(It is suggested you go through the topic ‘Active Income’ first to understand this topic better.)

Passive Income is for ‘getting ahead’ in life!

Unlike Active Income, there is another kind of income one can earn. It is called Passive Income. An income that is so powerful that it keeps flowing even when one stops working. Well, almost! How? By pursuing a business in the Network Marketing industry and putting in a one-time effort for once in our life to create a System that we can own. A System that can be created even on a part-time basis for just 2 to 4 years after which one can enjoy perennial income from it.

The best thing about Passive Income is, it is only during the initial stages one has to work to create the System. Later, it (the System) takes care of itself even if you aren’t there! So what’s the bottom line? First, you have to work towards creating the System so that the System can work for you - forever!

But for the System that generates Passive Income or what is also called as ‘Walk-away residual income’, the very industry called Network Marketing wouldn’t exist! You might possibly be asking “What is behind the System that makes it so powerful to fetch Passive Income?”

In order to understand Passive Income from Network Marketing, let us understand the manner in which Incentives are earned by the BDM in the insurance company (in the topic Active Income) from the efforts of 20 of his Advisors reporting to him.

Put yourself in the position of the BDM of an Insurance company for better understanding of the following illustration :

• under your supervision
• in one day
• 20 of your Advisors
• each work for 8 hours a day  
• across say 20 days in a month
• and therefore put in 3,200 man hours of work
• which makes you get 1 Salary + Incentives

Life is all about Numbers

As you go about reading further, it is taken for granted that you are keeping the age-old adage “Time is Money” in your mind. Now as a BDM, if you were to work alone for a total of 3,200 hours, you would take about 20 calendar months! Since it is a humanly impossible task, you leverage the efforts and the time of 20 of your Advisors to earn your Salary and Incentives (on a monthly basis).

If each of your advisors aggregate about US $ 5000 on Premiums collected, the total Premium revenue generated would be US $ 100,000. As a BDM, if you are paid a salary of say US $ 7000 and 3% of the US $ 100,000 revenue generated as Incentives, your total pay for the month would be US $ 10,000 (US $ 7000 + US $ 3000).

What you have to remember however, is that the real and overall benefits of the 20 Advisors’ time being leveraged is owned by the company, not you (read the section “The Salaried are paid for something that they can’t own!”).

Passive Income through ‘Time Leverage’

Keeping the above illustration in mind, let’s understand how a similar thing works differently and powerfully in Network Marketing, as mentioned in the following illustration. Put yourself in the position of the Associate.

As an Associate in a Network Marketing company, working the whole of the year 2008, let’s say you bring in 40 Associates in your team who are also like-minded to earn Passive Income from their Network Marketing business by creating their own System. Having learned the business during your first year in the business, that is 2008, in the year 2009, you (along with those up your line who brought you into the business) teach each of your 40 Associate team members to bring in their own set of, say 20 Associates and form the first line Team. This is the stage when you start Leveraging the Time of your Associates.

Since some or many of your Associates would possibly be having contacts in many other countries too, they might bring a few of those contacts into the business, and your organization will have a global presence and not just a local one. By the end of 2009 therefore, you have a total of 800 Associates in your organization structure.

Going forward, you need to have a good close look at the numbers and your powerful earning potential! Let us say each of the 800 Associates in your Network generate aggregate sales of just US $ 1000 per month (which is 1/5th of that of the BDM’s Advisors), the overall revenue generated would be a whopping US $ 800,000. Even if 3% is paid to you as Commissions for being the one who fundamentally started the organization and supported the first set of 40 Associates, you earn a decent US $ 24,000 per month.

Now hold on. The power of Duplication in Network Marketing is more powerful than you think, especially as the System evolves over time. All that we were discussing about was only till 2009. In the year 2010, even if each of the 800 Associates in your entire organization (who were brought in by the 40 Associates you brought in directly) bring in just 10 Associates, your organization’s strength becomes a phenomenal 8000! In the event each of them perform an average sales of US $ 250 per month during the whole of 2010 (which is just a fourth of your average sales per month in 2009), your organization’s revenue would be a phenomenal US $ 2 Million per month.

If your commission on the overall sales is a measly 3%, you still make a fantastic US $ 60,000 – every single month! Remember! Each Associate of yours is a Profit Centre himself/herself as he too can develop his organization to many levels like you do!

