E6 Multi-Level Marketing Madness

 How to Get Rich 

Season 1, Episode 6 

Multi-Level Marketing Madness

Ramit helps a couple who say they're financial opposites to plan for their wedding. Next, he broaches the topic of multilevel marketing with a client.

( pensive music playing ) 

Christian: My plan was not to leave it in DraftKings for long, but then it just kept going down and down and down and... 

What does that mean? You went from 100K... 

And now it's worth about $20,000. 

( dramatic sting ) 

Millie: I didn't even know that. 

You didn't know that till now? 

I didn't. 

Talk amongst yourselves. I wanna hear... 

Oh, this is not good. 

You never told me that. Why didn't you tell me that? 

Oh. 

Because I don't feel like... it's... it's something to worry about.

I just... I don't know why you never told me. 

( pensive music continues ) 

Millie: It's crazy that it took a TV show for me to find out that we lost $80,000. 

We were gonna purchase another property, and we were gonna have to put, like, 200,000 down. 

So just thinking about that number, where, like... we could have put that towards something... significant. 

( pensive music playing ) 

You've never really asked, "Oh, how are the investments going..." 

I should have asked, though, because you're usually, like, really open with what you're doing. And you've been quiet. 

I should've known.

Well, it's easy to talk about it when things are up. 

Millie: Uh-huh. 

I think we've just learned that when things go down, sometimes people get quiet about it. 

Yeah. 

Ramit: Okay. These gains are not sustainable. 

What Christian doesn't realize is that he's made money because of luck, not because of skill. 

And, as they say, when the tide goes out, you're gonna see who is swimming naked. 

What are your goals? What's your rich life? 

( Millie exhales ) 

So my main goal, my whole life, since I was a kid, is retire my mother.

My parents are immigrants, so I'm a first-generation American. 

Where'd they move from? 

Christian: Colombia. 

Okay. 

Christian: Late '80s. So, they didn't know the language. 

They were thinking of their kids. They weren't thinking about themselves. 

So there's nothing better than being able to retire my mother. 

That's pretty amazing.

I just want to build an empire. 

I want to be able to help his mom. 

We'd be able to help my parents. 

We'd build something for our future kids. 

That's what I want. 

Where did you get this from? 

When I started my network marketing business, they're very big on, like, mindset. 

That's where it all started. Just growing my mind and thinking more abundantly. 

I never even knew what that word meant... 

Yeah. 

...prior to, you know...

I'm surprised that you're in network marketing. 

Tell me about the business. 

Really? 

Why were you surprised? 

Uh, because your goal is to make money, and network marketing, usually people do not succeed in it. 

Millie: People have hit the million-dollar club. 

One of my mentors has done it. 

Yeah. 

So I just look at it, and I'm, like, okay, if she did it, I could do it. 

There's ten ranks in the company, and I've reached as high as the seventh. 

Ramit: Mm-hmm.

Um... And, when I got to that rank, I was, like, in the top .02% or something. 

I don't know how. 

How much money were you making at that time? 

My highest was 12,000 in a month. 

Ramit: How many months did you make that for? 

One. 

And then it just started going down. 

Then it was eight... 

And now? How much are you making? 

Two thousand-something? 

An MLM stands for multi-level marketing. 

Let's think of it like a shape. 

Let's say a pyramid. 

At the top, you have this person who's been recruited to be an entrepreneur. 

And they recruit five people underneath them. 

Those five people recruit five people beneath them, and so on and so forth. 

You can see why this eventually fails. 

Because eventually, you'd have to recruit the entire planet to keep growing. 

This is a waste of time. Don't do it. 

The way that you're approaching money reminds me of a slot machine. 

So, you know when you go to Vegas, and you pull that slot machine, and nine times out of ten, you lose money.

And then, one time, you make money. 

And then what do you tell yourself? 

"I did it." 

Yeah. 

So, I want to understand a little bit more about where are you coming from before I start telling you, here's six things to do. 

Okay. 

Ramit: How's that sound? 

Christian: Yeah. 

Okay.

I'm having an event. You should come. 

You're having a network marketing event? 

Millie: I am. 

I would love to come. 

I like Christian and Millie. They're in a good financial situation, but they're making some weird, knucklehead decisions. 

So, I think I can help them. 

