marketing as a business model, I actually hot take, don't have a problem with it as a business model. I think we've talked a lot about opening up our social circles to actually talk to people in real life versus just texting and DMing and network marketing actually forces you to do that. And so that I can't be against it is the fact that the products cost more for what hasn't been studied to be like comparisons between MLM products specifically and readily available ones. But you can see enough on YouTube and social media to make your own opinions on efficacy, but not A big difference in quality for the amount. And you know that they're charging more because they're paying commissions to people. In the 50s when we didn't have the Internet, when there were fewer cars, there was a higher barrier to entry to get to things. All the way up to like the 80s and 90s. Right. You have this model of selling where you're coming into people's homes and you're actually doing a service. And in the 50s to the 90s, a reasonable business option. But now we have the Internet and we have low cost things. And I can't even be mad at an MLM for maybe hiking up the price a little bit to take business away from these like multibillion dollar corporations. Right. The thing that makes MLMs so unhealthy is the commission structure. There are so many that offer a higher commission on product sales when you recruit or just incentivize recruiting in general. And where you put the money is where you put the incentive. And so you have people who then are not focusing on the product as much as they are focusing on recruiting people in or you're putting two jobs on one person that you are not paying. You're essentially saying sell this product because you have to or else this company is considered a pyramid scheme and recruit because otherwise you're not going to make enough commission because the affiliate commission on the product is very low. And we're going to see that as a pattern throughout all of these categories and or companies that we're talking about.

[Jill]

Yeah, I think for me it's the lie that's being sold from the top. So most of our friends that we know who are a part of mlms and are selling products and are recruiting, recruiting like they're not malicious in it and most of them are just kind of trying it out to see if maybe they'd be able to pay their mortgage with their sales and not really realizing where the true money is coming from and it's off the backs of those that are being recruited and how once you are kind of at the bottom of a downline, you're just statistically speaking your ability to make money is like so very low. So most likely you will be underwater, if not just kind of possibly breaking even. It depends on kind of where you are in the downline and lineup because you might say I have a friend who actually makes a lot of money. Maybe they got in early. Like that is possible that there's somebody who got in early and they got a massive downline and they are primarily making money off of the people that they're recruiting. But that is not the majority. For over 80% of the people who are going to actually be a part of the mlm.

[Jen]

And that is a conservative percentage.

[Jill]

That's very conservative.

[Jen]

So you've got that. And then you also have the fact that, so we all know like the six degrees of separation from Kevin Bacon, like that you can kind of use the same format. Like eventually everyone has some relation to Kevin Bacon. Eventually you're going to run out of people to be able to sell to and selling products that you can get very reasonably.

[Ad Read Host]

Yeah.

[Jen]

Other places from Walmart, from Amazon, from Target. And so again, yes, I love the idea of supporting small business, but when that business is a viable business model, when you're not like, I'm not going out here starting a small toilet paper company that sells the same toilet paper that I can get at Walmart, that's not a viable business. Right. Like, unless I'm selling a, a reimagined new version of a toilet paper, which. That is how a lot of them will market what their products are.

[Jill]

Yeah, yeah.

[Jen]

It is some kind of secret sauce. The thing you've been missing. You'll see a lot of that in like the wellness supplements.

[Jill]

Yeah.

[Jen]

There was a lipstick or a lip. The one.

[Jill]

The lip stain.

[Jen]

The lip stain.

[Ad Read Host]

Yes.

[Jen]

It market itself. And so this may be, this may be the caveat. It marketed itself as a lipstick that didn't come off. Yeah. And the biggest complaint for people is that it wouldn't come off. It would not come off.

[Jill]

Like is that it could have been too good.

[Jen]

Right. It was too good. And that is, I think the only product I've ever heard. I never tried it.

[Jill]

That went to the extreme. Yeah, yeah.

[Jen]

But like, so most of the time these are products and some of them, like Amway, literally market themselves as. It's the. As just normal products. They're not trying to revolutionize. It's literally just like, let's create a network of people that just buy our products from this off brand versus the big companies.

