Residual Income -- Making Money while You Sleep

What exactly is Residual Income?

"Residual income is the reason that MLM business opportunities can be so lucrative. It's the reason why as many as 10% of new millionaires made their money in MLM... and who knows how many settled for just half a million?"

You're looking into business opportunities on the net, and you keep coming across the term 'residual income'. At first, you ignore it, one more piece in the puzzle that constitutes trying to find ways of making money online. But residual income keeps popping up. It seems lots of people are making a big deal out of this. Probably, it would be a good idea to find out what it means.

Residual income, also known as royalty income, is income that you keep on getting for months or even years after the work you did to earn it is finished. So, for instance, a song writer will get royalties on his song every time it is played on the radio, even years afterwards. The royalty for songs and literature lasts throughout the author's lifetime, plus 50 years, paying a small amount for each airplay, which can add up to a LOT of money over the years. A big hit brings in a huge amount, which gradually fades down to a tiny trickle over the years, depending on the popularity of the artist.

How do you make Residual Income?

Not everybody is a pop singer, though! So why do people online go on about this so much? How can an ordinary bloke earn residual income? Oh, heck, I'm no good at writing stuff...

No, no. Chill. There's no need to worry. The way to earn residual income does not necessarily involve any writing skills at all. For example, you can make residual income as interest on shares. But you may prefer not to invest large amounts of cash in an institution that can drop through the floor and take all your hard-earned savings from you overnight.

Another possibility is investing in property. Buy a house, do it up, and rent it out or sell it on for a profit. A lot of work. A lot of up-front investment. And no guarantee the housing boom is going to continue long enough for you to even get your initial investment back.

But there is another way...

Looking for a Residual Income Opportunity

The way to earn residual income that you have been stumbling across all over the net is almost certainly a variation of the type of business opportunity known as MLM ('multi-level marketing'), relationship marketing, network marketing or referral marketing. There are many of these online, all offering different products, different pay plans, different startup costs and different trading zones.

At first glance, they all seem much of a muchness, but look again and you will find there are many pitfalls for the unwary. It's important to do your homework, and check out exactly what is on offer for your initial investment.

But it's definitely worth the effort. After all, residual income is the reason that MLM business opportunities can be so lucrative. It's the reason why as many as 10% of new millionaires made their money in MLM... and who knows how many settled for 'just' half a million?

Finding a network marketing business

Obviously, the level of investment is a factor for most of us, but in general, you will probably find the required investment is pretty minimal, far less than setting up your own business or buying a franchise. Once you've scraped together enough for your initial investment, it's time to find the MLM for you.

Is it legal?

The first thing you absolutely need to consider is: does this opportunity follow the rules governing network marketing businesses? You probably know that pyramid selling is illegal. Many people believe that MLM and pyramid selling are the same thing. This is not the case, as MLM is completely legal. So, how do you tell them apart?

As a swift rule of thumb: if you earn your money from SALES or from getting CUSTOMERS (or recruiting others who sell or get customers), then it is a legal MLM business; if money is paid out merely for recruiting other REPRESENTATIVES, with no customers or sales involved, then it is an illegal pyramid scam. Steer well clear!

- Pick a product you can be proud of, at a good price. It's much easier to sell something you consider to be worthwhile. How sincere can you be about a shoddy item, or one that is overpriced? Before you can convince customers to buy, you have to convince yourself.

- Pick a market you can sell to. If you're over 50, don't try to sell products aimed at kids under 20. You don't speak the same language or see things the same way. Similarly, if you're younger, products aimed at pensioners are probably not your area.

- Even if you are pitching to the right market, it's also important that you feel right about selling this product to your market. For example, if you have a product that is aimed at people over 60, but you feel bad about selling goods to pensioners for some reason, it would be better choose a different product with a different market.

Once you have eliminated products and services that you can't work with, you will probably find you have reduced your choices to a more manageable number. This is the time to compare the companies you are looking at.

Choosing like from like

Right, so you have a number of network marketing businesses to choose from, all within your investment budget, with products and markets you can deal with confidently. The next step is to check out:

- how much is the initial investment?
- how long does this cover you for? a year? a month?
- is the product a 'pre-sold' consumable? (eg. gas, water, telephone, broadband/DSL, electricity)
- do you need to keep stock? if so,
- do you have to pay for your initial stock ON TOP of your initial investment?
- how much space will you need for storage?
- is this a perishable product? if so, how long before you have to throw it away?
- what is the company's policy on returns?
- is a website included in the package, or do you have to pay extra for this?

In general, holding stock, dealing with deliveries and returns, is a nightmare and best avoided. No matter how wonderful your product, people will change their minds, send things back, and repeat business is not guaranteed.

The best product is what is called a pre-sold consumable; these are products your customer uses regularly, and is billed for monthly or quarterly. So long as your product is well priced and properly supported by the company, you will find the highest levels of residual income from these products. They have the added advantage that you never have to deliver electricity in the rain, or pay a refund for unwanted water and then wait for the company to reimburse you.

You may think a website is unnecessary. But, really, here YOU are trying to find an opportunity on the net. If you do set up in MLM, you will be trying to recruit others to work in your downline. Don't you think a website would be a good idea? Yes, I know you can set one up for yourself, but unless you are wealthy enough to pay someone, or skilled enough to write your own, it's not going to be a patch on what you would expect. You have to have something that can impress a potential prospect. It should both sell your product and act as an aid to recruitment. In the longer term, perhaps you will want to augment your free site with others, but when you first start, a good quality free website is a definite plus.

What about the residuals?

You should look at the potential residual income with care. The main rule to remember is: avoid 'forced matrices'. If you have a choice between one MLM with a forced matrix and one without, go for the one without. The forced matrix restricts your income.

The second rule is: choose the matrix (not forced) with the highest number of levels. The more levels, the higher your residual income will end up. It's a bit hard to explain briefly, so I won't try. All I will say is, you want to be able to go as WIDE and as DEEP as you can. In my opinion, the best opportunity available in the UK and Europe for residual income is Tiscali, which you can reach here: http://www.this1works.biz/index.html
This opportunity is expanding all the way across Europe, from the UK, across Germany and Spain and on via the Czech Republic - well, watch this space!

Venture Capital Negotiating Issues

When companies enter into negotiations with venture capital firms, there are several issues which need to be defined and agreed upon. This article describes the key issues.

Valuation. Valuation is the most prominent negotiating issues. Valuation is the price of the company in which the venture capitalist invests. Valuation determines what percent of the company the investor is buying for their capital.

Timing of the Investment. Many investors will commit a large amount of capital, but will contribute that capital to the companies in installments. Often, these installments are only made when pre-designated milestones are met.

Vesting of Founders' Stock. Like capital, investors often prefer that stock is given to company founders and key employees in installments. This is known as vesting.

Modifying the Management Team. Some investors insist that additional or substitute management employees be hired subsequent to their investment. This gives investors additional security that the company will execute on its business model. An important issue to negotiate with regards to modifying the management team is the amount of stock or options that will be issued to new management team members, as this will dilute the holdings of the founders.

Employment Agreements with Key Founders. Venture capitalists typically do not want companies to have employment agreements that limit the circumstances under which employees can be fired and/or set compensation and benefits levels that are too high. Other key employment agreement issues to be negotiated with venture capitalists include restrictions on post-employment activities and employee severance payments on termination.

Company Proprietary Rights. If the company has an important product with intellectual property (IP), investors will want to ensure that the company, and not a company employee, owns the IP. In addition, investors will want to ensure that new inventions be assigned to the company. To this end, investors may negotiate that all employees must sign Confidentiality and Inventions Assignment Agreements.

Exit Strategy. Investors are very focused on how they will “cash out” of their investment. In this regard, they will negotiate regarding registration rights (both demand and piggyback); rights to participate in any sale of stock by the founders (co-sale rights); and possibly a right to force the company to redeem their stock under certain conditions.

Lock-Up Rights. Venture capitalists may require a lock-up period at the term sheet stage. The “lock-up period” is typically a 30-60 day period where the investors have the exclusive right, but not the obligation, to make the investment. Investors typically conduct due diligence during this time without fear that other investors will pre-empt their opportunity to invest in the company.

Each of these issues are critical when raising venture capital, since the outcome can significantly impact the success of the venture and the wealth potential of the company founders and management team. Because venture capitalists are very knowledgeable regarding these issues, and have great skill in negotiating on them, companies who are raising venture capital should seek advisors who also have this experience and expertise.

E-currency Exchange Trading

I have searched high and low and tried MLM's such as Market America, Quixstar, Trek Alliance and Amway. The business idea works, however people need to sell products and build their downline to be successful. I hated the idea of trying to convince people that Market America, Quixstar and all the other MLM's worked. In fact, that was the hardest thing to do was to convince somebody that these MLM's worked!

