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MLM Passive Income BS

passive income for home business marketers

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.
Nuff said.

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
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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But more than this.
You will also be joining a community of more than 1,000 people who are traveling the same pathway as you.

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2 thoughts on “MLM Passive Income BS”

  1. Hi Kim,
    I know what you mean about some “passive income bs” and completely agree.
    However the way I like – and in fact need – to build an online business is in such a way that if I need to become passive it’s OK to do so. I’m building my internet business part-time, alongside running my current offline businesses. Because they (currently) pay me more than the online business, when an offline client says “jump” I say: “Right away – how high?”. I also have a 95 year-old Dad whose business I’m helping with, and doing what I can to keep him company.
    When these take precedence, as they must, the online business has to become more or less passive, and mine can be. But I know some MLM businesses that will demote you if you have to become passive. Poor reward that is 🙁
    When I have spare time, I switch to building the online business. When I’m maxed out – all it needs is for me to place my monthly order, and “be there” for my team.
    But to get into that happy situation there was a period of hard work building up my team, and there’ll no doubt be more bursts of activity when I’m not passive at all.
    Much as your high ticket sales were preceded by work and supporting people. Different approaches with a core of hard work and good rewards.
    Joy – Blogging After Dark

  2. Very well said as usual Kim!
    And I love your leaky bucket analogy, because it so
    accurately describes the situation, most MLM companies
    and distributors, too often find themselves in!
    And like you, I often point out as well. If the worlds # one
    investor, Warren Buffet, averages 20% annual returns.
    You have to be just a tad bit skeptical, when others,
    with nowhere near his wealth or real world experiences are touting
    even higher rates of return!
    Great job as usual!


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