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Chelsea sits down with Josie Naikoi, a YouTuber and former top MLM earner to expose the truth of the industry then and now.

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Hey, guys.

I'm Chelsea. And I'm Lauren.

And we are-- --The Financial Diet. And you're probably wondering what I'm doing here again after such a long hiatus from video. Well, it's funny you guys should ask, because we're actually here because we're doing something extremely exciting together later this month.

What are we doing, Lauren? So we are hosting a two-hour workshop-- --at 6:30 PM EST. 6:30, yes, and we're going to be talking about how to be an entrepreneur, how we did it, our experience building a business, lots of fun stuff. I mean, we're going to be talking about-- I think we have like 50 slides in our PowerPoint at this point, talking about everything from design, marketing, know-how, financial stuff, bootstrapping, staff.

I mean, we're going to be talking about it all. We're going to teach you everything we learned in the process of bringing a business from literally zero to well over seven figures, and employing, in our case, a substantial staff. But for you, small business might look like just one person freelancing.

Whatever entrepreneurship looks like to you, even if it's just a side business, this is the workshop you need. We're going to be going over all the legal stuff, the trademark stuff, the accounting stuff, the marketing stuff, finding clients, all of the things that you need, making a business plan, basically the whole tool kit. We're calling it the Entrepreneur Bootcamp, but it's really your whole tool kit to getting started on entrepreneurship.

Mm-hmm. And you're going to be walking away from that workshop really feeling a lot more confident and prepared to tackle whatever endeavor it is you're choosing to tackle. And we're each going to be hosting, on top of that, a separate office hours.

You get one with each of us. I'm going to be talking about a lot of the logistical aspects of business-- making a business plan, business strategy, all of that kind of stuff. Mm-hmm.

And I'll be talking about branding and marketing in mine, and what you need to do to make sure that your business looks polished and professional. Whether you're engaging a help of graphic designer or trying to bootstrap it and do it all yourself, I'm going to be talking about all of that in mine, as well as marketing and finding your audience. And then turning that audience into money.

Money, money, money. So this really applies to any kind of small business, any kind of side hustle. Nothing too big or too small.

Bring it to us and join us at the Entrepreneur Bootcamp. In addition to the class and the two office hours, you're also getting all kinds of extras, downloadables, interactive components. If you can't join live, no problem, because you'll get the access to the recording, after, to watch or rewatch as you want.

And you guys are going to get an exclusive discount at the link in our description. So go ahead and click that, and we'll see you there. Bye.

Hello, everyone and welcome to an all new episode of The Financial Confessions. It's me, your host, Chelsea Fagan, Founder and CEO of The Financial Diet and person who loves to talk about money. And something that you've probably heard me/us talk about on this channel before if you've watched for any amount of time, really, is the MLM industry, why it's bad, why it's predatory, what it does to women, especially women in fairly vulnerable economic positions like stay-at-home mothers, single mothers, military spouses, women who don't generally have a ton of economic opportunity elsewhere.

Now, this is not exclusive to women. There are MLMs that are primarily male focused, but it is an overwhelmingly female industry. And there are a lot of reasons for that.

There's the fact that it is a fundamentally community-oriented business, for the most part. It depends on connections and relationships. And in many ways, the structures that MLMs form become social circles, "friend," quote unquote, circles, which, in many cases, prove to be quite toxic if you're not living up to the standards of the MLMs or decide to leave it at some point.

Many connections have been made-- and you may have watched our interview with Professor Bill Keep, who specializes in just this, and we'll link you to that in the description-- about how difficult these organizations can be to leave. They use, often, many of the same tactics as other insular communities like, for example, fundamentalist religions. And it's not a coincidence that they also tend to be quite popular in some of these same religious communities.

There are tactics of silencing. There is a huge aspect of litigiousness. There is groupthink.

There is peer pressure. There are all kinds of reasons why it is very difficult for someone to leave an MLM once they've already gotten involved, and especially if they've gotten involved at a higher level. So today, I was very, very excited to have the opportunity to speak to one woman who was herself quite highly ranked in an MLM, who had kind of the best possible experience that one could hope to have in these organizations, who lived the dream that women are being sold when they're brought in at the bottom-- and again, a dream that, for the vast majority of participants, isn't going to come true-- but herself decided to leave, and suffered all kinds of issues, after the fact, which we'll get into, and eventually decided to kind of come out of the anti-MLM closet and start doing content specifically speaking to that experience, warning others, demystifying some of the process, talking about the warning signs, and generally doing everything she could to make sure that other vulnerable women don't get sucked into these organizations, even though, on paper, she could still be touting herself as a kind of success story.

I'm really, really happy to have her here, talking to us today, answering some of my and your questions, and generally providing a perspective into this industry that I frankly don't think that we get to hear enough. So without further ado, please welcome my guest, YouTuber and ex-MLMer Josie Naiko. Hello.

Thank you so much for having me. Hi. Thank you for being here.

Welcome, welcome. So can you quickly, before we get into it, just give the topline stats for our audience, kind of a little bit about your background, what you do now, and who you are. Yeah, absolutely.

So currently what I do professionally, now, is I do YouTube full time. I make documentaries on scams and cults. It kind of naturally morphed into that after talking about the anti-MLM community, what I experienced, and then interviewing others who had been involved in it, and then interviewing people who had been involved in fundamentalist religions, because they all have these cult aspects.

And so I was a hairstylist. And I live in Missouri. And at the time, I lived in a really small town, but I had built a really successful hair clientele.

And I was booked six months ahead, I had worked really hard, and I was really excited about that except that I had medical debt because I had a whiplash injury that I was being treated for, and I was in PT. And even though I had health insurance, I had medical debt piling up. And that is essentially what got me started in MLM.

