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Survey: Vast Majority of Multilevel Marketing Participants Earn Less Than 70 Cents an Hour

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Take a look at your Facebook or Instagram feed and you’ll easily find at least one friend or family member constantly posting about the makeup, oils, supplements and even sex toys they sell to make some extra cash working from home. Most of these products and systems are provided through direct sales companies that use a sales model called multilevel marketing (MLM).

MagnifyMoney was curious about the return on investment for multilevel marketing participants and how their involvement affects their personal network of family and friends. We surveyed 1,049 multilevel marketing participants involved with at least one company over the past five years. Our conclusions show that most participants could earn significantly more money in exchange for a lot less time and money invested if they were employed in a minimum wage job.

Key takeaways

  • Most participants make less than 70 cents per hour in sales – before deducting expenses.
  • Fewer than half of participants made $500 in in the last five years.
  • Men report earning significantly more sales than women.
  • Married men and people who got money from friends and family to participate are the most likely to lie about how much they’re earning, fight with close friends and family, and even lose friendships than other groups.

What is multilevel marketing?

Multilevel marketing, or network marketing, describes a business strategy used by some direct sales companies. The sellers, called participants, earn commission or profit directly from the items they sell to their network. In addition, the strategy rewards participants who recruit new sales members to the company by giving the recruiter a commision from their recruit’s orders. In turn, the recruit can theoretically recruit another person and that third person in the recruitment chain can recruit a fourth, and so on.

Commissions from the last person recruited go to everyone up the recruitment chain. Recruits are often expected to purchase “starter kits” or inventory to start selling products, which also earn the recruiters (and the recruiters’ recruiter) commission. Thus, multilevel marketing as a business strategy incentivizes participants to grow a sales network underneath them, also called a downline.

MLMs often target stay-at-home mothers and others who may be interested in earning income in their downtime. But success in multi level marketing can be costly. Participants are encouraged to spend money to attend conferences and training seminars, invest in marketing materials and host events with the hope of selling products. All of the expenses are out of pocket and non-reimbursable by the company providing the products.

Multilevel marketing companies are swamped with controversy because the strategy lends itself to the proliferation of pyramid schemes.

The findings are concerning

The MagnifyMoney survey of 1,049 American multilevel marketing participants revealed many other concerning findings about the financial side of involving oneself — directly or indirectly — with multilevel marketing companies.

As far as side-gigs go, the earnings are minuscule

It’s hard work making money in multilevel marketing. Overall, 20% of participants never made a sale (18.3% if you exclude people who signed up just for discounts) and nearly 60% of participants reported earning less than $500 over the past five years.

Using median results, MLM participants worked 14 months out of the past five years for 33 hours per month. Overall, participants earned a median of $18.18 per month, translating to $0.67 an hour, before deducting business expenses. Meanwhile, workers in the service sector — the lowest-paid of all major occupations in the U.S. — earn an median $10.53 hourly compensation.

If flexibility is a priority for people looking for extra income, MLM participants should know they may earn more money working as an independent contractor in the gig economy. For example, the Economic Policy Institute reports Uber drivers earn an average $11.77 an hour, after vehicle expenses and fees are considered.


The gender wage gap is ever-present among MLM participants, as men earned a median $35 a month, while women earned a median $14. According to the Direct Selling Association, women made up about 73.5% of membership in direct selling companies in 2017.

Some lie about their earnings

If you ask an MLM participant how their business is going, you may not get a straight answer, especially if the participant is a married man, or if you already gave them some money for the business.

A little more than 22% of all MLM participants admit they have lied to friends and family about the money they earned or their total investment in their MLM business — granted, the relationship dynamic between seller and customer may encourage participants to lie about their income and investment to make sales and win over recruits. The focus of direct selling is selling your product to your network of family, friends and acquaintances. As a subset, multilevel marketing takes that a step further, as participants also try to recruit new participants from their personal network.

Based on the responses, married men and those who already received money from friends and family were more likely to lie. In response to the MagnifyMoney survey, 36.5% of married men and 35.2% of those who borrowed money from their families and friends admit to lying to friends or family about how much they spent or earned to participate.

In addition, 42.7% of married men say they’ve fought with close family and friends about how much time or money they’ve invested, as did 42% of MLM participants who got money from loved ones to cover some or all of their participation costs.

