Residual income, also known as passive income, is one of the keys to creating true wealth. Residual income in it’s most basic definition is income that is being generated long after the work has been completed. That is to say, some work was involved in getting the residual income stream started, then once the work was completed, no additional work was needed to continue the positive flow of income.
There are many people who are not familiar or even aware of what residual income is. Not knowing about residual income is a definite disadvantage when looking to build and increase your overall wealth.
A simple example of residual income would be to look at an investment that is being held. Please understand that what is about to be discussed is simply for highlighting what residual income is in its simplest form. In reality market volatility, risk, fees and a list of other factors will affect the example here and investing advice is not the purpose of this example.
If an individual was to have $1,000,000 in an investment, and that investment made annual returns of 7%, this individual would have a residual income of $70,000 annually. Every year, regardless of what the individual did, this investment would continue to make $70,000 annually. The work in this example is the investing of $1,000,000. After that is completed the investment will annually return 7%. Basic residual income. The question becomes, “How do you gain the $1,000,000 to invest?”
With a basic understanding of residual income, you will now want to understand what is the best and fastest way to start generating it. How can the average individual create an income stream that will either generate the kind of money in our example above or continue to generate money month after month, year after year?
There are careers that one can choose that have a residual income portion in them. These are careers such as insurance sales, authors and musicians to name a few. Insurance agents have a residual income built into every insurance policy that they sell. When their clients renew each year, a portion of their premium goes to the insurance agent who sold them the policy. For authors and musicians, residual income comes in the form of rights. The rights to sell a book or a song. Again you can see that for all three careers that were mentioned here, the work was done once and the residual income came after without any further work being required.
So what do you do if you aren’t going to turn to insurance sales, write a book or become a rock star? You still want to have the power of residual income working for you yet you have a current job. You just want to start the income stream going so that when it comes time to retire, you have a significant amount of residual income to afford you the lifestyle you want. Enter in the industry of MLM.
The Network Marketing industry like no other allows individuals to start on a part-time basis and build a true residual income. Before moving any further on this topic two items need to clearly be understood about discussing residual income and network marketing.
The first is that it will take time. Just because you start an MLM business does not mean that you will instantly generate the residual income that you are after. It will take time to build. If anyone tells you that you can do it in a relatively short period, say less than 1 year, be very cautious. The residual income created in an MLM business takes time to gain momentum and it is through the power of leverage and duplication that a true residual income will be generated.
Secondly, you will have to work to build your business and the residual income is on the “back-end” of your efforts. Like in any business there will be days that you put in work and don’t get paid a penny for your efforts. It takes time to build the skills required and the team to generate the income you want. But unlike a traditional business, once your network marketing business gets into the momentum stage, watch out! It is like no other and you will be repaid for your efforts many times over.
Having a never quit attitude is what you will need when building your MLM business. There are many lucrative MLM opportunities available today that will allow you to build the residual income you desire. When looking to select one to join, keep in mind that it is up to you to get your questions answered and ultimately up to you for the actions you take.
MLM has allowed countless numbers of people to retire at very young ages because they embraced their business and took action. Even if starting on a part-time basis, you can build a residual income through an MLM opportunity. In 3 – 5 years you can have what takes some 30 – 40 years to do and for others they never achieve.
*Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependant on the person using the products, ideas, techniques and efforts put forth on Engineered Lifestyles. For our full earnings disclaimer click here.