Because I remember thinking, if I could just make a little bit of money to help me with this medical debt, that would be amazing. Because I couldn't take any more clients at the salon. I was too booked.

My injury was being aggravated by the repetition I was doing, all day long, at work. And so I fell in love with the product first. It was a health and fitness multilevel marketing company.

And at the time, I was thinking, oh, I need to lose some weight. Like, let's try this product out. Let's see how it goes.

And I had some success with it. Like, I really liked the products. And then I saw this woman online who was sharing her success story.

She was in the top 1% of the company. And I didn't really understand what MLM was, because this was back in 2013, and there wasn't the anti-MLM community now that there is today that's so verbal and vocal on YouTube, which is fantastic. I wish it had been there at the time.

But I just was like, oh, she sells these things and gets a commission. OK, cool. So I reached out to her, and that's how it all started in fall of 2013.

And so when did you leave? And what distance was there between when you left and when you started the YouTube channel? So I started becoming disillusioned with everything, I would say, around 2018, I want to say.

And you have to be very careful when you're in these organizations because you can't express any dissent. You can't express anything critical about the organization or what it's doing, because you will instantly be shunned and you will be looked at as a negative and toxic person, which is what they teach you in these companies. It's the worst thing to be.

And not only will you be affecting your business, which will affect your income, but you will affect everybody else's business and nobody will want anything to do with you. So when you start doubting what's going on and what you're seeing behind the scenes, you have to be very careful with how you approach it. So for me, I always say, when somebody leaves an MLM company, it's usually not just a cut-and-dry thing.

It's kind of like a slow, painful burn out. And that was how it was for me. So I believe I officially quit in the beginning of 2019, beginning of summer 2019.

But I had stopped working at the end of 2018. OK. And then you started the channel in May 2020.

Yeah. I was working as-- I went back to work as a-- I'm a licensed cosmetologist, and I went to work as an esthetician, which, in the state of Missouri, you can do as long as you're not doing chemical peels. And so I was working as an esthetician at the time.

And I was dealing with a lot of struggle. I felt like a shell of a person I was when I left the industry. I was blocked by so many people I thought were my friends and that I was close to.

And I just was like, what happened? How did I get here? I had been fined by the IRS for things that I didn't know about.

I just remember thinking, like, oh, crap, like, why didn't my mentor tell me this? She was making millions a year. But they don't teach you about numbers.

And I think that they don't teach you about numbers because, obviously, most people don't make money in it, so they probably don't want you looking at the numbers. But for me, I just remember I was just trying to not say too much about my experience of leaving, because I still had it in my head that, if I spoke out against it, I would be this negative, bitter person. And I didn't want to be that person, but I also was diagnosed with depression and I was struggling, and I couldn't understand why I felt this way.

And then the pandemic happened. And I saw, online-- it was when I had social media. I don't have Facebook or Instagram anymore, but at the time, I did.

And I saw the uptick of posts from people saying, this is why I have this at-home business. This is why I'm with this company. This is why I have my own small business.

Because stuff like this will happen, you will lose your job, and you won't have anything else there for you, and you have to be able to take care of yourself. And I just saw all these vulnerable people who were scared with the pandemic happening, they were scared because they've lost their jobs, they were scared because they were in lockdown, there was a virus with no vaccine, and they were scared because they didn't know how they might make it to the next month. And I saw them being preyed upon by a lot of people in the industry.

And I just thought to myself, I don't know if I would have been able to make it if I had left the industry after coming out of 2020, after the pandemic. I think it would have been too much with all the cult-like tactics I went through, the brainwashing, just everything, the depression. And so I said, I feel like I just need to put a video out.

And I'm just going to say what I saw at the top, behind the scenes. And I knew-- I was like, I'm going to get so much hate. Like, I'm going to get people who are so upset with me because I had preached it for so long and shouted it from the rooftops that it was the way and that this was the opportunity, especially for women, which I will always regret, but I really believed in it at the time.

And so I just decided, I can't stay silent, and I put it out there. And here we are. [LAUGHS] That is-- wow. OK, so you made it quite high in the top sort of percentiles of your organization.

You mentioned your mentor was making millions of dollars. Did you come out positive, financially, at the end of this? No. [LAUGHS] Now, I can't say-- it's not that I-- here's the thing, and I should have prefaced this from the beginning.

I am a victim of the MLM industry, but I was also a perpetrator. And I think that's really important to say, because anyone who is a part of a cult, whether it's religious or commercial, you are, first, the victim, and then you become the perpetrator because you're recruiting others into this thing that you believe in. And so I was doing very well.

I had just made six figures my third year in. And then, all of a sudden, everything started to go downhill. Like, it was crazy.

I remember, in one month, our income, within the whole company, was slashed by like 60% to 70%. And we all started freaking out. And they have the saying in the MLM industry, that is, don't complain down.

You complain up. Because you only complain to your upline, which is the person you signed up under. You never complain down, to your downline, the people under you and those people under them, because then you're going to be spreading fear.

So you can't even let people below you when there's a problem. You have to be like, everything's fine, everything's fine. [LAUGHS] So I was freaking out because people were asking me, hey, what's going on? My income has dropped.

I was doing the same thing to my upline. And that was the first time I experienced a little bit of disillusionment because we were gaslit. And we were told, nothing's changed.

You just need to work harder. And the CEO, at the very top, was saying the same thing. And honestly what really had happened was streaming had passed us by.

We sold workout DVDs and health shakes. And Netflix, Hulu, everything was taking off-- Amazon Prime, everything had been taking off. And so it was 2016.

Within just a couple of months, our income crashed. And so we just kept saying, like, can we change the compensation plan structure? Can we change this?

Can we change that? Is there anything else we can do to help us? And we were told, no, nothing's changed.