Some go into debt

The financial burden of success in multilevel marketing may encourage participants to rack up debt to attend conferences and training or pay for marketing materials and other expenses related to involvement.

Nearly one in three (31.6%) of MLM participants said they used a credit card to finance their involvement in the business, and nearly one in 10 (9.1%) participants report taking out a personal loan. Of those who used a credit card, 15.4% say they haven’t finished paying off their MLM-related debt. Of those who haven’t paid off their credit card debt, 63% report earning less than $500 from their MLM business. Separately, nearly half (49%) of those who haven’t finished paying off their credit card debt spent between $100 and $500 on their MLM involvement, overall.

About one-fifth of participants said they borrowed money from friends and family members. The borrowing may have had a negative impact on their relationships as nearly a third (30.9%) of participants who did persuade a friend or family member to give them money said they ended up losing a friendship, and more than two-fifths (40.2%) said they fought with close family and friends over the time or money invested.

Going into debt to participate in an MLM

Borrowing to participate in an MLM isn’t advised, based on our findings of a poor return on investment. But if you do, it’s important to understand your financing options.

If you are among those who may consider participating in a multilevel marketing company and need to borrow to cover your business expenses, you may want to consider using a personal loan as an alternative to financing with a high-interest credit card or risking your relationship with friends and family members by asking them for money.

A personal loan is a fixed-rate installment loan, as opposed to a revolving debt like a credit card, so it may help limit the amount of debt you get yourself into. Generally speaking, personal loans charge lower interest rates than credit cards to borrowers who are able to qualify for the best terms, so they may be a less-expensive borrowing option for those with good credit scores. As of this writing, borrowers may qualify for personal loans with rates as low as 5.99%, whereas the average interest rate charged on credit cards is 15% APR, according to Federal Reserve data.

If you do opt for using a credit card, you should consider applying for a credit card with an introductory 0% APR period, during which new purchases will not accrue interest. You just have to make sure you pay off the balance before the end of the intro period, otherwise you’ll have to pay interest on the remaining debt at the regular purchase APR — maybe even deferred interest on the amounts you paid during the 0% APR intro period.

If you already spent money on a high-interest credit card and want to save interest while paying it off, you could apply for a balance-transfer credit card with an intro 0% APR — or you could consolidate your debt with a low-interest personal loan.

Before deciding to borrow, you should always compare rates on personal loan offers from multiple lenders to ensure you get the best terms available to you. You can compare your top rate offers from multiple lenders in minutes with our parent company, LendingTree.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]

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Here’s Why Single Women Are Buying More Homes Than Single Men

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Right after she turned 30, public relations pro Wendy Hsiao put in an offer on a cute brick townhouse in Atlanta. “For a lot of my friends, being an adult started either when you got married or had a baby,” she said. “I chose to buy a house.”

Why did she buy? She felt ready for a major life change, considered buying to be a smart financial decision and wanted a yard for her Pomeranian named Georgia. “I felt like it was time to make a place my home,” Hsiao said.

Her story is one example of a growing trend: the rise of single female homeownership. Single women are far more likely to become homeowners than single men, according to a study on singles owning homes by LendingTree, which owns MagnifyMoney. In fact, single women own 22% of homes on average, while single men own less than 13%.

This “gender gap” stems partly from the fact that single women prioritize homeownership when setting life goals. In fact, 73% of single women list owning a home as a top priority compared with 65% of single men, according to the 2018 Homebuyer Insights Report from Bank of America.

Single women are “skipping the spouse and buying the house,” according to the Bank of America report, which found that single women rank homeownership as a goal above getting married (41%) and having children (31%).

From homemaker to homeowner

While there’s still work to be done, women have taken huge steps toward professional and financial independence. Homeownership in particular contributes to economic stability, so it’s great that more single women are buying homes. There’s no doubt the increase in the number of women in the U.S. workforce, a figure that has more than doubled since 1975, has contributed to the trend. Here are some other driving forces behind the rise of single female homeownership:

Homeownership empowers women. Homeownership offers a place to live, stability and a way to build wealth, so it’s no surprise women view owning a home as empowering. In fact, 31% of single women (vs. 23% of single men) feel empowered when thinking about buying their first home. A licensed real estate agent in Chicago, Martina Smith bought a condo in her dream neighborhood of Streeterville after she broke off an engagement a few years ago. Her budget only allowed her to buy a “fixer-upper,” but she got a great deal and renovated her place. “It’s been very rewarding and empowering,” she said. And she thinks it reflects a bigger national trend. “We’re seeing more women taking charge,” Smith said.