[Jill]

Even even if it were toilet paper for toilet paper, I still think you could get the argument of, yeah, but then I'd rather buy it from my friend who's going to make money than go to Walmar. And I think in that situation is the true understanding of what an MLM is. You are not supporting a small business. You are supporting this overarching. Like those that are at the very top of that business structure. You buying that product is actually not really helping that person even if that person thinks that you're helping them, they don't know their money situation.

[Jen]

Well, even so, like at when we say top, it's not even the women at the top or the men at the top who are the distributors. It's the top top. It's the people who created the company.

[Jill]

That is what I mean. Yeah.

[Jen]

Those are the ones that really do benefit the most. And when we get into this, these categories we think are the most insidious and they're the ones you don't hear about a lot because they are so litigious and dangerous, that those are the people who benefit most. So we will start out by saying, by reading a disclaimer because these MLMs are very litigious. We will say start by saying everything we're sharing in this episode is opinion based. It's grounded in only publicly available information and data and we do not make unverified factual claims. If the fact cannot be verified, we will not make it so. So maybe you'll see us be vague in some places and that's on purpose. It's not because we didn't do our research, it's because we're being intentional in what we're saying. There are a lot of great creators on YouTube who dive deeply into MLMs. We will link to them in the description. If you are hungry to know more about this, there are some people who just go after MLMs just to like dig into them. And there are some that really do create content to help viewers identify what's problematic. Not to bring anybody down, but to help people. Hannah Alonso is a great example of that. I, I love her content. She is the queen and so highly recommend. If this is something you want deeper dives in into individual companies, you can search for anti MLM. You watch one Hannah Alonso video and like 10 others from other creators are going to pop up. So you'll be in an appropriate algorithm. But so who we really want to dive into and who we haven't seen a lot of people dive into is the mlms of financial services. We're a financial podcast, so we know a little bit about money and financial services are not immune to MLM stuff. So there are, there have been a couple instances in the past that we will and companies that we will go over. But ultimately we want this episode to be a foundation that you can work from, to be skeptical, to be critical but not afraid of these financial services. We're going to talk about investing insurance, possibly real estate. Like all these things have sketchy players but they are not overall sketchy industries. So we want you to be able to participate in them without being afraid and just knowing what to look out for.

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[Jen]

The first one is investments. So there are multi level marketing companies that will sell courses on how to invest in certain things. So whether that is crypto forex calls options. Things that are not as talked about about investments online. They're more speculative, they're definitely parallel to gambling. And so you can see a lot of that. And so maybe you won't fall for it, but it is still good to know about it in case you have somebody in your life that falls into the category that they specifically target. Kind of like, well, so I, I.

[Jill]

Was surprised by this. I just want to interject to be like, I, yeah, I wasn't really aware. I knew that insurance, like there are some companies out there that have like an MLM style set up, but kind of how deep this runs is pretty shocking to me. But one of the things that's standing out about why we might, we might, our community find ourselves in one of these is having to do with complexity bias. And I think that's one of the mainstays of MLMs is that all these other ones are doing it wrong. We've got it right. Or shrouded in secrecy. Right. Like, I've got a business opportunity, but I'm gonna have coffee with you five times before I tell you about it or whatever it is. And so it's kind of making it's. It's building something up and then playing into this knowledge that I don't know what I don't know. And I always thought that there was some secret out there. And I think nowhere is that truer than specifically with financial products where we are uncertain about what investments to be in. We are uncertain about insurances. We don't.

[Eric]

Most.

[Jill]

The common person does not view themselves as an expert on these topics. So if somebody else positioning themselves as an expert, claiming all of these success rates, being super pushy, making it sound super complicated, that could sound right. That could be like, yeah, I've heard people like, you know, doing really well because of xyz. Those words are familiar to me. Go ahead, tell me about it. I think if we don't know all of the different designations of who to be getting information from, we could fall victim to this.

