Can You Create Passive Income With MLM Programs?
I seem to get pitched daily by people promoting MLM programs offering passive income.
Here is the problem.
If the so-called passive income depends on an army of uncommitted people to produce it, count me out. I’m not gonna hang my hat on a bunch of people who will probably quit in three months.
Essentially an MLM program is built on the backs of thousands of part-time volunteers. Commitment levels are low as evidenced by the fact that attrition rates are high. Some companies lose 80 percent of their new reps each year.
Whilst industry stalwarts like Amway, Herbalife and Nu Skin have built reasonably solid businesses, there are plenty of leaders in those businesses who do not have solid monthly cash flow. After years of trying.
The Leaky Bucket Syndrome
Think of a bucket with a hole in the bottom. To keep it full, you’ll have to keep adding more water to the top. MLM companies are like that. They depend on a constant flow of new members. If recruitment slows or stops, the business will likely fail. So if you are a business builder with your company, and your team is not growing every month, you can say goodbye to long term residual income. It ain’t gonna happen.
Retire With MLM? You’re Dreamin’
Many people join MLM programs with the goal of retiring when the income reaches a certain point. But how realistic is it to retire and live off the monthly cash flow for many years? Not very. Here is why. When a leader leaves an organization, it loses energy. The leader was responsible for building the team, so when his or her presence is no longer felt, it has a serious impact on those left behind.
Years ago I was talking to a leader in Amway. He was an Executive Diamond and before he retired his income was $400,000 a year. In the first year after retirement, his income dropped by 20 percent, which is ok. But here is what happened two years later – his income was down to just $6,000 a month. Hardly the stuff of lifestyles of the rich, famous, and retired.
High Yield Investment, Bitcoin Scams, and Assorted Ponzi Schemes
Let’s not be too harsh on the MLM companies. At least they have a product that people presumably want to buy. Not so with the plethora of dodgy investment schemes that are so pervasive at the moment.
When someone offers you a scheme that promises passive returns of 5 – 30 percent a week, run for the hills. Deny your greed and just say NO. All of these schemes fail. The only question is when will it happen? In a month, 6 months, next year? You don’t know. But fail it will, and you will likely lose all of your money. And if you lured your friends into it, you’ll lose them too. Is it worth it? I doubt it.
Remember this. The world’s greatest investor is Warren Buffet. His average returns have been 20 percent a year compounded. So if the best Warren can do is 20 percent a year, how on earth can fly by night operators generate returns of 250 – 1,500 percent a year?
So here is what you need to do:
Grow a brain, curb your greed, and just walk away.
A Better Way
Lots of home biz folk love the idea of passive income. Nothing wrong with that, but before you create it you need to focus on another type of income:
Active income is about putting in the work now and getting paid for it in the near future. Notice I said ‘near future’?
– Not in 6 months
– Not in 2 years
– Not in 5 years
But NOW (more or less)
The fact is that true passive income is hard to create and slow to build. Most of the people I talk to don’t need passive income now. Rather, they need a way out of their dead-end jobs. Like yesterday.
Only ACTIVE INCOME activities will fit the bill. What are they? Well, there are different options but the two strategies that have worked for me (over and over again) are:
1. Marketing Services For Small Businesses
2. Big Ticket Affiliate Marketing
Let’s look at the later option, big ticket affiliate marketing. I’ve been doing it for ten years now. I promote different affiliate offers but there’s one that’s been a star performer for me since 2013.
Simple Success System That Never Fails
Here is how I do it: I send leads to a sales funnel. Someone buys a small product, and I make a few bucks. Then, someone from an external phone team calls the customer for me. At this point, I am totally hands off.
About one in six of those small ticket customers will upgrade to a higher value product. When it happens, I make $1,000 to $10,000 a sale.
So, my role was simple – to make the first small sale. Everything else has been done for me. My idea of passive income.
Want some for yourself? Click HERE.
(You can work harder or smarter. Your choice.)
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