I have people asking me these questions all the time: How do I make money from home? How do I become my own boss? How do I start a business with little or no capital?
We will explore a simple business concept that you can do from home to achieve your financial goals. Whether your goal in mind is to make $300 per month to pay credit card bills or bring in an additional $1000 per month to help pay the mortgage or maybe add into your savings. And, how about a six figure yearly income that enable you to walk away from your employment forever? So, stick with me here, over the next few paragraphs, I’m going to answer some of these bewildering questions and many others. At the end of this article, you will have a thorough understanding of why some people make ten thousand a year and why some people make ten million a year; both with only 24 hours a day. You’ll understand how our particular business model works–exactly how you can make money, and you will also find out if this niche is suitable for you. So sit back, relax and let’s begin.
First, let’s discuss the different ways on how to earn an income:
- Work for someone else. Basically, you decide to trade your time for a salary or hourly wages to grow someone else business. Your employer determines the role you perform, the hours you work, the duration of your employment and the value in which your time is worth. Employment is the most familiar but often the most restrictive means to create wealth.
- The next way to earn money is with a professional career. Some different types would include doctors, lawyers, engineers. In this scenario, you obtain a higher and costly education or cultivate a particular set of skills or knowledge, and you are compensated for these services. Professional services often provide a higher level of compensation. However, come along with longer hours and a greater commitment. It typically requires continuous training and a substantial investment of time and money.
- Now the third way to make an income is what a number of people dream about. And that is to become your own boss. This is the most enjoyable, most flexible and the most satisfying way to make money. The major advantage of becoming your own boss is you have the opportunity to leverage efforts of other people to accomplish more, for this reason you earn much more than otherwise could on your own. This is how people could improve financial independence and their time freedom. Not like employment in which you trade your limited time for a fixed amount of income, business owners in our business model can utilize other people’s efforts to their very own prospective.
According to a recent report released by the US Census Bureau that 49% of businesses are home based. There are over 20 million home business in the United States with new ones getting started every six seconds. Certainly there are many traditional home businesses such as bookkeeping, computer services, home repair, construction, etc…… but what we are going to discuss today is a unique, rapidly growing that has a distinct set of advantages over the more traditional businesses. This kind of business typically requires no past experience, very little start up capital, no inventory, no employees, no headaches, no big overhead that comes along with the traditional business. You can start part-time or full-time; You’re the boss, so you decide what hours you want to work. In short, there is greater flexibility. This business concept offers tremendous potential with less time investment.
So what is this business called?
What is Network Marketing? What does it mean? It may surprise you but it’s already something you do everyday.
It means word of mouth advertising essentially recommending something to someone else. If you take a moment to think about it. This is something we all do on a regular basis. We refer friends to favorite restaurants, movies, travel. We refer accountants, doctors, books, shows and any products or services we personally like to everyone we know. It is merely part of our nature. So the fact is, we are all technically network marketers. It’s just who we are. The difference is most of us don’t get paid to do this but some people do and they get paid very well. As you will understand in a moment they are compensated for far more than just their personal recommendations. Let us take a look at an example, let’s say you refer your favorite restaurant to several friends, and your friends decide to go there and enjoy a great meal. Some of them tell their other friends and those friends tell their other friends about the restaurant–that’s a lot of business resulting from your simple recommendation. Now, is the restaurant owner going to compensate you for bringing him the business, will he reward you for your referrals, every time those people return? Of course not! Even though you did provide the word of mouth advertising you did not get rewarded. In a network marketing business, you get paid very well for simply doing what you already do but it goes much deeper than that. We’ll explore the exact nature on how you get paid in network marketing. The network marketing companies, I personally represent pays out after every sale. And here’s where it gets really exciting, you are not only compensated for your referrals but also for the viral exposure that your referrals create. A simple explanation of viral exposure is a website called ‘youtube’. When people see a funny video they like and they forward the link via email to people they know, and before you know it, the same funny video has circulated all over the community–and maybe even the the world! This is what they call viral marketing. We all do it, everyday, and the goal is to have your referrals turn into many more referrals and product sales – spreading from one person network to another to another. To encourage this viral exposure, network marketing companies compensate you not just for finding customers but for finding new referrers who in turn find customers and referrers as well.