Remember! The above was only an illustration to help you understand the power of Time Leverage and the percentage figures of commissions are just an example. When you actually associate yourself with a Network Marketing company, generate revenues and have an organization of the kind discussed above, you could well be raking commissions much bigger than you can imagine!

Now the final word! Once your System is in place, the process of Duplication is never ending in your Organization and the scenario goes on and on, every single year beyond 2011. That’s when you actually reap REAL rewards from the business in the form of 6/7 digit pay-checks through the performance of thousands of profit centers in your organization around the world!

The power of Duplication

The illustration discussed above could sound like plain simple arithmetic. But when you look at it in relation to :

(a) the no. of Associates in your organization
(b) sales generated by each of them
(c) the no. of associates they bring in turn (your indirect Associates) and
(d) overall sales generated after a couple of years, every single month, by both your direct and indirect associates, the real power of Duplication emerges!

This is a Relationship based business and you have to be a reasonably good People Oriented person. It might seem to be difficult but it’s NOT impossible. And what’s noteworthy is that once you commit yourself to make it possible, you won’t be working the kind of 12-14 hour days the way you did as an employee.

You will, in fact, effectively be putting in just 4 – 5 hours of work during the 3rd year, may be 4 - 5 days a week. It could be even less, if you have developed a high quality System and enough leaders who are independent in the true sense of the word, who come to you only occasionally for your wisdom. If this can happen in just 3 years, you can work it out and find out for yourself how much your organization can grow in size in another 5 years! The numbers would be mind-boggling! That’s why Network Marketing is a wealth creation tool, and not just a money making tool.

Make no mistake! It’s already happening to hundreds of thousands of people – as you read this very sentence!!

Challenges of the present, and the new emerging trends

Thanks to the emerging global business trends, mergers & acquisitions of corporations, and most critically the downsizing and retrenchment within corporations to compete in global markets; many employees in the mid-thirties and early forties find themselves out-of-place at their work place and are uncertain about their future career. Due to the prevalence of such uncertainties, there are many statistics to point out that around 95% of adults between the ages of 25 and 44 are looking to own their own business.

We now live in a world where job satisfaction and job guarantee is a thing of the past, as there is no employment guarantee in the first place! It is easy now-a-days to find people who jump half-a-dozen jobs in as many years or even less. This is a common phenomenon for the simple reason that people who are tired of waiting for promotions, tired of commuting and tired of the rat race. People want to work their own hours and take a vacation when they want to, not when they are let to. They want to drive the car that they always dreamed of, not the one that they can afford. They would love to live their life where they want to live, not where their job puts them. They want to retire in style, not on a shoe-string!

It all boils down to the universal fact that people crave for Freedom – especially Financial Freedom and Time Freedom. Without financial freedom, people just ‘get on’ with their lives. On the other hand, financial freedom can make them ‘get ahead’ in their life.

For those special few who are desirous to ‘get ahead’ in life by being financially free, the new-age global economy offers the most powerful and pragmatic solution to become a small enterprise owner. A solution called ‘Network Marketing’!

Conclusion

It is when you :

(a) find the real purpose in life to pursue a business
(b) get out of your comfort zone
(c) invest time to develop yourself
(d) make a commitment to do whatever it takes
(e) persist at it long enough and
(f) become a leader to teach others do what you did, will you start to see real success in Network Marketing!

For most of the ordinary people out there, pursuing the business part-time for 3 – 4 years until such time the System is created is too very tough! Well, if it is so, it is just a state of mind. Or the reality could be that they don’t really desire to be financially free or crave for time freedom which can enable them to spend as much time they want to with their family and loved ones!

But if you are someone who is 35 years old and are salaried, there is a 999/1000 chances that you would end up working well beyond the retirement age! This means you will work for a minimum of 25+ years going forward! How would you compare that to just 4 – 5 years of part-time efforts in a Network Marketing business that can assure a phenomenal lifestyle and wealth for not only your family but even your larger family and friends!

What business do you know of, that will build into a multi-million dollar distribution network and cost you virtually nothing to start, has virtually no expenses to run it and where the majority of people working it are actually earning a real residual income from it?

In the very near and foreseeable future, many if not most of the products and services will be distributed by individuals owning Small Businesses which would also be called ‘Free-Enterprise’. Such enterprises will belong to the industry called Network Marketing! You now have in front of you, all the information that you need to decide whether or not to be in tune with the future and the trends.

Do make a well-informed decision for the sake of your family! You’ll be glad you did.