The first thing with Christian is I want to help him make a plan to retire his mom. 

With Millie, the easiest way for her to build an empire is to get a job that pays her well and respects her. 

And, with both of them, no more gimmicks. 

No more individual stock purchases. No more DraftKings. No more MLMs. 

Just simple, low-cost, long-term investing. 

If they do that, they'll be in great shape. 

( upbeat music playing ) 

♪ Who's got flavor? ♪ 

♪ I do, I do... ♪ 

Ramit: Cool space. 

Drew: Yes. Oh, here. This my dream home. 

This is your dream home? ( chuckles )

Hold on. We lost a door. 

We'll go to Home Depot. 

Okay, dream is broken. 

I like the dumb junk. 

Oh, this is... Here. This goes with your coat. 

Ramit: Put it on. 

And your skin color. Va-va-voom. 

Now I'm in business. 

Drew: What would your drag name be? 

How do I pick a drag name? 

Could it be, like, Cass Money? 

I like the direction you're going in.

Yeah. 

Maybe your ideal song. 

I know my song already. "I Want It That Way" by Backstreet Boys. 

That's a good one. ( chuckles ) 

Whose show is this right now? This is crazy. 

( music crescendos ) 

Thank you. 

Ramit: My first meeting with Drew was emotional. 

He's feeling a lot of pressure because he's about to get married, but he's keeping financial secrets from his fiancé. 

I want him to start opening up. 

He's got to talk to Mikey about his finances before they get married. 

How are you feeling after we talked yesterday?

It was a lot. 

So what were you... What went through your head after I left? 

It was a little rough, but then it was also... It was exciting. 

It was, like, okay, hopefully, there's an answer. 

It was just kind of a lot to stew on and process, so... 

Ramit: I did give you some homework. 

The credit card. Did you call the credit card company? 

I did. Called once and then, you know... 

Okay. 

...when you try to do anything on the phone, it's a million different things. 

But then they're like, "Well, you could file a claim online." 

So I did it online.

I'm glad you found a way around it. And at least you have taken a step. 

The point is, you're starting to take control of your money, which is awesome. 

You know, one of the most important things in creating a rich life, you've got to be honest. 

Honest with yourself. Honest with the people around you. 

Yesterday we talked about hiding a little bit of what had gone on with the credit card. 

Why do I know more about your money than your fiancé does? 

'Cause you're not my partner. 

Yeah. ( chuckles )

That doesn't make sense, right? 

Because I'm gonna leave. 

I'm not gonna be here. 

And he's gonna be here for the rest of your life. 

You two are getting married. 

Yes, we are. 

In two weeks. 

You two are partners. You're gonna be financially tied together. 

Tied together in every way. 

I want you and Mikey to talk about this before you get married. 

( pensive music playing ) 

Everybody hears stories about people who got divorced because of money.

It starts five years before, ten years before, 30 years before, not being able to talk about money. 

So this is one of the most important conversations Drew and Mikey will ever have. 

You know, it seems like you're worried about this big blow-up. 

Yeah. 

But you're not actually worried about what is going to happen ten years into the future. 

I want him to know everything about your finances. Confront it head-on. 

Drew: What if I tell Mikey the truth, and he does decide it's not worth it and it's too much of a burden? 

Like, I... I lose the man I love. 

It is my absolute worst fear.

( dramatic swell ) 

( upbeat music playing ) 

Frank, how you doing? 

Where are you? Looks like a beautiful place. 

I am in Puerto Vallarta. 

Whoa! 

Well, I decided to have something for my birthday. It was two days ago. 

Oh, happy birthday! 

Thank you, yeah. 

Now, I'm curious, Frank. 

How are you paying for this trip? 

Why are you looking like that? It's your money. It's not mine. 

I put aside three... 3,000. 

3,000. 

Frank: And then we've been doing other excursions, and I've spent, like, over 1,000 additional dollars just being here, outside of what I've spent on the resort, so...

So, conservatively, say, when you add everything up, maybe 5,000 bucks. 

Would that be fair? 

Yeah. 

And that's my problem. 

I'd say I'm gonna spend... "Oh, I'm gonna spend $500," and I end up being like, "Oh, okay," which is 500 more. 

In the end, I had to go into my savings. 

Okay. What do you think about that? 

