Mountain Views News     Logo: MVNews     Saturday, April 20, 2013

MVNews this week:  Page 15



 Mountain Views News Saturday, April 20, 2013 


The latest on Business News, Trends and Techniques

By La Quetta M. Shamblee, MBA



What do Avon, Amway, Herbalife, Mary Kay and Tupperware have in common? Each of these 
companies is among the most recognizable companies in the multilevel marketing (MLM) industry, 
and each of them offers a line of products marketed to and purchased by a broad base of consumers. 
Unfortunately, many alleged business opportunities disguised as MLM’s have turned out to be 
nothing more than elaborate pyramids.

According to the Federal Trade Commission, there are legitimate MLM’s. Many of them provide 
opportunities ideal for individuals seeking to start a business or build an additional source of income. 
As more individuals are confronted with a barrage of slick sales pitches and fancy websites that tout 
how easy it is to “sign up and make money,” it is important to know the key differences between 
legitimate MLM’s (which are legal) and pyramid schemes (which are illegal) camouflaged as MLM’s.

In a pyramid, recruitment is king! The primary focus and incentive to earn compensation is directly 
related to one’s success in the repeated recruitment of other people who pay to enroll as a member, 
distributor, etc. This recruitment may be repeated directly or by encouraging the new recruits 
to enroll other paying members. The company’s products and services are primarily and heavily 
marketed to the members, with minimal focus, support and/or financial incentive to sell products/
services to a broader audience. At some point in the process when there are no new recruits on the 
conveyor belt, thus, no more enrollment fees, the pyramid collapses. The newest recruits are left 
with nothing for their investment. If the act of enrolling new paying recruits is the primary basis 
for member-recruiters and management to earn compensation, it serves as a red flag for a potential 
pyramid scheme. Apply this fundamental test to help make the distinction.

In contrast, financial success in a legitimate MLM is directly tied to products and/or services being 
marketed and sold to a broad market base “outside” of the company’s own member-distributor base. 
Avon and Tupperware are two of the oldest and most well known. In recent decades, companies 
structured as MLM’s have adopted terms like “affiliate marketing” and “home-based business 
franchising,” but the distinction surrounding compensation tied to recruitment versus the sales of 
products and services remains the same.

Make no mistake, the MLM industry remains a viable arena to establish and build a money-making 
business. Once you identify a legitimate company that is a good fit for you, learn their system and 
work it with consistency and persistence, you will have the opportunity to claim your slice of a multi-
billion dollar industry. According to a year-end report by the Direct Selling Association in 2011, 
MLM’s were responsible for the vast majority of $154 billion dollar in sales by more than 90 million 
distributors worldwide, with approximately 20% generated by 16 million distributors in the United 

One of the best places to gather basic information on how an MLM opportunity compares within 
an industry filled with legitimate opportunities, visit the Multi-level Marketing International 
Association at Founded in 1985, the MLMIA maintains a directory of 
information and rankings for the benefit of the public’s interest.

Did you realize that 6 out of 10 U.S. households have pets? That means that those without critter 
companions are in the minority, but if you’re a pet owner selling your home, you shouldn't ignore the 
perceptions of those families that don't include cats or dogs.

Odors are the biggest issue. This isn't to say that your housekeeping is remiss, but remember that 
some buyers who visit your home may experience allergies or be particularly sensitive to pet dander 
or odors. Just vacuum the floors and furniture frequently and use an air sanitizer.

During the early stages of your listing, you'll likely experience more frequent showings and visits by 
buyers. This is a particularly good time to make arrangements to board your pet, or seek out a good 
"doggie day care" center for quick visits during showings. This may be safer and less stressful for your 
pet than a constant parade of strangers in your home, and may put buyers more at ease as well.

In any case, be sure to pick up toys, bowls, and bedding in advance of a showing, just as you would 
tidy up the children's things and other rooms throughout the house before buyers visit. A particularly 
attractive gesture would be to offer a cleaning allowance, no matter how scrupulously you maintain 
your home. This should quiet any potential objections.


By Carl Davis, CIMA


The long-struggling housing market is finally showing signs of recovery, giving 
many homeowners more equity in their properties. This encouraging trend is 
likely prompting more pre-retirees to consider if, and how home equity can be 
turned into a source of cash to help fund their retirement.

There was a time when owning a home with little or no outstanding mortgage balance was considered 
a potential financial bonanza for those in retirement. For years, home values moved higher, sometimes 
dramatically so. But starting in 2006, the bottom fell out of the housing market. Home equity was 
decimated and homeowners changed their expectations about the role equity can play in retirement.