You just need to work harder. You need to stop being a negative person, yada, yada, yada. And so that was the first time that I personally had seen, oh, whoa, this isn't what they preach.

But at the time, I had already been so indoctrinated to believe that network marketing is the way, that it was so much better than a J-O-B, which they teach you stands for Just Over Broke. And so I thought, OK, it's just this company. It's just this company.

I'm going to leave this company, and I'm going to find an MLM company that treats its distributors with respect and well. And I joined two other companies. I got to the top 1% in those.

And I realized, pretty quickly, oh no, this is the same everywhere. And when you're in the top 1%, you talk with other people who are also in the top. And so you hear the same complaints.

And a lot of people will even keep other top people on the back burner, they'll keep a relationship going, just in case something happens to their company, so that they can kind of just rush over there and start building there. Because basically you're building a deck of cards. And so it was around 2016, I think, late 2016, that the IRS contacted me, and they said, you have not been paying quarterly taxes.

And as a hairstylist, I'd always been a 1099 contract worker, so I did my taxes annually, like most other Americans. And that's the same thing in an MLM. When you are a distributor of an MLM company, you are not an employee.

You have no employee rights. You are a 1099 contractor. And so I still paid my taxes annually, every year that I was an MLM distributor.

I didn't know that, once you hit a certain level of income, you have to start paying quarterly or the government will fine you. So I was charged, I think, after fines and penalties, like $11,500. And I just was like, oh my gosh.

And I had already transferred to a new company, I think, around then, or I was getting ready to because our income had dropped. So basically I was, like, starting from the bottom, building up again. And it was like, oh, wow.

So I didn't even finish paying off that IRS loan until-- I think it was the beginning of this year. Jeez. Well, I mean, listen.

We've said it a million times on this show, But. Don't mess with that IRS. They will get their money.

Do not. Truly. I said IRS loan, but I met IRS-- the penalties, and payments, and everything.

Yeah, no, it was a nightmare. And I just remember looking at my upline, who was the number one person in the company. And I just thought, why didn't you tell me?

Because here's the thing-- and yes, it was my responsibility because, technically, it was my business-- but you are literally indoctrinated. From the moment you sign up as a distributor, you are flooded with so much information, files upon files. Then you are kept very busy.

You are added to all these private Facebook groups. And you are taught, OK, here's how you reach out to people. Here's the scripts.

Here's what not to do. Oh, don't forget, we have a weekly meeting on this day and this day. You need to schedule a one-on-one with your mentor soon.

You need to do this. Here's these books I want you to start reading. Make sure that, when you're in the car, just driving to the grocery store, that you turn into a mobile university and you're listening to an audio book.

You don't need to listen to music anymore. You just need to listen to things that will help your business. We were even told, you need to pretend that you are a soldier who is going to Iraq and you will be out of commission for three months because you will be working your business that hard.

But it will benefit your family. It will take you to a road to financial freedom so that you can later say, look, I did this for us. I know we had to sacrifice, but it was all worth it.

And they really get you with those desires that you have for-- whether it's your debt, or you don't have a savings. People don't join an MLM company when they're doing well. They join when they're vulnerable.

And that's where they get you. And I really believe that the majority of people who join these companies are good men and women who want to help others, but they are misled on a campaign of disinformation and indoctrination. Well, I mean, first of all, I have a lot of respect for you coming out and saying, I was a victim but I was also a perpetrator; I have a lot of regret about that.

Because I do think-- and it's something we've talked about before on this channel. I think that there's a lot of-- obviously, when these stories come out-- and it's not just MLMs, right? You rightly point out that this is the same kind of stuff that we see in religious fundamental groups, and cults, and things like that, where there are a few people at the top who, when the stories break, when things come to light, there are a few people who sometimes literally go to jail.

They're definitely criminal masterminds, and they were acting completely exploitatively, maliciously, whatever. And I feel like there's usually a good amount of-- what's the word? There's a real reckoning, I think, for a few people in these instances.

And then I think that there's not enough, sometimes, ownership-- like we recently did an episode of this podcast where we talked about NXIVM, which I'm sure you're probably familiar with. And I'm sure you might have seen the HBO documentary, The Vow. I liked the documentary, but it also drove me absolutely crazy because the two narrator/protagonists of it were clearly, themselves, beyond culpable and doing all kinds of things that-- I mean, they were physically branding people, they were abusing people.

They were definitely also-- and yes, they probably, in many ways, started as victims, but they were also perpetrators. But I do feel like part of the reason that there's such a continued ability to be able to be predatory and to not think of it as predatory is because I don't think there's enough people like yourself who are really upfront about the fact that, yes, you were a victim, and you're speaking out against something that victimized you, but you were also a big part of the problem. Mm-hmm, yeah, absolutely.

And anyone who gets involved in these organizations, you just perpetuate all the horrific things about the organization and the industry itself. So there's a thing that I saw, a lot, once I had risen through the ranks. And I noticed that a lot of the top 1%-ers would walk away from the industry, which, at the time, I was like, what are they doing?

Why are they leaving? I can't fathom that. I love this.

This is amazing. Yeah, totally drinking the Kool-Aid. But I noticed that they would not speak out against the industry, but behind the scenes, if I talked to those people or we started talking, they were so upset with the MLM industry.

I mean, I eventually left for the same reasons they did. However, a lot of people, once you get to that high of a number in your ranks and you're in the top 1%, you build a large following online. You don't get to the top 1% unless you have a large network to begin with.

And so even though they'll tell you, oh, it's all about how hard you work, it's all about your mindset, you have to stay positive at all times, that's all it comes down to, that's not the truth. It's really about the size of your network. So once you build these large followings, if you speak out against the MLM industry, you're losing all these people who had built faith in you and who looked at you for inspiration for building their dreams through the MLM industry.