Let’s dig in deeper, to examine the Network Marketing concept is similar to a Real Estate Agent’s job. For example, Marie is a real estate agent and she is also the owner of a Real Estate company, she holds a broker’s license. As an agent, Marie makes money when she sells a house on her own effort, however as a Real estate company owner, Marie also earns income whenever any real estate agents in her office sells a home. Network marketing simply gives regular people without a tangible inventory or a licensed service of their own the very same opportunity, the opportunity to own a business that leverages the efforts of others. This is just one beautiful aspects of Network Marketing industry.
So many Network Marketing companies are not recognizable by average person that is because the companies rely on word of mouth advertising, unless you’ve been told about them you may not recognize them but even with that said, do you recognize these companies? Microsoft, IBM, AT&T, General Electric, Xerox, Enagic, Forever Living products, Trivita? These companies distribute some of their products or in a few cases all of their products through network marketing. Billionaire investor, Warren Buffett owns several Network Marketing companies, and many Network Marketing companies are publicly traded in the stock market. The truth of the matter is network marketing is a highly regarded business model so long as the company engages in the sale of ‘actual products’ with ‘real value’ to the marketplace in other words there has to be a realistic demand and real significance beyond just the opportunity to make money. As with any other opportunities, evaluate the one you’re considering carefully.
How do you make money in this industry?
Have you ever wondered why some people make one thousand dollars a month and some people make one thousand a month both with only 24 hours a day? What do you think is the difference? The difference is not the amount of hours–Whoever creates greater value from the time invested makes more money. It does makes sense, doesn’t it?
The following concepts that I’m going to explain below will forever change the way you think about making money. Their known as Residual Income – Compounding – Leverage.
Let’s first talk about income. There are 2 types of income: Linear income and Residual income.
Linear income is what you get from employment. You work, you get paid a fixed amount. In essence you are trading your time for a fixed amount of money. In this type of income, in order for you to make more money you have to work more hours, or better yet hope for a raise or a promotion or probably get a second job. With linear income it could be very hard to get ahead because when the work stops, the income stops too.
Now let’s look at Residual Income, sometimes referred to as Passive income or recurring income. It is when you do something once, but continued to get paid over and over again. In this case, even when the work stops, the income continue long after the initial effort was done. Residual income is the money that keeps coming in, long after you have completed the work. It is the kind of money that song-writers, authors earn from their royalties. In our line of business, once you have established, a residual income stream, it keeps on flowing, even if you decide to take a year off and lie on the beach. The biggest rewards from creating a residual income are financial freedom and time freedom. So let’s illustrate the power of residual income with practical examples. Let’s say, you shared or referred a product or service to ten people in January who make a purchase and it’s something that they want each month. Though, you found those customers back in January, you get paid in February, March, next January and beyond for as long as they stay as a customer. Your effort produced an ongoing continual payment for work completed months before. Think about someone selling vitamins and supplements in a network marketing environment, customer needs your product and reorders month after month.
Now, there’s really nothing wrong with the linear income, but given a choice which would you prefer? Work hard and get paid once or work hard once and get paid residually month after month, year after year.
Residual income is an important concept for building wealth.
Next, let’s examine ‘Compounding’ effect. Compounding is the underlyng core that creates remarkable success in network marketing it is the compounding effect. Consider this, if I were to give you a choice of one million dollars in cash or a single penny that doubles every single day for a month. Which would you take? If you’re like most people you’ll quickly say, I’ll take the million dollars, and like most people you have missed out on a whole lot of money. Do the math and you’ll be surprised. That penny on day 2 is $0.02, on day 4 it’s $0.16, on Day 7: $.64 Day 8 it’s $1.28, on day 12 it’s $20.48, on day Day 22: $20,971.52, on day 28 it is $1,342,177.28, and if the month has 30 days you’re looking at $5 million on the last day. Compounding is amazing! Network marketing capitalizes on compounding in 2 significant ways. First, you can account to Residual Income because you’re able to get paid month after month for work you do once. Each month is an opportunity to create on the earnings you produce the month before. Your work compounds on itself. Consider getting a pay check raise every month by simply doing the things you did before. One thing I discovered early on is that you can always trust the numbers.
Let’s be conservative for a moment…
If you bring on just one new person into your network each month and then teach your new referrer to do the same… here’s what will happen:
At the end of seven months you’ll have over 100 members in your network… but after 12 months you’ll potentially have over 4,000 members in your network!
