What Is Residual Income?

Discussion in 'Network/Multi-level Marketing' started by mydream2, Jan 23, 2013.

  1. mydream2

    mydream2 New Member

    Hi everyone,

    A friend of mine asked me this question yesterday as I began to explain to him about a new business I just recently joined. Many people don't realize residual income is all around us.

    In fact Gas Stations are residual in a sense that we normally buy from same station every week.
    Grocery stores are residual income as we tend to buy our food from same stores.
    Restaurants to think about it, don't you eat at same places most of the time?
    Even our banks are residual as you make deposit to your bank account and banks make money
    off the interest.

    What do you think?
  2. Kyle_K

    Kyle_K Member

    I don't think that's right at all. Residual income is earnings based on continual purchase of a product or service that is predictable. In other words, if you sell someone an insurance policy and they renew the policy every year automatically for 30 years. Then you earn a residual income based on the commission every year at renewal time. If you sell consumable goods and have a high re-order rate (that pays a comission on each re-order) that is cyclical. Then you can predict what your ongoing residual income will be with some degree of accuracy. However, random purchase patterns would not equal residual income.
  3. mydream2

    mydream2 New Member

    Hi Kyle, Thanks for your comment and nice to meet you, I agree with your post as relates to insurance and other affiliate products, however most people tend to use same gas stations, grocery stores, cleaners ect...But you are right these are random purchases. Thanks for your comments. Have an Awesome Day.
  4. nikkinze

    nikkinze New Member

    When people in MLM/Network marketing talk about residual income, they are talking about the income based on the volume of your complete downline.
    This is why depth is so important. When you are in a multilegged network, width gets you early profitability and depth gets you long term income stability. "Residual Income", is not the correct term, but Dexter Yaeger of Amway fame was one of the first to call it that. Rightly speaking residual income is income in the future that comes from work you did today.
  5. FreeCashMan

    FreeCashMan Well-Known Member

    MLM Residual income is the most beautiful thing! If you ever had it and are enjoying it then you know it!
    Building a networking business is not an easy overnight process but it's a rewarding one. Like building residual in a retirement fund, you have to put in and put in and then one day the opportunity to enjoy the efforts pays off...often more sooner than a retirement fund :D

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