Women are becoming more educated. Over the past few decades, women have become more educated than men. In 2017, 38% of women and 33% of men ages 25 to 64 had a bachelor’s degree. In that age group, 14% of women and 12% of men had an advanced degree. And women are putting off marriage to pursue that education, according to the 2018 Women in the Housing & Real Estate Ecosystem report. Educational attainment has a positive impact on homeownership rates.

Women are done waiting to marry. There’s been a cultural shift where women no longer feel they need to wait until they pair up to embark on certain aspects of “adulting,” said Kelley Long, a CPA and certified financial planner with Financial Finesse. “I will never forget a friend’s dad chastising me for doing ‘nesting’ things like buying nice furniture before I was married because of his perception that you just don’t do things like that until you’re married,” Long said, adding that women are “rejecting that idea because it’s not true.” If you want to marry in the future, the right partner will likely be impressed that you were financially secure enough to buy a home on your own, she said.

Single moms want a home base to raise kids. “Oftentimes, when people buy homes it’s for lifestyles reasons,” said Tendayi Kapfidze, chief economist for LendingTree. Getting married is one big reason, but having children is the other, he said. About 21% of U.S. kids live with single moms, a number that has almost doubled since 1968. In contrast, just 4% of kids live with single dads. “Children prompt people to buy homes,” he said. “So that might be one of the factors at play.” And it’s not just kids. As many as eight in 10 caregivers for elderly parents are women. The median age of a single female buyer is mid-50s, points out Jessica Lautz, vice president of demographics and behavioral insights for the National Association of REALTORS. A single female homebuyer “may be coming from a past relationship and purchasing a new home for herself, her children and her parents,” Lautz said, adding that single females are “willing to make sacrifices” to purchase a home.

So what does the future hold for single women owning homes? If marriage rates among all U.S. adults continue to drop, it’s likely the number of single women purchasing homes will rise even more, Lautz said.

Turn your homeownership dreams into reality

Strict lending standards can make it more difficult to qualify for a mortgage on a single income. Considering women also only make 80% of what their male colleagues earn, getting to a financially secure enough position to afford homeownership may feel daunting. Here are three tips for single women looking to buy a home of their own:

  1. Prep your finances for homebuying. It’s important to check your credit and your debt-to-income ratio before you start the homebuying process. If you spot problems, work on increasing your credit score and paying down your debt before you try to get preapproved for a mortgage. Getting the best possible rate can save you money over the life of the loan, which is especially important when your household depends on a single income. The upside is that single women have complete control and don’t need to worry about anyone else’s shaky credit or loads of debt. “If you’re in a couple, somebody is going to be dragging the other person down,” Kapfidze said.
  2. Build your nest egg before you buy. Forty-eight percent of women say they haven’t purchased a home yet because they haven’t saved enough for a down payment. But that’s not the only savings barrier to breach before taking the leap into homeownership. “Make sure you have a robust emergency fund,” Kapfidze said. Because single homeowners are on their own, they should set aside at least three months of mortgage payments as part of their emergency fund, Kapfidze suggested. “If you’re single, you’re the only one with income coming in to pay the mortgage,” he said.
  3. Pick a home that comes in under budget. Single women have lower household incomes than single men, so they may need to consider buying a smaller home, taking on a house that needs some work or settling in a lower priced neighborhood. The good news is that single women may be doing exactly that. In fact, the average home purchased by a single woman cost $173,000 compared with over $190,000 for a single man. Single women “may need to make price concessions when purchasing to find a home for themselves and their families,” Lautz said. And buying less house than you can afford can help you make your mortgage payment more easily if you hit financial hard times in the future.

Finally, it’s normal to feel stressed when you think of buying a home. In fact, more women (40%) than men (30%) feel overwhelmed by the idea of homeownership. But even though the homebuying process was scary, Hsiao said she has zero regret about buying a home of her own: “If you love the house, it’s 100% worth it.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Allie Johnson
Allie Johnson |

Allie Johnson is a writer at MagnifyMoney. You can email Allie here

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