MLM Basics: Critical Thinking for MLMers -- Errors in Perspective

Previously MLMSkeptic have pointed out various reasoning problems of many participants in MLM, but someone pointed out why don't I have a guide on what *should* be done instead?

So here's the effort, called it "How not to argue for MLM" series. You can also think of it as "Critical Thinking for MLMers".

Many of these have been covered previously as "Bad Arguments".

There are many kinds of errors in your thinking process. As the old saying goes, "To err is human." However, one must learn from the errors to improve oneself. Today, we will discuss "Errors In Perspective".


What is Errors in Perspective?

Errors in perspective basically means you have a biased perspective of the world; you don't see the world as it really is, but only as you saw it. It's as if you've been wearing a bad set of tinted glasses all your life that you didn't even know it was there. And that's why they are very dangerous for you to think critically... You may *think* you are doing so, but you're doing it from the wrong perspective / viewpoint.

If you are not in MLM, keep in mind that many MLMers will accuse you of having the wrong perspective, with bad argument such as "unless you're in it you don't have the right perspective" (i.e. "you have to try it to know it / criticize it")

There are many different types of errors in perspectives.


Unwarranted Assumptions

One of the hardest errors in perspective to detect are unwarranted assumptions, because they are usually implied, rather than stated outright, and thus, you almost have to read between the lines to see them. A lot of "folks wisdom" or "commonly held facts" are actually unwarranted assumptions.

Not all assumptions are unwarranted, as you can't live a life without some assumptions, like the guy you pass on the sidewalk is not going to jump up and stab you, or your car will start in the morning, and so on. You may be wrong sometimes, but most assumptions you made every day are based on your knowledge or experiences. It is when you assume too much, more than justifiable by the circumstances or experiences, that you get unwarranted assumptions.

One of the most frequent unwarranted assumption held by victims of scams is "because Scheme X paid someone, therefore Scheme X will pay me (in the future)." When you think about it, this is basically "the sun will come up tomorrow" assumption. It makes sense for the sun, but it makes no sense for Scheme X, no matter how good / honest / rich Scheme X appears to be.  Furthermore, pyramid schemes and Ponzi schemes always pay a few people and make them "judas goats" to draw other people in. Some people (even you) getting paid does not prove everybody will continue to get paid indefinitely.

So how do you stop making unwarranted assumptions? First you have to FIND the unstated assumptions, THEN you have to logic check them to determine if they are warranted or not.

Scam Basics: When you're beyond "not right", but into "not even wrong"

Why do victims of a scam never seem to listen to reason, before, during, and even AFTER the scam?The problem is, at least partly, due to lack of skeptical mindset.

"It is impossible for a man to learn what he thinks he already knows."
-- Epictetus, Greek Philosopher (55-135 AD)

If a victim already believes he knows all that he needed to know about a company or the product (usually by listening to some PR copy, and/or attended some cheerleading meetings), he will not do any further investigations, and will discount or ignore what other people tell him about the company or the product, esp if he already put money in or worked on promoting it ( also see IKEA effect)

Unfortunately, the demand for "MLM confidence" has produced a TON of so-called "internet marketers" that refused to understand they don't know ANYTHING about what they claimed to be doing. As a result, they believe blindly the bad info they have learned (or been taught), and attempt to deny reality with it. That, is dangerous behavior.

Here's one example... A gentleman by the name of "David Cant", who claimed to be internet marketer out of Australia.

First a little background info.  Mr. Cant created that website of his because he had a scheme that sells virtual units to alleged estores and you get paid if other people also buy into these virtual estores. It was reviewed as a pyramid / ponzi scheme. Mr. Cant was not pleased with the review and created the "counter" website (from which the above screenshot was taken).

This was what he wrote on his counter website about what was his definition of pyramid and ponzi scheme. Yes, I emphasize, this was *his* definition. Any red markups are mine.

Which has absolutely NO correlation to the actual laws of Australia on "pyramid selling schemes". Cant's definition basically picked and chose bits and pieces of Wikipedia along with a lot of wishful thinking ("there isn't any get rick quick schemes", yeah right) and some outright denial ("I don't agree with the definition"). As a result, the claims on his website bears NO resemblance to reality, such as actual laws and legal definitions.

In other words, Mr. Can't thinks he knows what pyramid schemes and ponzi schemes are, but he actually has absolutely NO IDEA. It's basically an incoherent rant by someone denying reality. Which is quite amusing since he claimed he used to work sysadmin at the Aussie Supreme Court Library in his LinkedIn Profile.  Yes, I checked. It's the SAME GUY. He's right next to tome of legal information that had he bothered to look up he'd have FOUND the actual definitions. Instead, he created this website to deny reality.

As the saying goes... "your position is not only not right, it's not even wrong."

MLM Basics: The Truth Behind "MLM Confidence"... When Being Confident Is Actually Stupid, not Smart

It seems that MLM / NM placed a LOT of emphasis on "confidence". If you search for "mlm confidence" you will get 441000 results (as of post date)

But what does this really mean? The first link, from which I quote:

If you lack confidence it doesn't matter how much studying you do you won't be able to grow your business... The key to creating rock solid confidence is to develop your beliefs. 

