Why Network Marketing?

The latest book I am reading now is entitled "How to Become Filthy, Stinking Rich Through Network Marketing (without Alienating Friends and Family)" by Yarnell, Bates and Hall. It is written by authors with over thirty years of experience in network marketing. It is a great primer on network marketing, or direct sales industries.

I find it extremely informative for anyone who is considering network marketing as a supplemental or primary income stream. And for those who are interested in creating multiple streams of income, this may be just the ticket.

Why network marketing?

According to the authors, "network marketing is the only game in town for the next four decades, because it's the fastest way to accumulate risk-free wealth in large enough increments to enable boomers to retire comfortably."

The authors appreciate that the boomer audience may be most readily drawn to network marketing. Network marketing provides an intellectual challenge beyond the boredom that may accompany retirement; and most retirees have the wisdom and capacity to be remarkably productive by working smarter rather than harder.

Economic uncertainty around pensions and retirement accounts may drive many boomers to consider new sources of supplemental income. And network marketing provides a highly personal social network within which to enjoy social interaction with colleagues of all ages. Network marketing allows boomers to give back in ways that may make a significant difference in the lives of others with whom they interact. So it provides fulfillment, in addition to financial incentives.

And typically, network marketing does not take a huge infusion of cash to get started.

Selecting the right company comes down to getting answers to some basic company information regarding the products that one might consider for marketing. The authors propose these for a privately-held company:

1. How is the company capitalized-by the owners or by outside investors?
2. How much of the company is owned by the founders/owners?
3. What's the plan to fund future growth?
4. Does the company have access to additional capital to fund rapid growth?
5. Does the company have an adequate line of credit to support erratic growth?
6. Does the company have debt; if so, what is the ratio of that debt to assets?
7. Does the company have any outstanding legal concerns, such as unresolved lawsuits or product liability issues?
8. What is the previous experience of the chief financial officer and/or the chief executive officer?
9. Has the company ever filed for bankruptcy protection?
10. Is the company willing to let you review a copy of its most recent year-end financial report? Is the annual statement audited by a reputable accounting firm?
11. What is the company's long-term business plan?
12. What are the company's current annual net sales; and more important, at what rate are they increasing?
13. In what area of business is the company currently investing its capital?
14. Is the company profitable now? Does the company have a positive cash flow?

I have included the travel industry as an area for my network marketing activities, but anyone considering network marketing should be knowledgeable and excited about the products they are marketing. This means using the products, and focusing on the results of using these products in people's lives.

A future blog will explore how this book shows that network marketing is able to deliver superior products at less cost than the traditional retail business model. Until then,

Happy investing!

Passive Income

Do you have income that comes to you every month, regardless of how hard you work? Interest on bank accounts, stock dividends, retirement or disability income are examples of some forms of passive income. But they may not generate enough funding to set you financially free.

If you are not earning passive income, are you still trading your time for money? In other words, is your income a direct result of the time you put in at a job? If something prevents you from working, does the money stop flowing to you?

What happens to employees or business owners when they get sick, take a vacation, get divorced or have family medical issues? Typically, the money stops flowing. This is a major downfall for a lot of businesses and entrepreneurs.

Truly passive income is not dependent on your time. True financial liberation comes from identifying other streams of income that can produce revenue without your direct involvement. This is one reason entrepreneurs look to real estate, direct marketing, or related business spin-offs that can produce revenue.

How can you do this yourself?
What work can be outsourced to a third party or perhaps a virtual assistant, that would free you up to serve more clients?

Could you develop different streams of income such as offering e-commerce solutions, webinars or "how-to" manuals to provide you with on-going residual income? Many real estate gurus make even more money offering these services to new real estate investors than they do on real estate transactions.

Here are some other ways to establish multiple streams of income:

Affiliate Relationships: Do you have a product or service that you could offer to your client base from other partners and receive an affiliate commission? My mortgage lenders and insurance agents have often contributed to my marketing costs to help distribute newsletters and advertising to my prospects.

Perhaps you have a product or service you could offer through affiliate partnerships to their client base? Perhaps it is a discount on your real estate commission, a free appraisal, or a home warranty when they purchase or list their next property through you.

Lead Generation: If you are good at developing leads, can you refer them out to someone else to do the work, and receive an income for the referral? Robyn Thompson became a top-producing real estate agent by referring out her seller leads to other agents for market-priced listings, when she was unable to negotiate a lower price to purchase the property.

Offer Membership or Service Plans: Could your membership include a loyalty plan for repeat clients or customers? Monthly newsletters or seminars?

Mine your Database: If you have prospects in your database who have never accepted your offers, can you identify any other products or services that might appeal to them?

Side Business: Do you have time to establish another business on the side? I like network marketing or direct sales, as it can generate residual income over time as the business grows, with little additional effort on your part. I have a direct sales travel business on the side, which is yet another option I can offer to my clients - and who doesn't love travel? Some real estate professionals offer legal services through Legal Shield to their real estate colleagues, a service I love and use a lot. Think about business options that might work for you.

Happy Investing!