Even with a lower value, home equity continues to represent one of the biggest assets for many 
Americans. It may play an even more important role when retirement savings come up short of 
expectations. Some already retired or approaching retirement feel like they have little choice but to 
tap the equity they’ve built in their home to support their cash flow needs throughout the rest of their 

The question then becomes how to do it. There are a variety of options available, but the right answer 
for you may depend on what plans you have for living arrangements in the future and many other 

Finding the most realistic solution

There are risks in assuming that the equity you’ve built up in your home will be a guaranteed source 
of income in retirement. For starters, you will always need a place to live, so you can’t assume the 
full value of a home is at your disposal. Here are three primary options those in retirement generally 

Home Equity Lines of Credit (HELOC)

Americans became accustomed to tapping their equity through HELOCS in the last 30 years, and 
though it is a reasonable option for an employed individual, it may be less practical for someone in 
retirement. HELOCs need to be repaid, and using the proceeds from a home equity loan to help fund 
retirement income needs often means taking on interest costs in order to generate that income. It’s 
important to note that an individual puts a lien on their home by taking a HELOC (second mortgage), 
and risks losing it should he or she fail to repay under the terms of the loan.

Reverse Mortgage

An alternative that has become popular with many retirees is to use a reverse mortgage. This allows a 
homeowner to tap into the equity of the home while still occupying it. A reverse mortgage provides 
payment to homeowners for the bulk of the value of their homes via a lump sum, a line of credit or 
periodic payments. In essence this is a loan to the homeowner paid back when the house is sold at 
some future date. However, interest accrues throughout the duration of the loan and upfront fees 
apply, so it can be expensive.

A standard reverse mortgage, also called a Home Equity Conversion Mortgage, charges a two percent 
mortgage insurance premium on the full value of the home. The government now offers a lower cost 
“Saver” loan with a mortgage insurance premium of just 0.01 percent of the home’s value, but applying 
a higher interest rate. Over time, the combination of fees and interest charges can significantly deplete 
the value of the home’s equity as it applies to income needs. Individuals who qualify for a reverse 
mortgage must also be at least 62 years old. The older a retiree is, the more he or she can receive from 
the home’s equity. Understanding the complicated terms of a reverse mortgage before signing on the 
dotted line is crucial.

Selling Your Home and Downsizing

The other way to tap a home’s equity is to sell it. Many retirees find they are ready to “downsize” 
their living quarters to a smaller home, townhome or condo. If the market is right, they can sell 
their existing home, buy a new place and have equity leftover to add to their retirement nest egg. 
Alternatively, they can pocket the full proceeds from the home sale and rent their living quarters or 
explore other living options. This will greatly bolster their retirement savings, but it also adds a new 
monthly expense they will need to fund throughout the rest of their retirement.

Home equity offers great potential value in retirement but, like any investment, is subject to the 
fluctuations of the market and may have tax consequences. If you plan to tap your home’s value to 
support your retirement, proceed with caution. Remember that the primary function of your home 
is to provide a roof over your head, and using equity to fund retirement requires careful planning.

Carl H Davis, CIMA®, CRPC® is a Financial Advisor and Vice President with Ameriprise Financial Services, Inc. in Los Angeles 
, CA He specializes in fee-based financial planning and asset management strategies and has been in practice for 36 years. To 
contact him at 310-954-2566 or via email @, or at 10880 Wilshire Blvd, Los Angeles CA 90024

The sale of a home and home equity loan products may have a tax impact, please consult your tax advisor.

Ameriprise Financial Services Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor 
or attorney regarding their specific situation.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member 
FINRA and SIPC. © 2013 Ameriprise Financial, Inc. All rights reserved. 


Pinterest is a social media site that is easy and fun to use. It allows you to 
organize all your favorite things you find on the web and in Pinterest. It is made 
up of images and videos. 

Marketing gurus are keeping a close eye on Pinterest because it is driving more 
web traffic than any of the other major social bookmarking sites.

The main reason a business would want to be on Pinterest is to drive traffic back to their website. 
Here are five best practices for using Pinterest:

1. Make sure all your product images on Pinterest have a link back to your site and make sure 
you use attractive images that people will want to re-pin. You might review your web site and ask if 
the images on it are “Pin-worthy.”
2. Create unique boards on your Pinterest profile. Figure out how your business fits a certain 
lifestyle or theme. For example, let’s say you sell cupcakes. You might create an “all things pink” 
board and fill it with pink flowers, pink dots and anything that is interesting looking yet pink, then 
squeeze in a few pictures of your pink cupcakes.
3. Figure out the best hashtags for your product. Just like Twitter, hashtags help you search 
for similar content on Pinterest. For example, if you search for the hashtag #parenting all the recent 
pins that have #parenting in their description will pull up.
4. Participate and re-pin from other Pinterest users. To create unique boards on Pinterest, 
you don’t have to come up with unique images, they already exist. You can simply hit “re-pin” on 
anything you see on Pinterest and you can add it to one of your boards.
5. If it makes sense for your business, include the price of your product with the dollar sign 
in the description and Pinterest will automatically categorize it into its gift category. The cost will 
appear on the image. 

Just like the other Social Media sites, Pinterest can help people find out about your business and the 
products and services you provide. It’s important to stay active and pin new content at least once a 
week. Happy pinning!

About MJ: MJ and her brother David own HUTdogs, a creative services business that specializes in Internet 
Marketing strategies. They are known for providing valuable information at their Social Media and Email 
Marketing classes. “Like” them on Facebook for trending news in social media, internet marketing and other 
helpful tips,

Sign up for their upcoming classes and presentations at: