Imagine that everyone in this country was savvy in financial education and knew that working a J.O.B. was not the path to financial freedom.
Imagine then that everyone (well, all adults having attained the legal age for signing contracts, anyway) picked a network marketing company to represent, the one that fit their preferences best.
Imagine further that even more products and services were available as direct sales opportunities to fill the demand by potential representatives.
I can see that if the above were true:
- we all would expect, support, and encourage our family and friends to market their products or services to us,
- we all would seek out the products and services we need from among our family and friends,
- each of us could be living at least comfortably, depending on how much effort we put into our chosen MLM, and
- we all would have more hope for the future, because we would know we were building passive income streams.
Of course, we still would need people to work jobs. This country still needs to manufacture goods and provide products and services that require on-site contact. Police, fire, and health care services, as examples, cannot be provided in a network marketing structure (although insurance can). Even the network marketing companies themselves need to employ staff to run their infrastructure. The need for en employment base is never going to go away. But if everyone did have that MLM in their portfolio, at least as a part-time supplement to their employment income, we would all be more financially secure.
This is just a short treatise on this "Imagine" scenario, but can you see the point I'm trying to make? Can you think of even more benefits of such a situation? Do you see any "flies in the ointment"? What do you think?
Thanks for pondering today's lesson. I'll see you on the road to prosperity real soon.
Today's post will be a fairly quick update of how things are going in the Convoy, rather than a financial education lesson. Remember, I promised to use this blog to do both. Anyway, on to today's developments.
Whoa! I just had a lunch meeting that blew my mind! I went in expecting to learn more about--and sign up for--one network marketing company, but found out about another that looks even better! I'm not going to name either company here, because that's best done in another forum. I don't want to use this blog to promote any specific company or companies. But please take from this story that it's good to be flexible and to evaluate opportunities as they arise. Don't just select one course of action, put your blinders on, and charge forward with no view of the possibly changing landscape ahead.
Now, once you do select a course of action, it is best to commit to that course and give it your all in order to build your business. Don't try to build more than one business at a time. I'm able to switch gears at this point because I hadn't committed to my original choice of network marketing company just yet. As I stated earlier, I was just going to sign up today.
Well, it looks like I digressed with a little business lesson there, after all. OK, not a bad thing. But let's get back to my story.
As I mentioned up top, I went to a lunch meeting today to get started with one company. I met with my sponsor and her sponsor, a.k.a. the first two people in my immediate upline. To protect the innocent, let's just call them "Jill" and "Tim", respectively. (Any other Home Improvement fans out there?) Anyway, as I sat down and we got started, Tim said, "I have some news". I thought maybe that the company had some new, exciting products or compensation plan details. Instead, Tim told me that he had been introduced to another, new company (and its product) and had left company number one. Not that he no longer believed in company number one--it's still a very exciting opportunity with terrific products--but it is easier and quicker to make money with the new company. Which is the point, after all, right?
For the rest of the lunch, Tim filled me in with the nutshell version of the new company's product and plan. Jill has already also joined Tim's downline, and I like what I've learned so much that I'll be following suit. Timing is everything, and for once I have some. The company is holding an informational meeting tonight, so I'll be able to get the full scoop and sign up right away.
So that's my story of today's surprising development. It's still the road to prosperity, but I'll be taking a different lane from here.
In a further development, you can now find the Convoy on Facebook. Just look up and "Like" Trucker John's Prosperity Convoy on there for another way to follow along as we work our way up through the gears. (Thanks, P.J. for the tip to create the page.)
Thanks for checking in today. I'm very excited about this new opportunity, and expect good things from it. And remember, I'm doing this because I want to help you build passive income to secure your financial future. A convoy's not a convoy with only one vehicle. So if you're ready to leave an uncertain future behind, start your engines and drop me a line. I'll see you on the road to prosperity.
*** EVENING UPDATE ***
I just returned from the information meeting for this new business opportunity, and it's even better then it seemed this afternoon. Both the product and the business opportunity. I'm all signed up and ready to get going. So stay tuned for updates on the Convoy's progress in this new business.
So far in this blog I've been touting Network/Multi-Level Marketing (MLM) as the preferred method for creating passive income. It's still true that it is the preferred method--well, I prefer it because of relatively low entry cost and little risk--but it most certainly is not the only one. Today I want to discuss another potentially lucrative passive income stream, and that is real estate.