I have finally found a system that involves no selling, no downline and and garunteed profits with a little learning involved. I thought this couldn't be true, I actually don't have to sell something and didn't have to build a downline!

Let me explain how it works. There are hundreds of companies on the internet that deal with electronnic funds, such as Netpay, PayPal and INTgold. Currency exchanging is relatively unknown but incredibly lucrative business opportunity. While Currencies are traded all over the world (like with Forex), there are both US-based and offshore trading houses that need your flow of dollars to facilitate their business operations.

This is where you,"The Merchant" comes in. By making funds temporarily avaliable to the Global Exchange Network creates float. The company we work with is able to borrow against this dollar amount and the commissions come back to us. The funds you lend to the network are typically returned in a 24 to 36 hour time frame. For example, by pushing $100 in INTGold to another person in exchange you recieve a fee of $3.50. This process takes about 30 seconds. When the funds come back into your account you make another $1. $4.50 isn't bad for something that takes 15 seconds to do. There are other ways to cycle this money back through the system and reinvest profits to your bottom line. On top of building float, your investment is compounded daily and you easily make gains of .35% off of your investment per day. How much is that? Well if you invested $100 that would be 35 cents per day profits. Now imagine when your investment grows to $1000 and $5000.... even $10,000 your daily profits are easily $35 per day. Remember the best part about this is that is compounded daily!

How much can you start with? You can start with as little as $25.00 I recommend a few hundred dollars until you get to know the system and become more comfortable with the exchange network.

I learned the e-currency exchange network through a group of friends online. It is extremely difficult trying to learn how to do this sitting in chat rooms and reading posts. I finally gave in and purchased a guide that literally enabled me to double my investment in under a month. I am very pleased with my results and I can now kiss those MLM's that require downline building and selling goodbye forever!

Double Your Business Results Using The Penny Model

Doubling your business results is much easier than many you realize. Especially, when you can implement a simpler process, you CHANGE how you THINK. Before explaining how to double your business results, I would like to share with you the penny model. Using this approach YOUR business results DOUBLE in 30 days.

Beginning on Day 30, you now have a penny. By Day 60, your one penny has grown to 2. Within 3 months or 90 Days, you have 4 pennies. Are you starting to get the picture?

Continuing on with the Penny Model, your fortune starts to look something like this:

Day 120 – 8 pennies
Day 150 – 16 pennies
Day 180 – 32 pennies

Six months have now flown by and you have increased your penny 32 times. Wow! And you thought doubling your business was not possible.

Day 210 – 64 pennies
Day 240 – 128 pennies
Day 270 – 256 pennies
Day 300 – 512 pennies

Ten months later your efforts are now securing a 512 return from that initial first penny. Yet, the best is still to come.

Day 330 – 1024 pennies
Day 360 – 2048 pennies

A year has now passed and that one, single penny now has the value of 2,408 pennies, far more than doubled. And even if for some reason, you didn’t achieve 2,408 pennies, would you complain if you only had 128 or even 32? I think not.

Okay, “So what does that mean for my business?” you may be asking yourself right now? Plenty and let me explain why.

Let the penny represent your daily actions or activity. For example, you call 100 people, speak to 20 of them, schedule 5 appointments and receive one sale. By increasing your calls on a daily basis for the next two weeks to reach another 10 people each day, you will have another sale at the end of two weeks.

Or maybe you currently schedule only 3 appointments per week and it took you 50 dial ups (number of time attempting to contact a potential sales lead) from the previous week to secure those 3 appointments. By doubling your dial-ups to 100 per week, you would now have double the appointments to 6. Given your close ratio, you could easily double or triple your business within a very short time.

Even if you believe that you can’t double your phone calls (your belief system may be another reason why you can’t double your results and that’s an entirely different article), consider what would happen if you increased your performance by just 10%. A 10% increase in effort, which isn’t that much more, can be compared to a penny to a dime or a dime to a dollar.

If I am currently averaging $52,000 in sales per year, 10% would mean an additional $5,200 or just $100 more per week. Using your sales and tracking numbers, which I am sure that you have, you will know exactly how many calls you will have to make to increase your weekly sales. Maybe it is just a case of up-selling or even asking a good client for a referral.

The Penny Model is a very simple way to see how quickly your activity can double your business results. All you need to do is to keep an open mind and look to the possibilities instead of limitations. Of course, a proven goal setting and goal achievement action plan probably wouldn’t hurt either.