So what are the "beliefs" that this author advocates?

• Trust MLM industry (by reading Robert "Rich Dad" Kiyosaki)
• Trust Your Company (by looking for the upside)
• Trust Your Products (by consuming them yourself)
• Trust Yourself (by telling yourself "I am the best")

While I'm reasonably certain the author meant well, and these tips may have helped him, none of the nuances in his advice were discussed. And there are indeed a LOT of info that the author had not presented about how to develop this positivity.

Basically, all this confidence build tips means throwing "due diligence" out the window.

And that's very stupid.

Let's find out why.

MLM History: DSA Killed a Bill in 2010 That Would Have Saved MLM

Network Marketing is in an identity crisis, and it had been for decades.

At the beginning MLM was really about selling stuff. It is in the past 3 decades that MLM had morphed into an industry no longer cares about retail. And their industry organization, Direct Selling Association (DSA) does not even bear the MLM or NM name.

(Frankly, DSA had existed LONG before existence of MLM, and was basically "taken over" by MLM companies. But that's a different story for another time. )

Previously I've addressed how DSA managed to condemn FHTM in 2012, a pyramid scheme, mainly by dissociating itself far from FHTM and claimed FHTM was denied membership 3 years in a row. My conclusion then is DSA is not making any efforts to clarify the differences between its members and a pyramid scheme, and it may not like how FTC will shape the industry in the future.

I've also addressed that DSA has basically ignored the existence of product-based pyramid scheme, and this action is clearly deliberate, because it needed to defend Herbalife in 2013 amidst Bill Ackman's long and epic short. DSA should instead lead the effort to stamp out product-based pyramid schemes and lead its members to strive for retail volume. But it won't.

Later, I discovered a DSA position paper where it basically denied the existence of legal precedents (i.e. just ignore it) and everybody can self-consume to their own riches. That, I predicted, will lead to the eventual destruction of MLM itself, if not by Ackman, then by the government.

But what surprised even me was the DSA's reluctance to even nail down the definition of "customer"... and how they killed a legislative bill in Tennessee back in 2009/2010 that attempted to separate a legitimate MLM from a product-based pyramid scheme. It wasn't launched by a "crusader" who's out to kill MLM. It was launched by a MLM insider.

And it went down in flames, killed by DSA lobbyists.

Can You Forgive Your Pastor Defrauding You Because He Said it's "Not Intentional"?

Imagine this scenario:

Your pastor is a man you trusted because you trusted people who are men of God. You've seen him save people from alcoholism. You know him to be a moral man that came from humble origins.

So when your pastor claimed that he's started a business where he needed money to make money, and promised a hefty return, you did not hesitate. Your pastor claimed the money will be invested in foreign currency, or perhaps commodities...

But after a few months, perhaps a year or so of paying out... There is no more payment. That's when the pastor admitted he wasted all of your money. And money of hundreds of other churchgoers and his other associates.

But he didn't mean it. It was "not intentional". He lost money too.

Can you forgive him? When your life savings are gone? When you will probably lose your house and declare bankruptcy?

For hundreds of people around the country, this is not imagination. It is absolutely real.

Welcome to the world of religious fraud.  We got two sob stories for you.

BREAKING NEWS: PlanB4You Admin "Johny Schabregs" arrested by Netherland Authorities

PlanB4You, a suspected low-level ponzi scheme had been shut down in December 2014 by Netherland's FIOD (Fiscal Information and Investigation Service). Instead of keeping his nose clean and await trial, Schabregs, operator of PlanB4You apparently hoping for a fresh start, offered "two for one positions", i.e. buy one position, get one free. This resulted in his arrest on 20-FEB-2015 by FIOD. 

Prosecutors alleged that victims of Schabregs are spread among multiple countries in the Eurozone, including Netherlands, Germany, Belgium, Slovenia, and Italy. 

Even now defenders of scheme still claimed that the money will be used to start 25 companies and everybody will profit. 

http://behindmlm.com/companies/planb4you-ponzi-admin-arrested-in-the-netherlands/

BREAKING NEWS: SEC halts "Achieve Community" ponzi scheme

English: The U.S. Securities and Exchange Commission headquarters located at 100 F Street, NE in the Near Northeast neighborhood of Washington, D.C. (Photo credit: Wikipedia)

The shoe have dropped, folks. And it's actually a sledgehammer.

Washington D.C., Feb. 18, 2015 — 

The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze against two operators of a Colorado-based pyramid and Ponzi scheme that promises investors extraordinary returns of 700 percent through a purported “triple algorithm” and “3-D matrix.”

In a complaint unsealed yesterday afternoon in federal court in Denver, the SEC alleges that Kristine L. Johnson of Aurora, Colo., and Troy A. Barnes of Riverview, Mich., have raised more than $3.8 million since April 2014 from investors they enticed into buying positions in their company Work With Troy Barnes Inc., which is doing business as “The Achieve Community.”  

Full press release available here:  http://www.sec.gov/news/pressrelease/2015-35.html#.VOTcBPnF-Sr