I'm leaving tomorrow. I ain't spending no more damn money. 

( Ramit chuckles ) 

In my head, I don't want to be in the point of, okay, I feel good that I can go on vacation and, you know, spend, spend, spend. 

I've never been able to do that, but what's gonna happen two years from now when I don't have that money?

But I just want to plan better for it. 

Making a plan ahead of time, it feels so good. 

You don't have to hope. 

"Even if I lose my job, I have this many months of buffer, and I have made a plan." 

I can help you do that. 

Yeah, I can't wait. 'Cause I'm quitting my job. 

You are? 

There's a lot of things happening for me, and I want to take advantage of them. 

To see what I've done with just the franknthecity stuff online... if I had more time to create content, I could make more money. 

I think, if I'm gonna do it, I should do it now. 

In going on The Circle, I knew that I was gonna gain followers.

That means I can ask for bigger checks when it comes to partnerships and collaborations with brands, which is ultimately what I want to be my key out of working a 9-to-5. 

I have a couple questions for you now about the finances. 

How much were you making at this full-time job? 

Uh, my checks, biweekly, were $2,196. 

So you're gonna lose 50 grand in income. 

Where are you gonna make that up? 

Franknthecity. 

I'm at 11,000 this year. 

So you made 11 grand so far, in four months. 

Okay, okay. 

So, yeah, that's possible you could be on track to make about that. 

I also do have another part-time job as well, so it's not like I'm not gonna have anything constant.

So I love that you're an entrepreneur. I love that you wanna bet on yourself. 

But I want to see a plan which shows me what you are currently spending today with your roughly $50,000 income, and then I want you to show me how you are going to spend your money once that $50,000 is gone. 

You told me you spend $1,000 a month on brunch. 

Do you think you can still do that? 

No, I can't. 

How much can you do it? 

Maybe twice a month. 

Nope. 

Once?

If that. 

Like, if you lose 50 grand, you can't be going to the same places you used to. 

You just can't. 

Yeah. 

Your business is gonna go up some months and down some months. 

So the trade-off with an entrepreneur is it's not as stable. That's fine. 

I can show you how to work around that irregular income. 

But I want to see your plan with what you are gonna change about your spending, okay? 

Okay. 

Frank's newfound fame from winning The Circle could be short-lived.

This is a huge gamble. 

Because he doesn't have a plan for how he's gonna function without his stable, full-time income. 

( upbeat music playing ) 

( horns honk ) 

Mom, this is your first time at an event. 

I know. 

Network marketing is basically a company. 

They sell a product, and they kind of get rid of that middleman, like, the store. 

It's just me using the products, genuinely talking about them, and, when somebody wants to buy them and try them, I get a commission from it. 

Then it's also bringing other people on with me that want to do the same thing. 

You build a team, and you sell the products. 

( clamoring ) 

( upbeat music playing ) 

Christian: Ramit's here. 

Millie: Hi, how are you? 

Ramit. Thanks for coming, man. 

Ramit: Good to see you, brother. 

Millie: Thanks for coming.

Thanks for having me. Whatever you need to do, do your thing. 

Yeah. 

I'm just here to watch. 

I'm ready. 

Ramit: Okay. 

Millie's smart. She's savvy. 

She could build something great for herself. 

But I'm totally skeptical of MLMs. 

Millie: Oh, guys, thank you guys for coming. 

I'm Millie, 29, um, from north New Jersey. 

We have 12 siblings in my family. 

My mom remarried. My dad remarried. 

And just coming from, like, a blended family, if... if you're familiar, you know that feeling of, like, I don't know, just, like, never really fitting in and, like, feeling a little left out. 

So, as, like, silly as it sounds, I feel like the business really changed, um, my mindset. 

I'd make vision boards, and I'm like, "I'm gonna qualify for the Cadillac, and I'm gonna quit my job, and I'm gonna qualify for the trips, and I'm gonna..." 

And, little by little, it all started happening. ( exhales ) 

I qualified for the trips. 

I qualified for the Cadillac that the company pays for. 

But anyway, a little bit about the business itself and what I do. 

It's basically just this. 

I use the products. 

I talk about the ones that I love. 

That's it. 

( all applauding ) 

So, I'll give you some samples. 

I know you guys have... Some of you haven't tried them. 