And so I saw a lot of people, they decided, OK, I want to monetize my following so I can't speak out, because I want to sell courses, or I want to sell this other thing, or I want to sell this. And I'm not saying there's anything wrong with selling courses or anything like that. But they knew that if they spoke out, they would be shunned because you can't speak out against it to somebody who's in it.

They won't do it. When it comes to the actual money that you were making, were you actively selling a lot of the products at the time when you were at the top 1% of these organizations? So, I mean, I was selling a good amount, but I was only-- in my first company, which is the company I made the most in.

I'll give you an example. So before taxes, my paycheck could be around like $1,500 to $2,000 a week, but my sales of products, my retail sales from that, was maybe anywhere from like $200 to $400. OK.

So the vast majority is coming from your downline. Absolutely. It's coming from recruitment.

So you can be an amazing seller, but you're not going to make a-- you're not going to be able to live off that. This is maybe a naive question, but obviously, speaking to you, it's very obvious why you were in the top 1% of your organizations. You're very put together.

You are very confident, outgoing, you have an aspirational sort look about you. And that's the kind of personality type that really translates across, basically, all sales jobs. Did you ever consider, what about doing an actual traditional sales job, as an employee of a company, where you get, probably, commission on top of your base?

But moving into the non-network sales world, is that something you thought about? Was there a reason you didn't do it? Yeah.

So I actually tried. Well, I tried to an extent, because when I left the MLM industry, I had so many people say the same thing you just did, which was would be amazing at sales, and you would make a whole bunch of money in a sales job. Just do it.

I was so burnt out on sales. To this day, I am still burnt out on sales. I don't sell merch on my YouTube channel.

There's nothing wrong with it. I just don't want to sell anything. I am so burnt out on it.

And a big reason is because in the MLM industry, you learn manipulation tactics. You learn so many manipulation tactics when it comes to selling to somebody, when it comes to how you craft your content to post online. Everything is manipulation.

And a lot of the sales world also bleeds into that. They're using a lot of the same tactics. Now, it's not all manipulation, but a lot of it is manipulation type tactics.

And I remember, when I got out, I just was like, I can't be around it. I don't want to sell anything to anybody. I was having an identity crisis.

Now, I did apply to a couple sales jobs, but I had a really hard time finding a job after I left. I knew I couldn't really go back to being a hairstylist, even though I've kept my license current, because of my injury. I just knew-- I was like, I'm going to be back in PT, Physical Therapy, immediately, because of my injury.

And so I was looking-- I applied to copywriter jobs, I applied to a couple of sales jobs. Most of them wanted me to have a college degree, which I do not. I went to hair school.

And then I also had a problem because I had almost a six-year gap on my resume when I was in the MLM industry. And nobody in the regular professional workforce takes that seriously. Which, of course, why would they?

But so it was really hard finding a job. And so I saw that there was an opening for an esthetician. And I saw that, in the state of Missouri, with your cosmetology license, you can do it.

So I love skin care, and so I applied for that. And I still had to sell products in it, but it wasn't anything as high stress like a regular sales job might be, or as much as a regular sales job might be. So that's what I did.

It's funny you say that, that the MLM stuff isn't taken seriously in the traditional professional world, because as someone who does a fair amount of hiring, obviously you'd have to be very disillusioned and actively anti-MLM, because otherwise I feel like you're probably still perpetuating some bad stuff. But honestly, the skills that it takes to get to the top 1% of an MLM, I actually think, are much harder than many traditional 9:00 to 5:00 jobs, and demonstrate a really wide range of skill sets, especially the soft skills. Now, obviously, as you mentioned, you could easily use those for evil and be manipulating people into some really bad financial decisions.

But they're also, I think, a lot of skills that really lend themselves to more, quote unquote, "traditional" jobs. So you mentioned that you live in Missouri. Is that right?

Mm-hmm, yes. Now, I think there's a bit of a stereotype amongst the MLM world-- or looking from the outside, that there are parts of the country, there are specific communities, there are areas that are more heavily targeted. Do you find that the MLM sort of industry and the culture that surrounds it is very prevalent in Missouri?

I find it's very prevalent in-- I'm trying to think of how to word this correctly. It's very prevalent in places where large groups of people gather regularly, like churches. It's very common in those things.

Because if you are a part of a church, you have a built-in network. So I left the church. I'm like 35 now.

I left the church when I was like, 21, 22. And I was like, I'm never going back. I'm done with this.

I was raised in fundamentalism. And so I get a lot of comments that will say, like, well, you're stupid. You should have known better.

Everyone knows MLMs are a scam. You asked for this. And it's like, I didn't know it was a scam.

And I was raised, in fundamentalism, to not question anything because you have to take everything on faith. And if you question something, well, then you're questioning God and you basically need to go and get right with God. [LAUGHS] So for me to just dive right into the MLM industry, it felt like I had that community back that I had missed from being raised in church and having that huge core community that I was with two to three times a week. And I missed that.

And I just remember thinking, like, oh my gosh, this feels like church without the religion. It's awesome. But I noticed that there were lots and lots of women who were very religious, very active in their churches, their megachurches.

So there seems to be that theme. Now, I've also been asked-- because I'm a woman of color, I've been asked, do you find that MLMs discriminate because-- well, I had one person say, why are they so white? [LAUGHS] And I said, well, here's the thing. Yeah, sure, you might see a lot of white people in them, sure.

But MLMs are equal opportunity. They want everyone. If they could sign up your dog, they would.

They want to exploit as many people as possible. I'm not talking about the distributors. I'm talking about the industry and the CEOs of these companies.

So I can only speak for myself. I didn't really experience much discrimination in the MLM world. Now, I have seen some people say, don't recruit that certain race.

Don't recruit them because they won't pay anything. They won't put money forward. So there's a couple of things like that.