A few years back, right before the housing bubble blew up in everybody's faces--good timing, right?--I was trying my hand at investing in real estate. I had read the Robert Kiyosaki Rich Dad books and latched on to his success with real estate as a means to build income and wealth. But I didn't study his methods fully and went at it the wrong way.
Real estate investors, in a nutshell, employ two methods for generating their income: flipping, and buy-and-hold. In flipping, the investor basically acts as a dealer. He locates properties he can buy cheaply, and sells them to another investor or an end-user for a higher price. He may or may not invest in some improvements to the properties. Flipping can be quite profitable, but it does not generate passive income, which is what we're looking for in the Prosperity Convoy. In order to make more income, the flipper needs to be out buying and selling more properties. If he doesn't do that work, he gets no income.
The buy-and-hold investor, on the other hand, buys properties with the intention of holding onto it and generating income from renting it to tenants. Her focus on obtaining such properties is the cash flow they will generate; in other words, the amount of monthly income (rent or lease payments) above expenses. The cash flow from the sum of the properties in her real estate portfolio is her passive income. Once the properties are in hand and tenants in place, she can sit back and enjoy the income (assuming she has enough properties to throw off enough income to support her lifestyle). Oh, and she will have a good property management company taking care of her properties to further make that income passive, to keep her from working for that income.
Back when I was dabbling in real estate, most of my focus was on the quick-hit, big strike--flipping. I forgot about (or was too impatient for) Kiyosaki's focus on building passive income. And in those days I also met and befriended many other real estate investors, many of whom like flipping as their modus operandi. And flipping, as I mentioned earlier, can provide quite the pretty penny; some of my flipper friends are doing pretty well at it. The downside is the need to keep churning the business to earn that penny.
Buy-and-hold has its downside, too, and that is tenants. Bad tenants can be the bane of the landlord's existence, for just too many reasons for me to go into here. And let's not forget about vacancy periods, during which the landlord has no tenants occupying--and paying for--the property. No tenants, no passive income. Active outgo is more like it in that case.
Tenants and vacancies are major reasons why I prefer Network Marketing to real estate. But if they don't deter you (and you have a good property management company), buy-and-hold real estate can be a tremendous passive income stream. And if you enjoy the hunt for cheap, distressed properties, flipping may be for you. But for flippers and buy-and-holders both, you may consider adding an MLM income stream to your portfolio.
Consider what the added passive income from a good MLM can do for your real estate business. First and foremost, it can provide much more cash with which you can buy more and more properties. Secondly, if you're going the landlord route, you can introduce your tenants to the opportunity, improving their lives and their ability to pay you if they join up.
Obviously, you're not limited to any one passive income stream. The Convoy's emphasis is for you to find the one you like and to give it all you've got to build that passive income. Once you get that one up and running (supporting your lifestyle), then you can add another if you so desire. Multiple streams of passive income are a beautiful thing.
So that's my nutshell take on real estate investing. The way the market is these days, an investor can do quite well. Good properties can be found CHEAP in some markets, making good monthly cash flow quite possible, if not probable. If you decide to pursue real estate, or already do, I wish you well. Just remember to focus on that passive income.
Thanks for looking in today. Let me know what you think about all this. And I'll see you on the road to prosperity.
As I'm writing this on July 4, I want to wish you a very happy celebration of the United States' independence from English rule. What a better day also to wish for you a happy financial independence day, that day when your passive income surpasses your expenses. When that day arrives, you'll be able to say goodbye to the daily grind of a J-O-B and live life on your own terms and schedule. (If you love your job and want to keep doing it, then good for you. Keep at it and use your extra income for a better lifestyle and good works.) I'm not going to include a new lesson in this post; instead I want to reiterate why I write and publish this blog in the first place.
First and foremost, it's because I want you to reach financial freedom. When I learned all that I did about financial education, my eyes were opened wide. I realized just how ignorant I had been to the world of personal finance, and how we all completely miss this information by going through the normal routines of daily life. That is, main-stream, "conventional" wisdom about personal finance is 180 degrees opposite what we really need to do to build a secure financial future. So it's like when you find a new restaurant that blows your mind, or see a movie that pushes all the right buttons for you, you just have to share that information with all your family and friends. For me, when I realized what the truth was about finances, I had to share it.