[Jen]

And even if maybe you're not victim to wanting to learn the thing, we all want to make more money. And so if you feel a little bit confident in one thing and you're like, I can make money by sharing it. That's how we get so many bad players on social media talking about financial things. It's. It's an opportunity to earn income. And when you give that to desperate people, then even good people can do not really good things. Yeah, yeah. So this company is called this is a recent example. It's called I Am Academy. And so it rebranded into Iovia in November of 2024. So literally. Right? Yeah, literally one year ago. It's because Iov.

[Ad Read Host]

Close.

[Jen]

IO means something in Japanese and via means something in another language. I don't know. They didn't even pick the same language. But it's. It. It's insolvent pretty much now, so we don't have to worry about it. So it's been known as several things over the years. IMarkets, Live, IML, Immigration, Master Academy, IMMA, I am Academy is what we'll call it for this.

[Jill]

But I am confused.

[Jen]

I am confused. And they want you to be confused. That is their business model, allegedly is. So IAM Academy is an American company that sells online investment courses to primarily younger audiences. And so that has been some of the FTC complaints, is that the audience is too young. So it was actually founded, according to Wikipedia, by former Amway sales manager Christopher Terry. So what IM Academy did is provided access to its online courses for a monthly fee, but students could be relieved of their duty to pay that fee if they recruit to other students.

[Jill]

That sounds right. That sounds right.

[Jen]

So the course is taught forex trading. So foreign exchange trading. And what that is is you're essentially trading foreign currencies. If one is down and one is up, you buy a lower one in hopes that it goes up and then sell it and you make a profit. So stuff like that, very speculative foreign currency exchanging. And it costs $250 upfront and then $250 a month. And so again, if you recruit two people in, then your monthly fee goes away. And as of 2022, its annual sales revenue was at over $1 billion, with about 500,000 members across the world.

[Jill]

That's wild.

[Jen]

So According to a May 2025 complaint filed by the FTC and the Nevada Attorney General's Office, IM Academy has employed instructors with no formal education and scammed its clients out of $1.2 billion since 2018. The complaint stated that the organization has mostly targeted young African Americans and Latinos in the United states. And in 2018, the company was fined for $150,000 by the CFTC for trading for its customers while not being a registered brokerage. So essentially, from the very beginning, it was playing foul because you need to trade for people, you need a lot of oversight, a lot of licenses. It's very hard. FINRA really closely regulates you. And so that's why they were fined, but then went on to essentially, the FTC complaint alleges that it very much operated like a pyramid scheme. If you want more information, Bloomberg actually made a beautiful 37 minute kind of mini like, like a de deep dive into IAM academy and it is perfect.

[Jill]

I hate this so much. I hate it so much. But here's the thing. Thankfully the solution is pretty easy. I think we hear something like this and it's like I have to know all about this stuff to be able to spot the fraud. And no we don't. I think we can essentially rely on if it sounds too good to be true. And it is like just that is true. But also knowing the designations of people who you can trust. We've talked about CFPs in the past. That is an example of a designation where you can go to them for financial understanding. We recommend fee only fiduciary CFPs. I mean they are fiduciary. If you want just kind of consultation on these things, it's not going to cost you a ton of money.

[Jen]

It will probably. If you go to a certified financial planner and only do like a advice per hour, it's going to cost you about $250. So like you could ask all the questions that you would have to a certified financial planner for $250 or you can pay people that have no background in investments and no licensing. You pay them $250 a month.

[Ad Read Host]

Yeah.

[Jill]

If you are just curious, like I don't know what. I don't know. This sounds really good. There are real people with very easy to identify designations that we can go to and ask these questions and we don't have to be expert.

[Jen]

Yeah, but I. So I don't think our listeners will fall for this in particular but I.

[Jill]

Think mostly because we don't want to be spending that much money.

[Jen]

Probably what I think is the most important thing to take away from this story is that we should be talking about what we know about investing because so many of the people that these, that this company in particular targeted were very, were young. They were 18 to 24 sometimes so. And the report even says they were targeting people in high school.