But they're sneaky. They will take everybody. So you might experience some microaggressions or something like that, But.

They will take anybody and everybody. And they love people with large networks. You know, it's funny you bring that up, because we-- I don't have the numbers on hand about the MLM industry, but we did, in a recent video, do a lot of research on the demographic breakdown of crypto, which we talk about a lot here, and its similarities to MLMs.

And actually, for as much as it has a stereotype of being a white male thing, it's actually fairly racially diverse. Proportionally, there's a higher representation amongst people of color in crypto than there are white people. Now, it is still quite male.

That's not an untrue assessment. But in the MLM world, I bet there are probably similar dynamics because A, as you say, they're reaching out to everyone, and they'll take who they can get. But also, if you're specifically reaching out to people who are economically distressed, who have reduced opportunities, well, obviously, people who are new to the country, have not had economic opportunities for generations, have been historically kept out of a lot of programs, what have you, that's going to be a huge part of the most vulnerable targets.

And notably, where we're seeing a lot of growth now in the industry is specifically targeting the Spanish-speaking/Latino community. And I do think that there's something, really, to be said for how the language of inclusion, diversity, showing these stats that show how many non-white people you have in your organizations, how they can be sort of twisted and used almost as evidence of this company being better than other companies. But really I think what it boils down to-- and I think especially we can say it's the case in crypto just preying on people who have, for one reason or another, quite a bit less opportunity.

Oh, absolutely. You're not going to find somebody who's doing well. Like I said, in an MLM, it's just not going to happen.

Unless they were paid by the MLM, unless they were endorsed to be their speaker. Which AdvoCare, before they were shut down by the FTC, they did recruit professional athletes as their spokespeople. And when an MLM company does that, it's even more insidious, because then you have all of the distributors saying, look at my product.

This is used by so-and-so in the NFL. This is used by such-and-such athlete. This is why it's so amazing.

So it makes it more insidious just like that. I mean, most of the viewers/listeners will know I'm a big watcher of the TV station Bravo and a lot of their offerings. I'm a big Real Housewives fan, among other things.

And a lot of women in that universe, whether current or former Housewives or family members that we've seen on the show, a lot of them are doing MLM stuff, either themselves having an MLM or endorsing MLMs. And I think it's an often-- I think, often, people wonder, when they look at these things-- and you can see it as well with even more sort of, quote unquote, "mainstream" celebrities and influencers marketing things that are probably not MLMs but are very shady direct-to-consumer companies, like all of the waist trainers, and flat-tummy teas, and things like that. There's often a feeling of, why do these people do this?

They have money. But I'm sort of getting, from what you're saying, that they're probably being given quite a lot more money than we think they are because they're being used not to sell product but to legitimize the product. Mm-hmm.

Absolutely. And they have a built-in network through their following. I mean, these Real Housewives have millions of followers.

And so it's so simple to say, hey, this is what I use. I love it. And here's the link if you want to try it.

Boom. Tori Spelling is all about her MLM. She's constantly sending out emails.

I know because I had signed up because I wanted to do a video on her eventually. I mean, she's all about it. And I think that what we see on social media is one thing.

And we know it's not real life. And I really don't think that these Real Housewives and these women who are doing these-- these successful women that you see on TV who are doing these MLM companies, I think that there might be financial struggles, behind the scenes, that we don't see. Because to do this and to sell it and be a part of it, there's an act of desperation in it, because you, as a person, are desperate or you wouldn't do it in the first place.

And usually, I've always said it's one of three things why people join. It's out of financial desperation. It's because of community desperation.

They are just dying for a community and a support system, which is why a lot of housewives join. Housewives also have larger networks if they're more active in their community with other housewives. And the third would be because they really like the product and they want the discount on it, which you get when you sign up.

You can't sign up for the discount on a product without entering your Social Security number because you are signing up as a distributor, basically. So we were told like, oh, just tell them they just can sign up for the discount, yada yada yada. But they were signing up as a distributor, and then you are taught to slowly work on them, over time, to get them over to the recruiting side to where they want to make a business from this.

That is so insidious to tell people to sign up just to get a discount on the product. It's the only way you can. I mean, I think that it's pretty disgusting that these are so prevalent.

These MLM companies are so prevalent here in the United States. Because in other developed countries, they don't thrive how they do here. There's a lot of desperation here.

We have no social safety nets. People are desperate for so many things. And other countries, some of them even banned them from coming into their countries because they know that they prey on their citizens.

Well, speak on that, first of all, because I do think that there's something so just dystopian about the extent to which this appeals to people, especially mothers. I think there is-- what it says about our society and how we take care of mothers that these are as popular and as prevalent as they are, we really need to reckon with ourselves that this is a thing, because that is truly unforgivable. But one thing that I wanted to ask you about, because I think it's kind of an under-explored aspect of the phenomenon, obviously, first and foremost, as you've talked about, we're talking about economic desperation and we're talking about a lack of opportunity, we're talking about people who have often been raised to think in a very unquestioning way.

But there's also, I think-- obviously there's the sort of friend and social network aspect, but there's also, I think, a huge aspirational aspect to a lot of this, especially when you're talking about the beauty stuff, the fitness stuff. And as you've mentioned, you're a hairstylist, you're an esthetician. You obviously are very put together from that perspective, and you came from that background, so that was easier for you.

But like when people watch the LuLaRich documentary, for example, and you see how so much of rising within the company seemed tied to projecting a specific image, visually, down to the weight loss surgeries and having real strong sort of-- I guess they can't outright require it, but a huge level of pressure about conforming in that respect. And especially, I mean, it's so dark, but in a lot of cases, we're talking about new moms who are probably just trying to get back to normal, let alone lose a bunch of weight. So is that something that you experienced?

