Broken promises, flashy lifestyles with no proof of income, and cult-like membership tactics — that’s what comes to mind when reflecting on the ‘forex phase.’ During this time, people would promote joining academies to learn how to trade and build wealth when the focus was really on recruitment into the academy and not so much training to trade. Below are some personal experiences:
Thousands were preyed on. Leaders gave compelling speeches and promised desirable outcomes. They created community and a sense of belonging with like-minded individuals. Leaders even gifted folks, marketing a lifestyle of luxury.
Quickly, there was a fall from grace. Folks started feeling like the MLM was a period scheme. Others witnessed how much of a return on their investment they weren’t receiving. But almost everyone realized how unrealistic the promises were.
What is an MLM?
MLM is the abbreviation for Multi-level Marketing, commonly called Network Marketing. The method uses people instead of retailers to sell products. Operating an MLM is not illegal, but it’s controversial because some MLMs have been exposed as pyramid schemes. Meaning there was no actual product sold.
How it works is that a leader (let’s call her Amaya) will recruit people to buy and sell their product. Then those Amaya recruited (let’s call them Sasha, Shelly, and Lexi) will turn around and recruit others to buy and sell the product. Amaya will earn a commission for Sasha, Shelly, and Lexi as well as for anyone they recruit, and of those recruits, anyone in the next class of recruits. The cycle continues until there is no one left to reach.
Eventually, the focus can become less on selling the product and more on recruiting individuals because of the monetary gain.
That’s why MLM has the reputation it has. Financially, the leader at the top is disproportionately making more money than the distributors doing the majority of work selling and recruiting below them. Mentally, manipulation is used to lure people into buying/selling. Cory Rusin, a researcher who works closely with former multi-level marketing distributors after they leave direct sales, was quoted in Forbes saying, “Dr. Steve Hassan, a leading cult expert, addressed how MLMs use manipulation and blame to ensure any failures to earn large sums of cash through the business model are placed on distributors for their lack of competence or hard work.”
Imagine being told day in and day out that you’re not earning enough because of a lack of skill or hustle when the model in which the business stands is designed to collapse.
What Does MLM Have To Do With Forex?
The IM Academy is a financial education platform that teaches individuals how to trade on the foreign exchange market. It’s identified as an MLM because individual leaders within the business have created academies under the overarching academy by getting folks to buy, sell/recruit on ‘their team.’
According to the main IM Academy website, it’s $249.95 for enrollment, then $184.95 every four weeks to maintain a membership with mentorship, strategies to trade on the foreign exchange market, and a community.
Trading well on the foreign exchange market is a skill; just like any other skill, it’s great. You do not need to join an academy to learn how to trade- it can be Googled. As you probably remember, the messiness came about when what was encouraged on social media was joining people’s academies. Folks wanted to enroll others in membership because they’d receive a commission. In some academies, it became less about learning to trade and more about recruitment.
The emphasis was on selling the product, not using the product (learning how to trade well ), and the culture could have been more beneficial.
A source that desires to remain anonymous said, “I joined and had to pay 174 dollars a month, and they would tell me that I could make up the funds through trading, but when I was learning and trading, I was not making enough profit to cover it.” The academy habitually sells dreams to ‘get rich quick.’ She continued, “It is also marketed as an easy way to make money… joining this thing, I lost more than gained.”
Victims were manipulated and brainwashed into becoming desperate for success. From the videos attached earlier, you can see how they made lofty dreams seem easily attainable. They pressured folks to do more and be more, knowing they would reap the benefits (commission) if there were fruit. Leaders encouraged folks to give their last to make it within the system. That led members to “accruing debt, becoming homeless, and struggling mentally,” stated a different victim who desires to remain anonymous.
Looking back, the promises made, such as to build wealth, were nearly numerically impossible through sole recruitment. For example, leaders encourage 5,000 people to become the first tier of chairman/woman (recruiting 500 people) to reach financial abundance. For all 5,000 people to become a chairman/woman, that is 2.5 million recruits. After those recruits, 1.25 billion are needed for another class of chairmen/women—more than the United States population (337.7 million) required to sign up for the academy.
Leaders sold the dream of quitting full-time roles to make it in the academy when the chances of making the same salary off of recruiting are less than 1%. In 2020, the majority of recruits, s 67.49%, made less than $500. Also, .40% make $25,000- $50,000, about the same salary as an entry-level role.
The fall came quickly after people started recognizing the illegitimacy of the dreams sold. We most likely all know a friend, family member, or friend of a friend that was involved. Therefore, no judgment to those that participated. We understand nobody wants to struggle financially; the leaders were great talkers. Hopefully, the realization is that the grit and grind were always misplaced. With the right resources and opportunity, everyone who wants it will reach their peak potential.