Most people look at network marketing and think, “This is a way I could make a little extra income. I just introduce this to my friends and relatives. I can start up with almost no cost and do it part time.”
They’re right. You can’t start many other businesses with such little risk. That’s the enticing thing about network marketing. But when I look at the economy, I see something more than that.
The economy has four seasons: a spring boom, a summer inflationary recession, a fall bubble boom, and then a winter downturn and “debt detox.” We saw a roaring boom in the 1990s and 2000s, driven by the baby boomers who were raising families and buying houses. But such a strong boom always ends up in a bubble, and bubbles have to burst. You get a fall bubble boom followed by a winter shake-out season.
What this tells me if I’m marketing to prospects, or if I’m a prospect looking at the business, is, “I don’t just need some alternate or extra streams of income, I need a backup plan!”
The Winter Ahead
If you’re a boomer like me, you’ve seen the spring boom, the summer, the fall boom. But we’ve never seen a winter. We can read about it. I’ve studied it: 1929-1945 was the last winter season when all the excess debt had to be written off. It ended with the worst global war in history before we had the next spring season. But before, all the stock and real estate bubbles had to come down to reality. This winter season is a difficult time, but we need it because it sets the stage for the next major innovation and growth cycle.
We’ve seen nothing but growth in the economy since that last winter season. Ever since 1945 the world’s been great, but now that winter is upon us, people don’t know what to do. According to my research, our winter season kicked in during 2008. We predicted this twenty years ago because we know exactly when people spend the most money: age 46 on average. The baby boomers have peaked in their spending, so we now have a downturn ahead.
“Well,” the government said, “we’re not going to let it happen. Every dollar the economy drops, every dollar a bank loses, we’re just going to create money out of thin air and offset it.” That solution can’t work long term. As I predict in my book The Demographic Cliff, we’re going to see this winter season accelerate again, particularly between 2014 and 2019.
In the 1930s unemployment was 25 percent. Businesses and banks were failing like flies—and that’s necessary. Deleveraging a financial asset bubble is like a big detox in the healing profession, an “overexpansion” detox. You’re overweight, over in debt, and you’ve got to slim down and eliminate a lot of toxins from your body.
It is a painful process, but it’s rewarding long term, so don’t get sideswiped by this. If I were a prospect, I wouldn’t be looking at doing network marketing just a half a day a week and maybe get a dozen people into my downline. I would see this as my backup plan and build a full-time business over time.
The Next Boom
If it weren’t for the government stimulus we’d already be in a deep downturn, and we will be. As Baby Boomers age and aren’t spending anymore because their kids are out of the nest, one of the best sectors will be health and wellness. I emphasize health and wellness as opposed to healthcare, because the healthcare system is overloaded and incredibly expensive. People have been promised entitlements we can’t fulfill, so that system is going to be squeezed over the coming years and decades.
Health and wellness, as bad as the economy’s going to be, will be one of the top sectors, because Baby Boomers are going to spend more money on that as they spend less on everything else—housing, cars, food for the kids, college, and so on.
Weight loss in particular is going to be the best sector in the next decade. People weigh the most on average at age sixty. Fifties is when people are most concerned about weight gain. The other time is probably right around when people are getting married, late twenties, early thirties. These are the age brackets when people are the most interested in weight loss, but things like nutritionals and “anti-aging” products will grow well into people’s sixties, seventies, and even early eighties for women who live longer.
A lot of people also don’t realize that the average life expectancy in the U.S. is 79.6, but if people make it to age 63, they’re going to live to 85 on average. Wellness has a long growth curve in an economy where almost everything else— housing, automobiles, major industries—is going to go down. This is a perfect industry to get into as a backup plan.
Show your prospects they really need a backup plan in a questionable economy. Not only is network marketing a way to create your own business step by step and have a backup plan in case you lose your job or your present business starts failing; if you’re in wellness, anti-aging, or weight loss, you’re going to be stepping into one of the best segments in the entire economy for the next decade or two.
As marketers we want to look for hungry people, and we want to make them hungry. My research says this is going to be a more difficult time than anybody thinks, especially the next six to ten years. The best step you can take is to get control of your own destiny by having your own business. If you succeed at it, you can help others do the same. Isn’t that a worthwhile mission?
HARRY S. DENT, JR. is a renowned economic forecaster who offers a refreshingly positive and understandable view of our economic future and the network marketing profession. He is a Harvard MBA, Fortune 100 consultant, new venture investor, major news media commentator, and bestselling author of nine books, including The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019.
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