Residual Income - Myth or Reality?

What exactly is residual income and can you truly achieve it in the network marketing or mlm industry?Residual Income - Myth or Reality?By Derrick CarpenterOne allure of the Network Marketing industry is the ability to produce ongoing long-term income. You may have heard of residual income or “walk-away money.” What exactly is residual income and can you truly achieve it in the network marketing or mlm industry? Residual income is the passive ongoing income stream derived from something you do right once and then you get paid for it again and again-like clockwork. Think of it as rock star money. Just say you’re a “one hit wonder.” You wrote the song that makes the cut on every romantic compilation CD forever. You put the “song” in “that’s our song.” Everytime that CD is purchased or that song downloaded, you get paid. Just like the Elvis Presley estate.Linear income, on the other hand, is the kind of income most people generate for themselves. It continues only as long as you continue the work. You trade hours for dollars, pounds, euros or pesos

• If you are a surgeon, you get paid whenever you perform a surgery. If you don't perform a surgery, you don't get paid.
• If you drive a bus, you get paid. If you don’t drive, you don't get paid.

That's how linear income works. You receive income when you work. When you stop working, the income stops coming.Residual income is different.Many Network Marketing companies would have us believe that this is how their compensation plan pays, but the reality is what they call residual isn’t residual at all. You can never walk away because if your organization stopped recruiting new people your income stops.Plain and simple how many times can you get paid for a person taking one trip? Once! How can you get paid next year on the trip they took this year? What about three, four, five, twenty-five years from now? If the answer is no, then it’s not residual income. What about companies that market pills, potions, and lotions? Or how about cosmetics, wholesale and retail goods? Fact is, if your customers and your organizations customers stop actively purchasing, your commissions stop. That’s not TRUE residual income.In truth it’s a rare company in Network Marketing that has a service or product that lends itself to true residual income. Now don’t get me wrong I love upfront money too, but if you’re like me (temporarily motivated to be permanently lazy) you’ll need true residual income, not income built solely on the fact that your organization must continue to grow. You want to build a massive organization, because that contributes to your residual income, not be the cause of it. In truth, companies that can offer a true residual income are mainly subscription based companies, as these are companies that produce a monthly or annual fee. It’s this subscription fee that allows the distributor to receive a portion of the renewal as residual income. Be careful, not every company that offers a subscription type service pays a true residual, so do your due diligence.Stop the Presses:  “Old Dog Learns New Tricks!”  44 year-old former print shop owner shares his money making web 2.0 home-based business tax strategies. Ink & paper no longer required: http://www.homebiztaxbreaks.biz http://30secondcommute.blogspot.com BOAB?
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