[Jill]

Oh my.

[Jen]

They're very young obviously and nobody is.

[Jill]

How are they affording that amount of money?

[Jen]

I don't know.

[Jill]

We don't know.

[Jen]

But so, so they're targeting young people who don't have the greatest long term decision making skills and they are targeting intentionally communities of color who do not have as much background in investing education. It was being very intentional with the communities that it targeted.

[Jill]

Then that's gross.

[Jen]

And it's disgusting. And I think it should anger us to the point where we are doing something about it. Because Jill and I, as the Frugal Friends, we don't have an investing podcast. People don't come to us to our podcast for investing advice. We don't give investing advice. But we will be certified financial planners sometime next year maybe. And you could pay us for financial advice.

[Ad Read Host]

Right.

[Jen]

Otherwise, nobody on YouTube or the podcasting world. We're not even in the investing category on Apple podcasts, so, like, they're not coming to us. But if you're listening to this and there are young people in your life who you can talk about this stuff with, it takes all of us to be talking about this, to be normalizing this, and to be educating ourselves so that stuff like this. Because this is not just like organized MLMs. This is just influencers on the Internet starting random courses. Because right now, IAM Academy is no longer. You can't get to the website, it's not posting on Instagram, but you can still see some of the people that they've tagged. And by golly, if they're not starting their own courses and starting their own grifts. So it's not just these organized MLMs that we will find problems with. It is across the board. If you allow the bad actors, if you, like, put on a bad show, bad actors are going to come in. And so it is all of our responsibility to be helping in the ways that we can and learning what we can. Even if you feel like you don't earn enough to invest now, even if you feel like now's not the right time to invest, I'm paying off debt. It is still our responsibility to get in there, educate ourselves and help the people. Like to just normalize conversations about it.

[Jill]

Yeah. To understand how companies are set up, what is their compensation structure, what does commission look like, and not participating in it. When we see these things happening. And I think that's the most difficult part because we can think of. I'm supporting a friend. My friend is doing this thing. I'm not signing up for the mlm, but yeah, sure, here we go with the next one. I need life insurance anyway, so why not get it from my friend who's doing this?

[Jen]

So this might be the most, like, sad part about the next category of life insurance is that your friend comes to you and they've just started this, this life insurance, you know, business, and they're selling insurance and you want to support them, you want them to be successful. And so people don't know a lot about insurance. It's boring. It's boring. It's intentionally complex and it has the most grifters in the financial services industry. Let me tell you. I just finished the insurance class for the financial planning degree and for the financial planning certificate. And gosh, if my mind wasn't numb for the whole thing. And gosh, if there wasn't like all of these different legislative acts because people take advantage of selling insurance to make a quick buck. It's just like law after law after law because so many scammy people sold insurance the wrong way. And now we all benefit from the complexity of the law and we all thank the government for its consumer protections. We do do that. We love consumer protections. That's, that's not satirical. But anyways, life insurance, it's okay that you don't know a lot about it. Nobody does. But there are some things that you need to know about it so that you don't overpay for it.

[Jill]

Yeah.

[Jen]

So essentially what I learned from my insurance class.

[Jill]

Yay.

[Jen]

Is that. So there. So life insurance, insurance in general is just one aspect of risk management. So risk management is just making sure that we don't have to have an emergency, have a risk, and then go bankrupt paying for that emergency. So there are different types of insurance, health insurance, home insurance, car insurance, life insurance. And they are all helpful in theory. And so we have risk management. We want to avoid as many risks as possible. We work out, we stay healthy to avoid using our health insurance. Right. And so insurance is like the last part of risk management. But you've got these insurance salespeople who make commissions on insurance, and you've got these people who make higher commissions on certain types of insurance. And when they don't have a fiduciary responsibility to you, they only have a responsibility to be licensed to take a test and pay a fee to retain their license and offer something suitable for you. Like if you're, if you go in for life insurance, they can't sell you disability insurance and call it the same thing.

[Eric]

Right.

[Jen]

That is truly illegal. So, but they don't have to sell you the, the best life insurance for you at the lowest price for you. That they are not legally obligated to do that. That even if they wanted to, sometimes they get into companies where they cannot offer you every insurance that is available. And that is where we encounter these MLM type insurance companies. And honestly, this is what inspired this episode for me, because I have a friend who got into. She got laid off and she immediately entered into this insurance company and she started posting on social media a lot about insurance. Some things I was like, this seems out of character for her to post and all of this. And I was like, it just, it gives bad vibes.

[Jill]

Yeah.

[Jen]

And ultimately what it. And then starts telling people like, you can be an insurance agent too, you can do what I do, join my team. And I was like, well if that doesn't sound like an mm, I don't know what does. And I didn't even know that it was a possibility.

[Jill]

Right.

[Jen]

For an insurance like broker like company to have an MLM model. I had no idea. But essentially what it is is it's these companies and they sell life insurance from a select few companies and they incentivize these agents. At first they pay them a very low commission and when you bring more agents into your team, the commissions on these insurances increase. And so these are licensed insurance brokers. They do. Sometimes they will only sell one type, but sometimes they'll sell multiple. So it's hard to tell. But the telltale sign is if you are comparing rates from multiple insurance life insurance companies, you'll see a stark difference in cost in what you can get. So if you're shopping for term life insurance and if you don't know about term life insurance, it's essentially if you die, you will, your family will then get a payout if you die within the term. So most term life insurance is 20 years. So if you get a term policy and you die within the 20 year term, your family gets a payout essentially simply if you die 21 years after you buy the 20 year term, you do not get a payout. So it's kind of like they referred as renting insurance. You can also get whole life and universal index life and universe. Like there's all types of permanent life insurance, which, that would be a whole other episode. That's, that's where all the shadiness reputation comes from. So that's a whole nother episode. But so you're buying life insurance from your friend because you want to support your friend, but you're sometimes paying like $50 a month for to rent a hundred thousand dollar policy when you could go somewhere else and get half a million dollars worth of term life insurance for 20 bucks a month.

[Jill]

Yeah. The issue isn't that you're not getting the real product like all of these MLMs, there's usually a real product attached to it. Same here. You will get the insurance that they're selling you. But the issues are when you have this sort of structure again, you may not get the right thing for you. It might not be the most suitable or the most affordable. And so much of what you're paying is just extra beyond what you're actually needing. And then just the, the problematic aspect of them making the majority of their money on just recruiting more insurance people.

[Jen]

And you're the money that you are paying for that insurance. You're not even truly supporting your friend. If your friend and would would have just gone out and gotten a regular like brokerage license or worked under somebody from one of these well known insurance companies selling insurance, they'd be making like an 80 to 90% commission on products sold for these MLMs across the board. For the, for the major ones you are getting 25% commission on what you sell. And it's not until you bring people into your team that your commission goes up to 30, 40, 50% on products sold. And so that is truly where the incentive to recruit comes from. But if you had just gone the other way and done it the old fashioned way, you wouldn't have to worry about recruiting. You could have one job selling insurance and you could be more confident because you would have more options.

[Jill]

Are they recruiting people? And then those people are just like quick taking a test to be able to sell insurance.

[Jen]

It's a test. I mean it's a state test. Like yeah, it's the actual test that you need that everybody takes.

[Jill]

Right.

[Jen]

To be able to.

[Jill]

So they are getting it. They could just go work with another company.

[Jen]

Yeah, but, but when you sign up for an MLM you are known as a captive agent. And so you can only sell what that company offers. Yeah, but if you're not a captive agent and a lot of people feel nervous at first starting their own without any experience and that's valid. That's super valid. But you can also what you would kind of lose from your commissions at one of these MLMs you could pay for possible like classes or mentorship in the field or just get like a job, I don't know. At Progressive. I don't know. Does not. It's not a good example. But so, so yeah like so the three life insurance companies that we partner with most often are Fabric Ethos and Ladder. And so we'll have the links to all those in the description. You can also find them [e-mail] ladder ethos and I think it's fabriclife.com frugal I don't know. We'll add that one to fabric.

