From: "John A. Weeks III" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Help! Disposable income & no clue how to use it ....
Date: Sat, 19 Mar 2005 13:45:56 CST
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	=tF/b

In article , "Bill"  
wrote:

> MLM???

Multi-level marketing.  While there is nothing illegal about
most MLM schemes, many operate in a grey area of legality.
Primera is a classic MLM scam.  They recruit people off of
the street to become financial planners.  These folks have
no background or training.  All they do is go to a weekend
of religious-like training on how to be a member of their
cult-like organization.  The products that Primerica sell
are poor performers, have long-term locks in them, and they
are vastly overpriced.  They have to be in order to pay
out the huge amounts of commissions that flow across 7
levels of downlines.

I really don't care who you buy your financial products
from, but I do care that you get a good product for a
reasonable cost.  If anyone pitches a Primerica product
to you, be sure to compare that to similar products on
the open market.  You will find that load fees are less
on the open market, rates of returns on fixed investments
are often higher on the open market, interest rates for
loans are often less on the open market, and you are
not locked in for life on many of the open market products.

Typical things that Primerica try to do include:

a) selling you very expensive "lifetime" life insurance,
when you can get term for 1/20 of the cost.  Term is
best for most people anyway since they will have few
responsibilities once their kids grow up, and most
people can go self-insured by that time due to their
retirement savings.

b) selling you a high-fee home re-finance at a higher
interest rate by telling you that you will save money
by going to a bi-weekly plan.  In reality, most people
can get the same effect by paying their current loan
biweekly without doing a refi or paying a high fee,
and simply paying an extra payment once a year accomplishes
the same thing with no additional fees.

MLM can be a legitimate form of business.  There are even
some legitimate MLM companies out there.  The key is that
they have to have a product that is competitive on the
open market.  That works for some unusual products that
have a hard time getting into stores like high-end skin
cream, high touch items like cosmetics, or odd products
like blue-green alge.  But those that sell the $6 light
bulbs or $5000 water filters are simply scams wrapped
around a pyramid scam.  Avoid them at all costs.

-john-

-- 
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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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