Did you feel that the sort of beauty aspiration aspect, all of that-- and I mean, not for nothing, but you were marketing something that's probably, primarily, a weight loss product. So that obviously adds a layer of pressure as far as the image you're projecting. But can you talk about that aspect of it in particular. [HUFFS] It's so stressful.

There is so much pressure. And I was in-- so my first company, the fitness company, that was not a company where you buy all the product, and have inventory, and then sell from your surplus. That was just send them your link.

You had to order your product every month to stay active. Every MLM company, you have to order product, every single month, to stay active or you don't get paid. But so you just send them your link, and then they can buy whatever they want.

It's shipped to them. My last company was the kind where you had inventory and you prepurchased it. And I see, in the MLM industry, a lot of people will say, oh, we don't have any inventory.

We're not like those other companies. We're better. No, no, no, no, no.

They are both equally stressful. There is so much pressure-- maybe in different ways, but they are both very toxic, both kinds. So there's a lot of pressure.

There a lot of pressure with how you look. There's a lot of pressure with showing your lifestyle, which I remember feeling uncomfortable with because I just-- I don't know, I didn't grow up in that-- I don't come from wealth, and I didn't-- we were taught, the meek shall inherit the Earth in church. But they were not like these megachurches with the pastors rolling up in Rolls-Royces. [LAUGHS] It was not like that at all.

So there was a lot of pressure there. That's not something you want to do. There's a lot of pressure with how you look.

A lot of people will put money on credit cards to buy the clothes, get the hair done, get the nails, do whatever it is, just to project this image, or just to buy things to show this image, to project this image online. Then, when you have the companies where are you frontload inventory-- you're taught to frontload, which is, basically, you buy a ton of product so you have it in stock to sell. And when you're like, ooh, well, I don't know about that.

I don't know if I'm going to sell it all, so I'd kind of like to wait, first get the orders, and then buy the product, you're taught, well, you can do that, but you can't really sell from an empty wagon. And people are more likely to purchase something immediately if you have it than if they have to wait. So there's a lot of pressure to frontload and buy a lot of product to have in inventory.

And people go into deep debt with that. Now, I'm sorry, this is just like a fun question, but I have to ask, did you ever go to any of the cruises or things like that? [SIGHS] Yeah. So in my first company-- I mean, they keep you busy.

So you have a lot of events throughout the year, small ones, and then, annually, you have the conference. And sometimes this can happen twice a year, depending on your rank, or even more. But the big annual conference is where everyone goes to-- they're always like, you have to get your people there.

You have to be there. And it's basically a megachurch conference. Like if you watch any of the old Hillsong documentaries, it's like that, but without the religion.

Well, some of them incorporate religion. But it's insane. There's so much stimulation.

There's lights flashing everywhere. They hire entertainers. Some have hired Cirque du Soleil.

They hire motivational speakers like Gary V. or Rachel Hollis. And I mean, the whole-- I know-- the whole weekend is just to pump you up. And it's all emotional hype.

That's all it is. And you are constantly built up, over and over and over and over again, on the emotional hype. Because if they sat you down with numbers and a spreadsheet, you would be like, oh [BLEEP],, I'm losing money fast.

I can't do this. So it's all about the emotions. And I mean, people are crying at these conferences.

Because you're taught to write down your goals, and then raise your hand if you feel this way, stand up if you've been through this. I mean, it's like church. It's definitely like a cult.

And then each company has the same type of conference. So I did go to the conferences, which you pay for. Everyone pays for the conferences.

Now, the trips-- I did earn the trips, and I went on those. And I always tell my husband-- we weren't married at the time-- but it was really funny, because it was like 2014, I think it was, that I earned my first trip. And I went.

And I had taken my boyfriend at the time, and I was so excited because I had not been able to afford a vacation in years. And so I was like, oh my gosh, this is so exciting. We went somewhere in, like, Mexico.

And we were all in a resort. And they had conferences, all day long, during the days of the trip. And I remember people who had been in the company longer than me were like, hey, Josie, aren't you going to the conference?

And I'm like, no, I'm going on an excursion. Bye. I'm on vacation, right?

I learned, pretty quickly, by the next trip, that you don't miss those conferences. You go. Oh my God.

Well, you did right to just exploit it for the actual vacation aspect the first time. That was a good move. You know what's funny?

I've never been-- I was like not raised in that type of-- from a long generation of Catholics on both sides. They do not get down with the sort of like yelling and screaming and high-fiving and motivational speaking. It's quite boring and quite stoic.

So I never had that experience. And I very much have never been in a world like that. And I obviously was never involved in an MLM, but I've been to some conferences and events through the financial world, which, I was naive, at first, to the extent to which the evangelical world is really tied up with that in a lot of ways.

What? What'd you say? I said, Dave Ramsey.

I've never heard of that man in my life. Who is that? He sounds like a great guy.

Anyway, but so we have been to some conferences where there was a lot of that environment happening. And I'll never forget the first time that we saw a speaker that is kind of what you're describing. And it was some of the ladies from our company who are similarly not steeped in that world.

And it was like the guy in a three-piece suit, wandered around the stage, yelling, asking to stand up. He's mopping his forehead sweat. It seemed like he was about to break into song, like true evangelical-type motivational speaking, whatever.

And by the way, that man-- I will not get into details here-- has since completely left the company in extreme scandal. So that tracks. But suffice to say, I was like looking around me.

And there were a lot of people who were-- they were getting their life. They were crying like you said. They were, like, convulse-- not convulsing.

It wasn't like a Pentecostal church. But they were really, really into it. And I'll never forget, we were all looking at each other, and we were like, what the hell is this?

This is so crazy. But it does really-- I thought about it a lot after we went there, because similarly, in our industry, there are some outright MLMs, but there's also just a lot of really shady affiliate marketing. There's a lot of similar tactics and structures, and also, similarly, a ton of people who come from these specific backgrounds you're talking about.