The compounding effect would produce, earning your network a percentage residually on all 4000 members under your team. Just imagine what that would mean for your cash flow and income…Pretty incredible. Ok you’d say, well the reality is not everyone who joins your team will refer one person per month-some people will do more and some people will do less. However the power of compounding is truly remarkable. And, one of the many reasons why people are able to supplement, replace or even surpass their employment income in a surprisingly short amount of time.
Leverage is the final concept that we’re going to explore. John D. Rockefeller often regards as the richest person in the history illustrates the concept of leverage best when he said “I would rather have one percent of the efforts of 100 people than 100 percent of my own efforts.” To put it in another way, money alone is nothing without the time to enjoy it. Leverage brings you the time freedom. How? Using the Ratios of Leverage, which by all means turning other people’s effort into personal potential. Let me ask you this: If a real estate broker wants to make more money what does she, or he have to do? The answer: Hire more agents to sell houses. Maria is a real estate broker, she wants to make more money. She opened up a new branch, she hired more agents to sell more houses, by all means, more money in Maria’s pocket. By leveraging the efforts of others create the Time Freedom–the less time tied into personal production the more freedom she has.
“If you live on a day’s pay for a day’s work. There is not much leverage in a day’s pay for a day’s work because no matter how hard you work or how much you get paid, your leverage ratio is 1:1. This is also true for high-income professional people; they get stuck at an income level, for example: A dentist can only drill in one mouth at a time and a lawyer or accountant only has so many billable hours in a day. Again the problem is the 1:1 leverage ratio.”
The power of Leverage is one of the beauties of Network Marketing. When you start a network marketing business you are immediately given the opportunity to leverage other people’s effort where you can earn not only on your own efforts but on those of others for life.. With the right company, you’ll have proven products–an established reputation, proven tools and a system at your fingertips. Together they offer you an opportunity to build an ever growing organization of eager business owners each of whom has the same incentives and opportunity you have. Their efforts expand their own business and in the process grow yours as well. In time, your own earnings will be less centered on the hours you personally work and more on the cumulative efforts of the people in your team. Imagine a team of 10, 100, one thousand or more, compounding, leveraging, residual all working together. They provide a very unique and powerful way to not only build your income but your time freedom as well.
Here’s the truth, there are great jobs, great profession, great businesses… but how many businesses do you know of where ordinary people regardless of age, education, skills or background are given such remarkable potential to attain the financial and time freedom.
Robert Kiyosaki author of Rich Dad, Poor Dad book called Network marketing a “revolutionary way to achieve wealth. The most successful people in the world look for and build networks while everyone else just looks for work.”
Paul Zane Pilzer NY Time best selling author, world renowned economist and former Presidential Economic Advisor said”The emerging industries of wellness and network marketing are combining to create today’s and tomorrow’s new health.”
The billionare real estate mogul Donald Trump said “If I had to start all over again from scratch, flat-broke, I would start with a Network Marketing company.”
During this presentation, we discussed 3 different systems on to make money, and network marketing is one of them. We also explained that network marketing is simply a word of mouth based distribution channel and how it benefits you. We covered how you can make money in this industry focusing on the concepts of Residual Income, Compounding and Leverage.
Hopefully this article will serve you a great purpose, and hopefully it gives you some powerful reasons to give network marketing a strong and careful consideration.
“Successful people build networks, others just look for work” – Robert Kiyosaki, Best-Selling Author – Rich Dad, Poor Dad
“If you live on a day’s pay for a day’s work. There is not much leverage in a day’s pay for a day’s work because no matter how hard you work or how much you get paid, your leverage ratio is 1:1. This is also true for high-income professional people they get stuck at an income level, for example: A dentist can only drill in one mouth at a time and a lawyer or accountant only has so many billable hours in a day. Again the problem is the 1:1 leverage ratio.” -unknown source
Robert Kiyosaki author of Rich Dad Poor Dad called Network marketing a “revolutionary way to achieve wealth. The most successful people in the world look for and build networks while everyone else just looks for work.”
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!
Paul Zane Pilzer NY Time best selling author, world renowned economist and former presidential Economic advisor said”The emerging industries of wellness and network marketing are combining to create today’s and tomorrow’s new health.”
“If I had to start all over again from scratch, flat-broke, I would start with a Network Marketing company.” –Donald Trump
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