Your nest egg is great, I’ll take the chicken!
The tradition for the last century has been to finish school, go to work until you retire, then live off of your own retirement nest egg, social security and any pension you might have. It is no secret that social security is woefully under-funded for today’s economy and pensions have all but disappeared from the workplace. So you are left with your own nest egg, which is likely nowhere near sufficient. A recent survey of Americans showed that a majority of respondents (52 percent) said they need a clearer picture of the income they will need to maintain the lifestyle they expect in retirement. Yet an even greater number, 54 percent, said they did not currently have a plan that identifies those needs, the income that their retirement savings can be expected to produce or how to generate the additional income needed to close any gaps.†
The solution, or chicken, is passive income. This is income that does not require your direct involvement. Some kinds of passive income you may be familiar with include owning rental property, royalties on an invention or creative work, and network marketing. If you want to earn more, work less, and have a decent retirement, you're going to have to start creating income streams that do not require your direct involvement. Whether you're just starting your business, or you've been running it a while, the sooner you start thinking about how you are going to shift your business model to create more passive income, the sooner you can achieve personal and financial freedom.
The Hen, Residual Income
Residual income occurs over time from work done one time. Some examples include:
- An insurance agent who gets commission every year when a customer renews his policy
- A network marketing or direct sales rep income from her direct customers when they reorder product every month
- An aerobics instructor who produces a video and sells it at the gyms where she teaches
- A marketing consultant who creates a workbook and sells it in e-book format with an online store
- A photographer who makes his photos available through a stock photography clearinghouse gets a royalty when someone buys his photo
- A restaurant or retail owner who has grown to the point of hiring a trustworthy manager
There are many different ways to generate residual income across a wide variety of businesses. It may be recurring income from the same customers, or the sales of a product to new customers. It may require no personal involvement whatsoever, such as an e-book sold on an online store, or it may require some personal interaction, such as the insurance agent calling the customer to remind them about their renewal and ask them if they want to change any of their coverage. Often, it's something that you can delegate to an assistant.
The Rooster, Leveraged Income
Leveraged income uses the work of other people to create income for you. Some examples of leveraged income include:
- An e-book author selling her e-book through affiliates who promote the product
- A network marketer who builds a downline and receives commissions on the sales made by people in his downline
- A general contractor who makes a profit margin on the work done by sub-contractors
- Franchising your business model to other entrepreneurs (the ultimate leveraged income)
The key is that you are making money off of other people’s labor
There are many different models in many different businesses. The key is that you are making money off of other people’s labor, rather than primarily your own. Note that leveraged income may or may not also be residual income. When you combine them, that’s even better. Initially, these examples require your direct participation to get it started. Once you help your own sales people recruit others, the process can repeat over and over again, and your business can literally go on auto-pilot.
Every system has its limit of repetition, so it is important build “wide,” not deep. Too many network marketing type opportunities stress the depth mentality when in truth the faster you build deep, the faster you cut yourself out. Many network marketers get caught up in this and the thinking that they just need to recruit one big hitter and they will be set. This is false. Even if you successfully get that big hitter in, he is going to do the same thing and in a short time, you are too far away from the action to get a piece of it. Building wide solves all that. Your sales force should consist of 20 to 50 sales associates, hard workers trying to build their own sales force of 20 to 50 associates and all the while building a direct, personal customer base. Imagine a team of 50 sales associates, all with their own customer base of 1,000 persons, not to mention your own 1,000 customers. Customers should always outweigh sales associates by 20 to 1 to make an organization capable of useful income.
Leveraging Online Stores to Create Residual Passive Income, the Nest Chicken!
There is no question that online shopping is continuing to increase year after year. Online shopping accounts for a growing majority of all economic transactions in the marketplace today. It is this growing segment of the economy that is key to building, not your nest egg, but your nest chicken! ARCI Shopping & Fundraising along with its marketing partners allows you to license your own site that will being building passive income for you. You earn money not by selling to others but by letting them buy what they are going to buy anyway, they just do it through your licensed cash back shopping gateway. Your gateway gives your shoppers a reason to use your gateway, in the form of cash back rebates, and it generates commission for you with every purchase.
† Source: BusinessWire