So I could give you some if you want to, um, take some with you. 

woman: That's cute. 

Okay, so tell me, what do you think about the overall network marketing business? 

Christian: So, it's not for everyone... 

Yeah. 

...but money talks, right?

So, when I saw the money amount coming in, and she's reached the seventh rank, the company pays for the Cadillac, I'm, like, this is absurd. 

Ramit: She got a Cadillac for free? 

Yep. So, it's under her name, but they send her a check every month for the car as long as she maintains the rank. 

So, if she doesn't hit that rank, then she's responsible for the payment for the four-year lease. 

Ah. It's under her name. 

They write her the check. What number does she need to hit? 

I don't know. 

That I've never asked. 

All right. Well, thanks for having me here. 

I have some more questions to ask, but, uh, very interesting comments. 

Excuse me. 

( pensive music playing ) 

( indistinct chatter ) 

producer: So, this Cadillac...

Ramit: Oh my God. 

They give her the car, but they saddle her with the four-year lease. 

That costs her tens of thousands of dollars. 

It's not a gift. It's a trap. 

Millie: We'll wait. 

Ramit: Can I grab you? 

Millie: Yes, of course, yeah. 

Ramit: I have so many questions. 

Tell me. 

So, how many of these did you used to do? 

A lot. 

Uh, we got to a point, like, when business was really booming... 

Yeah. 

...that we were doing at least one a week. 

"We" means... Me and my team. 

What is the team? What is that? 

So, anyone that wants to do the business with me... Yeah. ...they'll join my team. 

I see. And how many are on your team?

So, there was almost 500 people on my team. 

What? Wait, what? 

Yeah. 

So, when you made that 12K, where did the 12K primarily come from? 

Was it from selling products, or was it from your team... 

It was the team sales. 

The most I've ever sold was probably a little over $2,000 myself, in a month. 

Yeah. Do you still have 500 people on your team? 

No. 

What is it now? 

It's, like, 150. 

Wait. So you went from 500 people, making 12K, and then they slowly started dropping off down to now, which is... 

150. Yeah. 

I have another question. 

I... I've been thinking about this. 

I have to understand it. The Cadillac. 

How old are you again? 

Twenty-nine.

Would you buy a Cadillac on your own? 

No, honestly. 

How'd it happen? Is it when you were at the peak? 

Yeah. 

So it's an email, and they tell me, "Hey, you qualified." 

"You can go choose a white Cadillac as long as it's less than four years old, and as long as you continue hitting your rank, we continue sending you a check for it." 

And so, what did you do? 

I got the car. 

Okay. 

I was so in the moment. 

Because it was such an accomplishment. 

Yeah. 

Like, "I've been saying I'm gonna do this. And I just did it." 

What's the monthly payment? 

It's 660, and they pay me 500 for it. 

So, theoretically, if you stay at this level, they'll pay the rest of your Cadillac. 

Yep.

If you drop ( rank) more, you'll have to pay $660 a month. 

Mm-hmm. 

Can you afford it? 

It's a little tight. ( chuckles ) 

But, yeah. MLMs are specifically targeted at vulnerable parts of society. 

They go after stay-at-home moms who want to make an income on the side. 

They make huge promises of all the money you can make passively working from home. 

But what they fail to tell you is that 99-plus percent of people will not make money. 

( upbeat music playing )

Sara and Reggie. 

What are we gonna find here? Let's take a look. 

Let's break it down. 

Let's start with Sara. Let's see what she's got. 

She's got about 2,100 bucks in her checking account. Okay. 

It looks like she basically spends exactly what she makes. 

So she made 5,700 bucks. 

She spent just over 5,700 bucks. 

Let's look at her credit card. 

So looking at this, the previous month, she had $7,700 on her credit card. 

And she paid $1,500 towards that. 

So she's not paying enough to pay off her credit card. 

I can see that in just a couple of months, she's paid 100 bucks in interest. 

This is the wrong direction that we want. 

All right, Reggie. Let's take a look. 

So, whoa! 

Okay, so Reggie's got all these different files. 

He clearly wanted to flex. 

PowerPoints. Oh my God. He included a year in review. 

This is my kind of guy. All right. We're gonna be friends. 

Okay, so he's got a lot of money here in savings. 

$17,000. 

401(k), he's got $100,000.