[Ad Voice]

So.

[Jen]

And we say, and we don't just, like, promote one life insurance company because you need quotes from multiple life insurance companies. So Travis and I are on different life insurance companies. Jill and I are on different life insurance.

[Ad Read Host]

Yeah.

[Jill]

Eric and I have different life insurance policies through different companies.

[Jen]

So, like, based on your history and your health, a different company will offer you. Like, if you're looking for half a million across the board, different companies will offer you different prices for that. Like, when I went to go, when I applied for ladder, Ladder wouldn't cover me because I have a history of seizures. So then I went to Ethos, and Ethos did cover me. And Travis is with a company that actually stopped accepting applications, but is backed by Massmutual. So he still has his life insurance even though that company technically, like, no longer exists. So you. You have a lot of protections. I'm not saying you don't have protections with these. Legally you have to. But I don't want people to associate a lower cost with a lower quality.

[Jill]

Yeah.

[Jen]

So, yeah, you need to be. Or your broker needs to be running your information through multiple insurance companies to make sure that you're getting the coverage you need. That you know the coverage you need and that you're getting it for the best price available to you. Yeah.

[Jill]

So how can you know?

[Eric]

Right.

[Jill]

If you're just unsure, Somebody came to me and they want to sell it. I do need it. How do I know if this is the right one? There's a couple of things that you can ask of them. You can ask them, how many different insurance companies do they work with? Like, of the pool that they can recommend to you, we want to know that there's at least 20. Okay. That's kind of the low end of the spectrum. There are so many agents who work with 50 to 100 companies. So 20 is being really conservative. But if they've only got 5, 10, 15, that's not enough for you to be really certain that you're getting the best, best possible deal. And I think also being able to ask around as well. Again, ask a cfp, Ask other people that you do trust. Hey, who are you utilizing? Make sure that you're getting quotes. But again, today, you may not. Depending on what you're doing, you may not need a broker. You might be able to look up yourself what different policies exist. For me, policygenius is a great one. They will help you compare all different types of insurances, but life insurance is one of them. So if you just want a comparison website, frugalfriendspodcast.com PolicyGenius can help you with that one too.

[Jen]

Yeah, so there are. When you're looking at these MLMs, you may never know the name. You may just know the name of the friend or the person who is trying to sell you the life insurance. But we did wanna mention the three major firms that operate with MLM insurance models. And these, these firms do sell a legitimate product and they do sell them through licensed agents. But these should just be like names that you should know for your reference. So the biggest one is Primerica and they sell life insurance with this philosophy of buy term, invest the rest, which is actually sound if you want to avoid permanent life insurance. Whole life insurance, that is what people say like buy term and invest the rest because essentially you're going to get a bigger return. But if the company wants you to invest through them, that might be a red flag. But Primerica is a big one that you'll hear they work on an MLM model. World Financial Group is another insurance MLM and then Family First Life Life. So they all again have licensed agents sell legitimate products, but their agents don't have a fiduciary duty to sell you the best product available and they don't have access to every product available. So it is wise to do your due diligence with any insurance agent, not just these, but any insurance agent. And so know that when you are thinking about supporting a friend, consider if you are truly supporting them if they're making a 25% commission or if you're supporting someone maybe you don't know that is making an 80 to 90% commission. I know Family First Life, I think they don't work on that 25% commission model but it is still a multi level marketing type of operation.

[Jill]

So.

[Jen]

But yeah, that's something to consider on that.

[Jill]

You know what else is something to consider and is the best type of structure?

[Jen]

Oh, this is truly. And never sending a cease and desist. Never received one from somebody the week.

[Podcast Intro Announcer]

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[Jen]

Hi Jen and Jill.