And it really occurred to me, in that moment, how much, if that was sort of what you were raised on, that connects with people in a way that I think almost no other aspect of American culture outside of the church probably does. Oh, absolutely, absolutely. I don't know if you've seen the documentary Jesus Camp.

One of my all-time favorites. Continue. So I watched that, and I was like, oh my god.

That's how I was raised. And that part of that was actually filmed 30 miles away from where I grew up. [GASPS] Yeah. I was raised on that steady diet of, oh my god, yes, crying in church, being slain in the spirit, falling back.

So when you believe in-- because MLM companies always hide behind a mission. There's always a mission they hide behind. So in the fitness company, it was, oh, we're helping destroy obesity.

We're helping people get healthy and live better lives, healthier lives. We help people. And then, in the cosmetic industry, it was like, we make people feel better about themselves.

We make women feel good. We give them their confidence back. And so you're always heard, well, don't you want to help people?

Because especially if somebody comes to you and they're like, hey, I'm losing money on this, you got to be like, oh, well, don't be negative. You need to go back and write down your goals again, you need to look at them, and you need to work harder, but you have to think positively. And when you believe in it, when you're brainwashed by it and just taken aback by it all, and you're excited about your goals, and you think that it's possible, it's fun.

It's a lot of fun. I say that all the time. People wouldn't join these things if it was miserable from the get-go.

But you don't realize that you're the frog in the pot of water that's being boiled, slowly, until it's too late. And that's when you're like, what did I get myself into? How do I get out of this?

Who can I talk to? You can't talk to anybody in there because they'll look at you like a negative person. There's so much toxic positivity.

You have to stay positive at all times. Any cognitive dissonance you have, have to push it aside. And then you can't talk to your family and friends on the outside because you've just been telling them what a great opportunity this is and that they should join you.

So you're stuck. And you feel so alone. It's the isolation that's really hard.

And anyone who leaves a cult, there's so much secrecy, there's so much isolation, and there's so much black-and-white thinking and shunning that it's traumatic. It is traumatic when you leave. Now, some people who left the MLM industry, they might be like, well, I didn't experience that.

I got in, I sold a few things, and I got out. Big whoop. But there are many stories of men and women who are still dealing with the fallout of it.

When you talk about cognitive dissonance, nothing, for me, typifies it more than the fact that Elisabeth Moss stars in The Handmaid's Tale. Like, girl, you are, like, one of the top-ranked Scientologists, and as recently as a couple of weeks ago were in an interview talking about how great it is, and you're starring in, effectively, one of the most famous stories ever, of, essentially, a religious cult. Like, what is happening?

I know. I know. I had already told my friend, recently, I was like, I don't think I'm going to be able to watch the next season of THT because I feel like the US is already headed there, and I'm extremely freaked out.

But before that, a year before, is when I found out she was a Scientologist. And I just was like, oh no. Like, what?

I mean, part of what I think is so scary about MLMs in particular-- and again, I'm going to just lump crypto in with this, because it's the same stuff in a different name, essentially. It all boils down to taking people who have very few options and giving them bad ones, essentially. I think what's so scary about it in a lot of ways is, like you said, we have, basically, no social safety net.

Things are not trending in a great direction, politically, for a lot of people. And it does feel like, increasingly, there are fewer and fewer things to either prevent people from turning to it or that feel like they're a better opportunity or a better idea. In a sort of economic context that's increasingly volatile and scary, it becomes more and more maybe not logical but at least comprehensible, on some level, to just be like, well, screw it.

I'm just going to roll the dice with this then. You know? Absolutely.

And there's a lot of aspects about it that you-- not to get into politics, but I mean, this is typical in any cult. The black-and-white thinking, where it's us against them, that mentality can be so addictive. Because then you have this feeling of, like, oh, well, they're against me.

I don't need them. You're taught, in these MLM companies, to cut off anybody who doesn't support you in your business. And you're told that if anybody comes to you, whether it's your mom, whether it's your best friend, whoever, your sister, and they're like, hey, I found some info about this company you joined, you might want to look at this, anything critical of it, you have to look the other way.

And you're taught to cut those people off because they're toxic, and they will affect you and your business, and they're just jealous of your dreams and your motivation and your ambition, and you don't need them anyway because you have this support system here. [HUFFS] Well, on that incredibly depressing note, before I get to our rapid-fire, I just wanted to ask if you have any last sort of pieces of practical advice for anyone who is either-- and these could be different, but either considering what appears to be an MLM or in the early stages. So I get a lot of questions. People ask, how do you get somebody out?

And it's extremely hard to get somebody out of a cult, for many reasons, but also because they're expecting you. They have been warned, on the inside, that dissenters are going to come. They're going to question what you're doing.

And they're doing it because they're jealous, because they're toxic, because they're negative, because they don't want you to succeed. So be ready for it, yada, yada. So they're expecting it.

So you have to be very careful with how you approach them. I don't necessarily-- I tell people, you don't really need to send people my videos or other anti-MLM videos. Just start with a conversation, and ask them if they know what toxic positivity is, and then go from there.

Because people can only pretend to be happy and positive and joyful and suppress anger and sadness and all the range of human emotions we have for so long before it gets to them. I mean, I remember my doctor was like, your blood pressure is high. We need to put you on medicine.

I had just lost 50 pounds and five sizes, and I thought I was the healthiest I had ever been. And I looked at him, and I was like, what do you mean? I'm happy.

I'm not stressed. And he's like, your blood pressure is high. We need to put you on medicine.

I'm like, I don't understand. I'm happy. People can only uphold that level for so long before it comes crashing down.