There's money being made here. 

Year in review. Okay. Wow, look at this.

"Your Roadmap to Success." 

This is making me suspicious. 

It's almost a little too buttoned up.   What's going on here? 

Reggie. "Where are we today?" 

"Credit card debt, $5,000." 

"30th birthday fund." 

He's filled up his fund for $3,000. Very nice. 

Sara. 

Emergency savings, nothing. 

Emergency car fund, nothing. 

She has some work to do. 

Reggie's got a vision, and he's started saving towards it. 

Sara sent me some basic information about her credit card debt. 

I suspect she doesn't love talking about money as much as Reggie, who sent me the whole kitchen sink, the budget, the vision, the PowerPoint, the 401(k). 

Couple things that set off some red flags. 

I can see that there's a lot of technical work that's gone into this budget that he sent me, and I think that's awesome. 

A lot of people fall in love with it. They go, "Oh, cell C2 never talked back to me. So logical." 

And, uh, listen, I enjoy the love of a spreadsheet as much as anybody, but at a certain point, you gotta get up from your computer and live your life outside the spreadsheet. 

( upbeat music playing ) 

I'm Sara. 

And I'm Reggie. 

And we're recently engaged.

Sara: Yes. 

Yes! 

( uplifting music playing ) 

Sara: We actually met at a yogurt shop. 

I was his boss back then. 

Still my boss. I love you. 

I love you. 

( upbeat music playing ) 

Ramit: On paper, Sara and Reggie appear to be financial opposites, which is actually really common when I work with couples.

Reggie? 

That's me. 

How you doing? 

Oh man. Nice to meet you. 

Nice to meet you. 

Come on in. 

What I'm curious about is, how do they talk about money together? 

And what is that dynamic in their relationship? 

Before we get into numbers and math and all that stuff, I'm just curious how you both think about money.

I'm impressed by your spreadsheet. 

Reggie: Are you? 

Very. 

I mean, it's boring. ( chuckles ) 

It's maybe boring to other people. 

To me, I was like, "Man, I could hang out with this guy. I get it." 

Buddies. ( chuckles ) 

You know, like, I totally get the vision. 

Yeah. 

Yeah. 

Is this torture for you right now? 

Sara chuckles: No.

She's squirming. 

This is good 'cause I know I need to work on it, but, like, I'm not an analytical person like that. 

I don't want to be stressed when I talk about money. 

Totally. 

And what about you? 

What comes to mind when you think of money? 

Um, I think it's a motivator. 

But also, is it too much like, am I not enjoying today because I'm so worried about tomorrow? 

And what would you say is the main money challenge between the two of you? 

I sometimes think that she spends too much, or doesn't save enough, or isn't disciplined enough, or maybe doesn't sacrifice as much as maybe I do. 

Sara: I do spend a lot. 

I think it's hard for me to save 'cause I'm also a freelancer. 

Um, and sometimes, if I do make that extra income, what do I do with it?

Like, I'm just not as organized with it. 

I like to shop. I like to go to fancy dinners. 

And I have expensive taste. 

Reggie: I am 100% a budget nerd. 

I think about my finances every day. 

The numbers matter, always. 

The decisions I make today decide the kind of vacation I can take my kid on when I'm 40. 

So, I think I've just always learned that sometimes the best way to do that is to kind of micromanage. 

No one likes to be micromanaged. 

So it's just having that... 

Right. 

Having that freedom to be able to save or spend your money how you want, and still reach the same goals. I think that's important to me. 

He definitely saves a lot. 

And he thinks about saving a lot and not spending. 

Sometimes, if I'm like, "Let's go out to eat," or "Let's do this," his first thought is the cost of it and, "Oh, we just have food at home." 

Counting every single cent... ( chuckles ) ...to the point where, if I have the coffee machine on, he's like, "This is gonna be the electricity bill." 

It is. It is. 

We had a whole fight about the coffee machine. 

Whole fight. Whole thing. 

I turn it off now. 

You do turn it off now. 

Thank you. You do good. You do good. 

( Sara chuckles ) 

I think my role a lot of times is, she's the dreamer and I have to rein her back in and be like, "I would love to do that, don't get me wrong, but that would crush us later." 

And so maybe we look at these other things. 

That's kind of the dynamic we have. 