You know, what I'm "teaching" you here is really very simple and obvious, once you open your mind to it. The hard part is making the leap to open your mind and discard the conventional wisdom you've been taught all your life, "Go to school, get a good job, save for retirement." And then it's hard to take action to put yourself on this new road, for fear of what your family and friends--who are still stuck with the conventional wisdom--will say about it. But don't worry about them; you need to do what's right for your future. And guess what: you can start to educate them about building passive income, and bring them right along with you on the road to prosperity.
So please share this information with everyone you care about. As the Alan Parsons Project song Turn It Up says, "If there's something you've found you believe in, then the message must get through." Point them to this blog, buy them the Rich Dad books (or lend them your copies after you've bought and read them), and invite them to join your MLM downline. But make sure you're doing it for them, because you care for them as you do. There's an adage in business that if you help people (your customers, in the usual business sense) get what they want, then you'll get what you want. So make it about those people you care about, your "customers", and the universe will see fit to reward you in kind.
Happy Independence Day once again. Thank you for lending me your eyes (and hopefully an engaged mind, as well). I look forward to celebrating your financial independence day with you.
Previously on Trucker John's Prosperity Convoy, I told you that in order to secure ample retirement income for yourself, you need to build passive income. And your best bet is through Network Marketing, a.k.a. Multi-Level Marketing. In this episode, I'm going to tell you just what Network Marketing is, what it is not, and how it can be even better than you ever would hope.
Let me start with what Network Marketing is not. (As an aside here, I'm going to use the abbreviation "MLM" for Multi-Level Marketing from here on out in this post instead of typing out either whole name for this business form.) It is NOT a pyramid scheme, as many would have you believe. Well, OK, the good, legitimate MLM companies are not, though I'm sure there are some bad, illegitimate ones that may well be pyramid schemes.
In a true pyramid scheme, the operator takes the money ponied up by the people entering the bottom of the pyramid to pay off the people at the top. Think of Bernie Madoff's modus operandi for the prime example. A legitimate MLM sells products and/or services to generate the income that gets distributed to its representatives. If nobody buys the products, nobody gets paid. It's as simple as that. But what exactly is an MLM, and why do people think they are pyramid schemes?
The business model of an MLM is to have independent representatives ("reps") make up its sales force, rather than hiring a sales staff and paying advertising costs, and so forth. The reps go out among their family, friends, and people they meet and sell not only the MLM parent company's products, but the MLM rep opportunity as well. (That's where the confusion with a "pyramid scheme" comes in.) The MLM then pays the rep commissions on her sales. But to reward the reps for bringing in more reps (and, it follows, more sales), the MLM also pays each rep commissions on the sales made by the reps she brought in, as well as those made by the reps her reps brought in, and so on down the line. With no limits on the amount of customers a rep can sell to, and no limit on the number of reps she can bring into her "downline" those commissions can add up to a healthy income. But a good MLM can be much, much more for its reps.
Besides providing the goods or services to sell, a good MLM will also provide all of the training, marketing materials, and support a rep will need. It will foster a culture of community, in which each member of the MLM, from the people working at the parent company down through reps at all levels, truly wants each rep to succeed, and will help out to make that happen.
So consider that business model, and compare it to that of a "traditional" company. In the traditional company, you have a CEO on top, then layers of "lesser" employees below, with each successive layer wider than the one above. Sound like a pyramid to you? And do the employees at each level truly want the other employees to succeed, other than to do their jobs well so the company can profit and they can keep their jobs? And can employees at these types of companies give themselves raises by going out and finding more customers and more employees? In the immortal words of Al Borland, I don't think so, Tim.
Those are the MLM pros and cons in a nutshell. Oh wait, I didn't give any cons. Let me add them here:
- Individual results may vary
- The rep's results are a direct result of his/her efforts
- It may take some time to build up a customer base and downline sufficient to provide a healthy income stream
- You do have to sell some products in order to succeed
- There is usually a "buy-in" cost to become a rep, and it may seem a little steep to the newcomer (but in the long run, if the rep is successful, it will seem like peanuts).
That's all I can think of as far as cons go. Not too terrible, eh, if you find an MLM whose products and opportunity excite you.