[Kate]

My name is Kate and I'm calling because I had a New Yorker subscription and the renewal rate was 169.99 and I was almost going to cancel and then I figured I'd call and see if I could get a teacher discount. And I called and they said the teacher rate was 74.99 and I saved $95 and I still get to read a magazine that I really love. So thanks for encouraging everyone to live frugally and I am happy that I made that phone call.

[Jen]

Yes, girl, I'm also actually I have. I went on a Facebook Marketplace listing spree this week and I have. I had nine things up.

[Jill]

I've sold two so far.

[Jen]

Yeah, there is a struggle between like just wanting to get rid of it, give it away, and then doing just a little extra work to sell things and I think discerning what those you know that line is so that you can make an extra $400.

[Jill]

It can feel overwhelming to stack something like this on top of a move, but those are the times when you really could make a decent amount. And we know moves cost money. I just did one. It costs me a lot of money to move. There's just all sorts of unforeseen costs and so being willing to do some of this can really help to offset those costs in the move. So well done. Really glad that Facebook Marketplace pulled through for you. If you all listening, have a bill that you want to share. If it has to do with selling things, making money or buying things not being being fine with spending the money, or it has to do with just being Bill. Frugalfriendspodcast.com Bill we can't wait to hear it. I don't love paying rent. I doubt that big expense lights any.

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You know what's not going to steal.

[Jill]

My joy this holiday season?

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[Jen]

Okay, today's lightning round involves a story and a video.

[Jill]

Oh my yes.

[Jen]

So the question is what's a red flag that you'd look for and before joining a business opportunity. But I would say just a red flag in general and I wanted to play at least for my answer. Maybe you can have a different answer, but maybe we can both piggyback off of it. But this is a story from this guy Marco that I've seen a lot of online in the anti MLM community and it's his story about how he became passionate about making sure people aren't taken advantage of by MLMs.

[Marco]

When I was 19, my best friend who I met in high school invited me to an event for his new business. He invited me to the office he was working at and I watched as presenter after presenter told an amazing rags to riches story. And during the meeting I took out my phone and I looked up the name of the company that was being presented to me and I saw countless reviews saying this is a pyramid scheme, scam, etc. I'd only been exposed to this company less than an hour before and I had the same feeling. Something didn't seem right. Afterwards, my friend came up to me and he had this look in his eye and he was like, so when are you going to sign up? And when I got home, I called him and I said, you know, I looked up this company and I wanted to share some of the things I heard about with you. I don't want you to get hurt by this. And what I was told back was, you're just like everyone else. You don't believe in me. They told me you would say that and that that was the end of my friendship with my best friend of the past four years and it was my introduction to the world of multi level marketing.

[Eric]

Ouch.

[Jen]

So, yeah, for me, I think I love cults. If you know me, if you've watched or listened to the show for any amount of time, you will know I love cult documentaries, cult podcasts, the book Cultish by Amanda Montel, the psychology behind it. And I think it comes from, I mean, growing up in the church and.

[Ad Read Host]

I'm still in the church, don't you.

[Jen]

Know, so, like coming from it, from this, like, same but different, like view. I've just always been fascinated by them.

[Ad Voice]

Yeah.

[Jill]

Like what draws people into some sort of group movement? Where does it get, where does it become? Yeah, where the line is unhealthy, where is it?

[Jen]

I see it in mlms, the same language, the same like, literally physical rituals. I see all the same things. And people on social media who've gotten out of MLMs will tell you the same things. They experienced it, it firsthand. And so like, a lot of it is like very negative. And so I would say, like, my red flag is if I sense anything, honestly, like anything tapping into religious norms. There was a girl and gosh, I am forgetting her name. I'm so sorry. If I find it, I will, I will link it in the description. But, but she is a former Mormon and I'm going to look it up while I talk. And she was talking about, she did a video literally called why MLM means Mormons Losing Money. And so I would, okay, her name's Alyssa Grenfell and I would kind of associate MLMs in the religious space because of the networking Right.

[Ad Read Host]

In the community.

