Letters To Samuel

Dear Samuel,

In a previous post, I said that being a shoe shine guy easily passes the McDonalds test. But I never explained what that is.

The McDonalds test is my way of explaining to network marketing people why their system is a waste of time. At least once per year I am approached by somebody who wants me to join their network marketing scheme. It's either amway, or primerica, or prepaid legal, or blue green algae, or xango, or whatever. I say that for the most part network marketing doesn't pass the McDonalds test, and I have applied the McDonalds test to any possible money making idea.

To apply the McDonalds test I ask myself one simple question. "Would I make more money in the same period of time gathering recruits for Amway (or Primerica, or Xango, or Morinda, or whatever) or flipping burgers at McDonalds. Almost always the answer is flipping burgers at McDonalds.

I learned this bitter, bitter lesson the summer Dad convinced me to come home from my job as a trail guide and do Primerica. The kind way of describing this summer is that it didn't pass the McDonalds test. But every time I think of it I have to censor a stream of profanity that reaches to the moon.I know people who make money in these projects. I know people who make a TON of money doing stuff like the network marketing schemes described above. The vast majority of people who participate in these ventures waste a huge amount of time, and money. And that's a fact. Would you make more money working for Primerica, or flipping burgers? No contest, you'll make more money flipping burgers. If you really are interested in financial services, or insurance, or refinancing people's mortgages you'll make a lot more money working with an insurance agency, or a loan broker, or a securities dealer. All of those things are within your grasp, why would you need to do it with a network marketing company? Network marketing companies by and large are rapacious, pitiful, stupid and hollow.

On the other hand, if you ever are in the right position it might be a good idea to start a network marketing company. Life at the top of those things is SWEET.

So, here's a short quiz.
Does joining Amway pass the McDonalds test? - NO
Does shining shoes in an office tower pass the McDonalds test? - If you do it right - Yes

When you get older and have better opportunities the McDonalds test will become kind of irrelevant. The McDonalds test is a way of expressing the economic concept of opportunity cost. The cost of what you're doing is that you won't be able to do the best possible alternative to what you're now doing. For my friend who is a civil engineer, he has to weigh whether he should keep on drawing salary as an engineer or do something else with his time. So far he has decided that he wants to continue being a civil engineer for his day job.

Hope that helps,

Jay