Speaking of which, I have found that MLM that excites me, but I'm not going to promote it on this site. (If you are one of my friends, you may be hearing from me soon, though.) Many excellent MLMs do exist "out there", and I urge you to do some research to find the one that best suits your interests. The model really does work; I know a few successful MLM reps personally--and know of many others--who don't have to work "real" jobs because their MLM income is enough to give them financial freedom. And many hugely successful people say that if they had to start over from broke, they'd start out in an MLM. Donald Trump is one who comes to mind. (No matter what you think of him as personally or politically, you gotta' admit he knows business.)
So there you have Part 2 of how to build a secure financial future. Thanks once again for taking a peek at what I have to say. Comments are welcome and encouraged, as always. I can't wait to see you along side me on the road to prosperity.
How many of you have heard the advice, "Go to school, get a good job, work hard, and save for retirement"? OK, the whole room then.
Now, those with your hands up (which is all of you), how many believe that advice to be gospel and are following it diligently? OK, only a few hands went down. The rest of you can put yours down now, too. That's all the questioning for now.
So we see that the conventional wisdom for financial security in retirement is to work hard at a job for 40-plus years, and regularly put away some cash in some sort of an account to grow until you're ready to use it. Sounds good, because you're planning for your future. Nothing wrong with that. But if you want to have a financially free retirement, without cutting way back on your lifestyle, that just doesn't add up. Let's do the math.
Say you work for 40 years and save 10% of your income (more than likely 10% of your take-home pay, or your net pay after taxes and deductions) every paycheck. It doesn't take a genius to calculate that you've saved enough to live for four years at your average income from those 40 years. Don't you want to have a longer retirement and at a better lifestyle than that?
"But," you say, "I'll have fewer expenses when I retire. No more gas and wear and tear on the car for a daily commute; my house will be paid off so no more mortgage payment", and so on, and so on. "Also", you add, "my retirement account will be growing, thanks to compound interest and good investments. So I'll have much more money in there."
All right, consider these questions and, more importantly, their answers:
- What interest rate are banks paying these days? Um, maybe a whole percent.
- What's the current inflation rate? Somewhat higher than one percent.
- Is there any historical precedent of the stock market losing a large chunk of its value in no time at all? Oh yeah, a few, including real recently.
Still feeling good about that nest egg's chances to provide for a retirement lifestyle of which you're certainly going to be deserving after 40 years of hard work?
Before I continue, let me point out that it is a good idea during your working years regularly to sock away some cash for retirement. Who wants to retire with an empty bank account, after all? But the retirement account cannot be your sole source of support during your golden years. It must only be one part of your plan. Especially since, now that you're free to get out and see the country and the world as you please, you want to be able to afford such junkets. So what else can/should you do to secure your financial future?
Passive Income
It's as simple as that. If you want plenty of income to support a full retirement, then during your working years you must invest time and some money to build streams of passive income that will continue working even as you no longer do. Imagine waking up on the first day after you've called it a career and knowing that you're still going to have "paychecks" coming in, the rewards of your efforts of years past to build those passive income streams.
OK, I guess I'd better define "Passive Income" for those of you who may not know the term yet. Passive income, sometimes also called residual income, is that income you earn over and over again as a result of work you did once. For example, an author writes a book once, and over time continues to receive royalties from the sales of the book. Or a musician records an album once, then receives royalties from that album's sales over the years. Or a salesperson sells a product or service to a customer once, then continues to receive commissions on the sale as the customer uses--and pays for--the product or service every month. This last example is likely your best bet for building your own passive income, unless you have mad writing, musical, or acting skills you can take to those endeavors. And let me also point out that, if done correctly, building a passive income stream or two may enable you to retire much sooner than you thought possible. Would you have a problem with that?
So now, I'm sure, you want to know how and where you can get in on this passive income gravy train so you can start securing a more-than-comfortable retirement for yourself. The answer may (or may not, depending on how many of my previous posts on this blog that you've read) surprise you: it's in a business form known as Network Marketing, or Multi-Level Marketing.
Taking a cue from television season-ending cliffhangers, I'm going to end this entry right here in order to keep it from getting too lengthy. Be sure to read the follow-up entry, "The Social Network", which I'm going to get right to work on and post ASAP.
Thanks for reading this entry all the way through, and I hope I'm proving to be a valuable resource to you. Please give me some feedback (Input! Need Input!) in the form of a Comment (below), and I'll see you in the Convoy on the road to prosperity.