The dreamer and... 

How would you describe yourself in that scenario? 

The dream crusher. No, I'm kidding. 

( all laugh ) 

The bad guy. ( laughs ) 

And that puts you in a weird dynamic, doesn't it? 

Let's try to flip that. 

I would love to bring ideas to him and for him to be, like, "Yes, let's do this and something else." 

Ramit: Mmm. "Yes, and..." 

Sara: Yeah. 

Describe what Reggie's title would be. 

Yeah. I don't know. Like, partner or equal partner. I feel... 

Reggie: Co-team captains. 

Yeah. I like that. 

Reggie: Co-pilots. 

Yep. 

Hearing that I'm kind of the decider of things and the dream crusher, while, you know, it's funny as a joke, there's some truth in that, right? 

So I feel ashamed a little bit, I think. 

And it kind of wakes me up to a point of, what can we do to change that? 

Let's talk about some of the expectations around your wedding. 

Any sense of when the wedding is gonna be?

Ideally, spring or summer 2023. 

Ramit: Okay. 

So about a year from now. 

Mm-hmm. And what does it look like? 

We were thinking destination, so maybe somewhere in Europe. 

How many people? 

I think, for me, maybe, like, a 40, 50-person wedding would be ideal. 

Reggie: I'd love to have closer to, like, 200, maybe. 

You want more people? 

I think it would be really difficult for me to cut down. 

I'd be leaving out some people that I'd really regret not having there. 

That's something I don't want to compromise on sometimes. 

Reggie: Going into the wedding, there's a big cultural expectation. 

The typical kind of Filipino wedding is a big celebration. 

You have to invite everyone and their kids. 

They all got to be there. They all have to come celebrate. 

Probably would have to have fireworks. 

( both chuckle ) 

That's an expensive wedding, for sure. 

More than we want to pay. That's... 

More than we can pay. ( chuckles ) 

More than we can pay, yeah. 

Ramit: So, what's the budget for the wedding? 

We've come up with, like, between 35 and 40 grand, I thought, was that conversation. 

The wedding costs, what he's quoted at 40K, is just for the wedding. 

And I've said we do also have the honeymoon. 

We have the engagement party. 

We have the bridal... the bachelor and bachelorette parties. 

So, like... How much does all that cost if you guess?

How much does all that cost if you guess? 

I would guess at least 10,000, like... 

That's it? Only 10,000? Come on. 

Sara: Okay, maybe a bit more, but, like, yeah, it is a high number. 

Was the dress in there as well? 

Um... 

I think that's just part of, like, wedding. 

Yeah, maybe that'd... that'd be part of the wedding budget, I guess. Yeah. 

I've been down the aisle with a large family wedding, and I've got the spreadsheets to prove it. 

Take whatever number you think you're gonna spend, and you can safely double it, and you might be in the neighborhood of how much it'll cost. 

And where would the money be coming from? 

From us, and then some of it from our parents. 

Yeah. I think... Well, I think that $40,000 number is us. 

Like, solely us. 

We've gone under this assumption of, like, if they help us, they help us, but I'm not... I don't want to budget like we're gonna get it. 

I think the Filipino culture of weddings is that the wedding is for your family and friends. 

There is an expectation on the family side of, like, this is their chance to get together and see everyone and party. 

Parents brag with their kids, right? 

Oh yeah. 

You hate that part. 

I hate that part. 

But it's... it's rooted deep in there. 

They want to show that their lineage, or family, is successful. 

A big, extravagant wedding. 

"We did it. We made it. We came here and did it." 

So I think that that's another part of the expectation.

And what happens if you can't have the wedding that you both envision? 

I feel like it's almost embarrassing, a little bit. 

Like, "Where did you guys go wrong?" 

"What else did you decide to do that you didn't get to where you wanted to be?" 

Ramit: Okay. 

"Was it worth it, at this point?" 

Ramit: And what if you did? 

What if this was on-budget, a beautiful wedding? 

What would that feel like? 

Beautiful. ( chuckles ) 

And if you can do it for a pretty big-budget event like this, then you can do it for anything. 

Yeah. 

Yeah.

Ramit: Here's my plan of action for Reggie and Sara. 

First, they need to collect real numbers for their wedding. 

Once they have those numbers, I can help them start designing their rich life as co-pilots. 

What we get from this, and we applied it, and we stuck to it, and it worked, that opens the door for everything after this. 

Yeah. 

( "Hit Me Up" by Peter Higher playing ) 

Ramit: I saw Millie at her MLM event. I want to talk to her about considering a different use of her time, but it's gonna be tricky. 

Hi. How are you? 

Hey, how you doing? 

Millie: Nice to see you. 

Ramit: Thanks for having me over again. 

When you tell someone in an MLM that it might not be the best decision, sometimes they get defensive. 

So, can I be open with you about... Okay. 

A hundred percent. ( sighs ) 

I loved your presentation style. 

But, as I started to think about it, I got nervous. 

Because there are a lot of things that were red flags for me. 

( pensive music playing ) 

( Ramit exhales )

I saw the membership recruiting, which made me really nervous. 

Those people tend to leave really quickly. 

So then I asked you, like, "What's up with those 500 people?" 

And then you told me most of them had left. 

Then you told me about the Cadillac. 

What if you don't keep your rank? 

It's your lease. 

So you have to pay for it. 

Yeah. 

Has that happened before? 

It has. 

Wait, how many times? 

Like, eight. 

Wait, what? 

Millie chuckles: In the pa... Yeah. 

Okay, so hold on. 

Yeah. 

Do you know what the success rate for people in multi-level marketing is? 

Probably, like, 3%. 

Maybe even less than 1%. 

( dramatic swell ) 

MLMs are a trap. 

( pensive music playing ) 

There's a subtle difference between a pyramid scheme and network marketing. 

Pyramid schemes are based on recruiting other people alone. 

Network marketing has tangible products. 

Pyramid schemes are illegal. 

Network marketing is not. 

And the distinction is as thin as a razor's edge. 

You did 12K in a month.

I don't want to take away from that. It's very impressive. 

But if you had never succeeded, and we were having this conversation, you'd be like, "Yeah, this sucks. I don't wanna do this anymore. I'm done." 

But you did succeed one month. 

And you post about it on social media. 

And it's become part of your identity. 

So, to take all that away, it's not just closing down a little business. 

What is it really? 

It, like, hurts my ego a little bit. 

I'm a little bit, like, embarrassed about it too. 

'Cause, like you said, I talk about it, and I, like... not to take away from it, I did do that. 

But I also went backwards. 

And how long has the business been going down for? 

About a year.

How does that feel? A year. 

I definitely think I'm just not putting enough effort. 

Ah! So you believe if you worked harder, then you would get those results. 

Mm-hmm. Take a look at me. 

If I work harder, I can be in the NFL. 

Tell the truth. It's okay. 

No. 

What?! How could you say that? 

( gasps ) How could you crush my dreams? 

You don't think, if I trained for another year, that I could make it to the NFL? 

Probably not. 

Probably not.

And, if you try harder, will you succeed where 99-plus percent of people fail? 

I don't know. You never know. 

Okay. Let me ask it a different way. 

Do you think your best use of time and energy is to focus it on this MLM? 

Or do you think maybe there's another possibility that might get you to your goals faster? 

I hear you. 

Yeah, I do agree with that. 

Everyone has doubted the network marketing stuff. 

Christian, before I even started, didn't want me to do it... family, friends. 

It makes me a little uncomfortable when Ramit says these things. 

'Cause I just... for the past three years, I've thought otherwise. 

So it's hard to, like, break that. 

What's the difference between a job and a career? 

A job is probably just something that, you know, you go to every day, no big deal, it makes you some money.

And maybe a career is something that you... maybe you went to school for it. 

You love it. No? Maybe? 

Mmm. 

And what do you have today? 

Huh. 

A job. 

If you want to build an empire, that takes changing the way you think about your income. 

I have some homework for you. I want you to spend some time on the psychology of money. 

You have some money beliefs you don't even realize are money beliefs. 

Like today you told me, "I got to work harder." 

The belief you have is that "It needs to be hard in order for me to make money." 

Hmm. 

And that's not true.

And I want you to create your conscious spending plan. 

A lot of things are gonna become very clear to you. 

Okay? I don't need to tell you. You're smart enough. 

You're gonna see it right there on paper. 

Okay. I will. 

Send it to me. 

I know Millie feels she's put so much time into this MLM that she doesn't want to give up now. 

But that's what's called the sunk cost fallacy. 

The sunk cost fallacy is like being in a bad relationship. 

You spent three years in a terrible situation, and you think to yourself, "I already spent that much time, I don't want to give up now." 

The solution is not to look behind you and fixate on how much time you've spent. 

The solution is to look forward. 

( upbeat music playing ) 

Frank: Uh-oh.

( Jasmine chuckles ) 

Jasmine: You stopped, we gotta do three more. 

Frank: How many we doing? 

Jasmine: Fifteen. 

Jesus. 

( Jasmine chuckles ) 

Fifteen? 

Fifteen! 

Frank: Jasmine and I kind of share a brain. 

She's seen me through some really dark moments. 

Come on. 

Purr! 

I struggled a lot when I got to DC, when I moved here. 

She saw me through an eviction. She saw me lose my grandparents. 

( Frank exhales ) 

Jasmine: There you go. 

( Frank exhales ) 

It's good to have somebody in your corner that is able to check you when you're wrong and lift you up when you're right. 

Jasmine: So how was Mexico? 

Frank: Mexico was good. 

I had a budget of, like, a stack. 

Okay. 

And I ended up spending $1,400. 

So I not only had set aside a stack, I had to pull out 400. 

What's going on with Ramit? 

I told him about the extra money. 

He, like, almost had, like, three pigs and four donkeys. 

( both chuckle ) 

And then I told him that I'm thinking about quitting my job. 

I don't think I'm gonna be a school social worker no more. 

You're joking! 

No. I'm dead-ass serious. 

We are not having a full-time job? 

I don't think so. 

( dramatic music playing ) 

Frank. 

When?

Like, I done already started packing up my office. 

You're stressing me out. You are. I'm not gonna lie. 

'Cause you know how I am about stability. 

( Frank sighs ) 

Stability and being comfortable is something we've always talked about. 

It was a goal of ours when we were in grad school. 

And the fact that I'm about to potentially put that in jeopardy to follow my passion is scary. 

How did we get here? 

My content is jumping now. 

I can't create content just on the weekend. 

Like, I can't... I don't... I know I have to sacrifice some things. 

( chuckles )

You think I'll be poor? 

I think that you have created... 

It's gonna be a lifestyle change. 

That's what I was about to say. 

You've created habits in your life that something's got to go. 

So what did Ramit say? 

He wants me to do a conscious spending plan, like, without the income that I get from my job. 

( Jasmine chuckles ) 

Well, the.. the joke is currently, is think, what is conscious spending? 

I don't know her. 

'Cause I was about, uh... 

This is something new we're starting. 

About to say, Gucci... 

Is Gucci conscious? 

He told me I could only go to brunch once a month. 

What if I go to brunch twice a month and somebody else, like, pays for? 

( Jasmine laughs ) 

Well, who's paying for it? 

I don't know. 

( both laugh )

I guess I would say I am a risk-taker. 

I moved all the way up here with $1,000 and had no plan and slept on my best friend's couch. 

I take all kind of risks when it comes to fashion. 

I'm always pushing the boundary. 

Little daredevil. 

( chuckles ) 

Regardless of the numbers... 

Jasmine: Mm-hmm. 

...and what they look like, and how scary that would look for me, I still have to go with my gut. 

Okay. 

When God tells me to go, I got to go. 

I would never forgive myself if I don't try. 

If you don't try. 

I think it's all gonna work out. 

( upbeat music playing ) 

So last night, Mikey overheard me say I was $5,000 in credit card debt. 

I get off the phone. 

I'm talking to him, and he's acting a little weird, kind of just being shorter with me. 

And just... ( grunts ) ...you know, kind of just being humpy. 

( breathes deeply )

Just like... So I asked him. I was like, "Uh, everything okay?" 

And just like, "I didn't know you had credit card debt." 

"I thought you had paid that off." 

Um, and I don't want it to be these things where, like, he thinks I'm trying to lie. 

I don't know what I can do to fix this. 

( dramatic sting ) 

( "Someone Save Me" by Robin Loxley & Wolfgang Black playing ) ♪ Someone save me, save me now ♪ 

♪ Save me, save me ♪ 

♪ 'Cause I'm waitin', fadin' out ♪ 

( song fades )