And when it does, it's very hard to talk about it because you feel so ashamed about what you've been a part of, what you've done, who you've tried to recruit. And then maybe the sunk cost fallacy, where you thought you should keep going because you've already invested so much in it. So just starting that conversation, like, hey, do you know what toxic positivity is, and kind of educate them on that.

It's about the education. It's about the awareness, very gently. And also, for people who haven't been in it or they know somebody in it, I'm sure you are annoyed to hell and back by their posts [LAUGHS] and their constantly being like, join my team, join my team.

Show them grace. Because behind the scenes, it is not what it appears to be. And like I said, nobody joins an MLM when they're doing well.

Well said. So as promised, we just have a few fun non-MLM-related-- or perhaps they will end up being-- rapid-fire questions that we love to ask. So I'm going to go grab those.

What is the big financial secret of your industry? And actually, let's go back to MLMs and say the MLM industry. OK.

I was like, YouTube? I don't know. [LAUGHS] The big financial secret is that everyone is struggling behind the scenes, and you're really not supposed to talk numbers. You're just supposed to recruit, recruit, recruit.

Because at the end of the day, recruiting is what brings in the numbers to your team and financially. And they use things like FORM-- stands for an acronym for Family, Occupation, Recreation, and Message. And that is you're supposed to friend-request somebody, message them, and ask them about their family, ask them about their occupation, ask them about their hobbies, AKA, recreation.

And then, after you get to know them and build this rapport, then you're supposed to dive in, and message them, and recruit them, ask them to join this opportunity. So it's all about the recruitment. That's the big financial secret, which could also be called grooming, but that's the big financial secret in the industry.

Ugh. Man, don't you just wish you could just prevent those messages from being sent, like have a blocker on all these message apps? Mm-hmm.

OK. What do you invest in versus what are you cheap about? Oh boy.

You know, now, after going through what I did, and walking away, and I felt like I lost everything, and I walked away with debt, and it was just a better deal, I am now much more financially frugal. So I really invest in just building my savings. I've been paying off debt the last few years and building my savings.

That's what I invest in. [SIGHS] Yeah. And I'm frugal with, I would say, pretty much everything. I do my own nails.

My eyelashes-- my fake eyelashes-- I'll wear them like 20 times. [LAUGHS] Wait, are those the ones you do yourself, at home? Like the glue? Uh huh, yeah, just the strip with the glue, yeah.

So I do my own hair. I'm very, very frugal now with how I spend my money, because I know it can be gone like that. Man, I feel like, I can't mess with the glue.

Do you have a review of those magnet ones? Do they work? You know, I've heard that they're great, but I'm too scared to put magnets that close to my eye.

I know. I know. OK, well, I was going to say, you definitely invest in your lashes, because they're looking great.

Thanks. OK, what has been your single best investment, and why? I mean, probably your channel, right?

Sorry. [LAUGHS] Probably my channel? Yeah, sure. I mean, honestly, I think my single best investment is probably just owning up to the problems that I originally had and created with the MLM industry, and putting that out there, and just being real about it, and not trying to hide behind something or not trying to talk about it, and just try and shove it under the rug.

Because until you can admit one fault, you can't admit a lot of others. And it's hard-- I used to hide from my financial difficulties. And now it's like, no, you got to face things head on.

So really just owning up and facing things head on is probably my best investment. And obviously, yeah, my YouTube channel, coming out of the anti-MLM closet, like I call it, which was really hard to do. I received so much love from people that I never expected to.

That was really great. I love that. That's the first time we've had someone say that their best investment was being honest about something, but I think that's probably more true than a lot of people think in terms of the opportunities that it provides them.

What has been your biggest money mistake, and why? [LAUGHS] Not paying quarterly taxes and getting fined by the IRS, I would say, for sure. Yeah. Hard to do worse than that.

OK, what is your biggest current money insecurity? Oh Lord. That it could all be gone again, very quickly, I would say.

And it can, because here, if you have one, even, illness or disease, it can be wiped out very quickly. So it's that. I worry about retirement.

I'm always trying to strategize that way. Too true. What is the single financial habit that has helped you the most?

Writing everything down, honestly, just getting down to the basics. I have a little notebook. Write out our bills for the month, everything down to our Hulu subscription or whatever, and just looking at it, and being like, OK, this is what we have going out.

How much do we have coming in? We need to make sure we put this much away into savings or whatever. Really just getting down to the basics.

I love that. And then, lastly, when did you first feel successful? And what does that word mean to you? [LAUGHS] Oh, boy, that's something I still struggle with now.

Feeling successful-- I don't know. I think that success-- because I come from that hustle culture, having been in the MLM industry for almost six years, and I hustled until I dropped, and my entire life was work, work, work-- so success, to me-- I mean, sure, everyone needs money. I'm a big believer that, when people say, money isn't everything, well, then they've never been dirt poor.

So for me, yes, it's being financially successful, but it also is your quality of life. And we are not just made to work, work, work. And so I completely avoid hustle culture now.

I try and have that balance where I play, or have fun, or even just veg out on the couch and not work, or think about work, or talk about work, or anything like that. I hate when you meet somebody new and they say, what do you do? And I'm like, can we not talk about that?

What do I like? What do I love? Things like that.

Wonderful answer. Well, Josie, it has been such a pleasure to speak with you. Where can our audience go to see more of what you do?

Yeah, I'm on YouTube as Not The Good Girl, because I decided I wasn't going to be quiet anymore, and so I made my channel named Not The Good Girl because I was going to speak out. [LAUGHS] And now I make documentaries on cults and scams. And I don't have social media-- no Facebook, Instagram, or Twitter, but just YouTube. Awesome.

That is aspirational, first of all. But I cannot wait to go watch a few of these little documentaries. That's my favorite genre.

So thank you guys so much for tuning in. And I will see you next week back here on Monday for an all new episode of The Financial Confessions. Bye. [MUSIC PLAYING]