[Jen]

And she went so much deeper into how Mormons really promote their missionary, their two year missionary thing, and how that is essentially like direct selling and how they're very trusting, but only of people within the church. And so that really builds an instant trust with somebody selling you something, an unquestioned trust. And this is the biggest thing. You can't go to any church that you want. You have to go to the church that's designated for where you live. Right?

[Jill]

Yeah.

[Jen]

And I did not know that. And so you don't like the people you go to church with aren't just like there, they're also like your neighbors. And so in Utah that's like a block, right? Like it's so square, like a really small area because it's such a densely populated place. And so there were just so many like religious parallels between MLM and like the Mormonism. And it's not just like Mormonism, but you can see a lot of parallels between MLM cults and religions. And that for me, if I see like any overlap.

[Jill]

Yeah, yeah, yeah. Not that you can't be a whole person and integrate your faith into the things that you do in life, but when it starts to become like a manipulation tactic, like when I start to hear, you know, your sales connected to your level of faith, like ding, ding, ding, ding, ding, ding.

[Jen]

It can just be intimidation too. Like you don't want to. If everybody's doing it and you being the odd person out ostracizes you in this small community, like then you're just trying to preserve, be a part of it's self preservation at that point.

[Jill]

Yeah, yeah. I mean the whole thing, gosh, a business opportunity being a red flag. I think when there is a lot of mystery around something, when things aren't forthright, if it's not very clearly evident from the start, that raises a red flag for me. Not even just thinking, oh, where am I going to shop and buy things from? But if someone were to come to me presenting an opportunity, but it's like, like shrouded in secrecy and you gotta be in or you gotta ask the right questions. It's like, what's going on here? That's gonna like raise an eyebrow for me.

[Ad Read Host]

Yeah.

[Jill]

Well, thanks everyone for sitting tight with us for this one. It was a little bit spicy. Saucy. Let us know what you think though.

[Jen]

Yeah, please let us know in the comments if you like have experience with any of these MLMs and, or any really in general.

[Jill]

It's a tricky topic because we, we have plenty of friends who are doing these things and we don't think that they are bad people. And yet this is a circumstance where like buying from them is, is not going to do a great thing for them or the others who are a part of it like this. To me personally, my opinion is like these, this kind of structure needs to stop. It is hurting more people than it's helping. And so that's where kind of that active role of saying, no, I'm actually not going to come to that party. I'M not going to buy that thing. It's uncomfortable. But anyhow, yeah, so this is a difficult one. But we're here for you to help you navigate some of those tricky conversations and understand why we are pushing back against it. One of the things that is not that tricky is our book that we are super proud of and many of you have really enjoyed and left reviews for us like this one from Stephanie who says A New View on Finances this book ties a beautiful bow around the concept of only spending money on the things that you value. It helps to define your why and ultimately what makes you happy. I've read countless finance books but have never really changed my attitude and mindset about money. However, after reading this book and listening to the podcast, I understand that I've been spending on things that will mean nothing to me by the time they arrive at my doorstep. This book has helped me understand myself and the psychology aspect of money while giving useful money tips. Reading this book is like reading a letter from a long lost friend. My millennial heart has been filled with reminiscent moments from the past as they've been sprinkled in throughout this book with care. The book and the podcast has also changed my view on life and money for the better. I've always considered myself cheap, constantly searching for the next good deal or spending as little as possible while still trying to buy good quality. However, I know that some of this behavior is really frugality and I was able to stop the spending on silly things that don't really add value to my life and define the things that do. Thank you Frugal Friends. You are the friends I've never had and I have finally found a community of people who understand me. That's so beautiful.

[Jen]

Oh I'm so happy about that. We love hearing your reviews on the book. We love reading your comments on YouTube. We love reading your comments and your reviews on Spotify and Apple podcasts. So thank you so much for listening. We would love it if you could subscribe to the YouTube channel real quick. Even if you don't watch. If you're just a listener. If you could still subscribe that would be so helpful and we will see you next time.

[Eric]

Bye.

[Jen]

Frugal Friends is produced by Eric Sirianni.

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