It’s no wonder so many people don’t understand the value of network marketing: Many of those who are actually involved with it themselves don’t fully grasp the value of what they hold in their hands.
When people go to hear network marketing presentations, often their main question is, “If I join this business, how much income can I earn here?” And no surprise, when you listen to people promote their network marketing business, often that’s exactly what you will hear them talk about: how much you can earn on a per-month basis. But that’s not where the REAL VALUE of network marketing lies.
The problem with earning income is that it’s an incredibly limited, linear process. Work an hour, earn a dollar: work two hours, earn two dollars. It depends on you, which means you can never stop. As I said before, it’s a trap. Most people instinctively sense that, but they assume that the way out of the trap is to earn more income. But earning more income doesn’t change the basic fact of being tied to your income. In fact, often earning more income only serves to draw the noose tighter.
The Power of Passive Income!!!!!
Have you ever used one of those spring loaded water faucets that some public restrooms install to save water? When you turn the water on, you have to hold the faucet there, because when you let go, it bounces back to the off position.
Most people’s income source works just like that faucet: You get a little money flowing, and then when you let go, it bounces back to off. You can never build freedom that way. What you want is a money faucet that you can let go of once you’ve turned it on, because it stays on by itself.
It’s not just about having income today, tomorrow and next week; it’s about securing your income in perpetuity. This is passive income, also known as residual income: income that continues coming in, over and over, long after you finished expending the effort and capital it took to create the source of the income.
If you own a restaurant, you earn income ONLY when you prepare and sell a meal. If your business fixes air conditioners, you earn income ONLY when you provide that service. Even high-salaried doctors and lawyers earn money ONLY when they see patients or clients. If no patients or clients require their knowledge and services in a particular week, the income faucet springs shut again and there’s no money coming in that week.
How to Know Your Asset from a Hole in the Ground.
An asset is something that works for you, so you don’t have to work for the rest of your life. My poor dad always said, “Work for a Job.” My rich dad said, “Build Assets.”
In our Rich Dad business, we have offices throughout the world. Whether I’m working or sleeping or playing golf, the checks come in. That’s passive income: residual income. While I won’t work hard for a job, I’ll work really hard to build an asset, simply because I think like a rich person, not like a working class person.
Because owning a business is owning an asset, when you build a network marketing business, you’re not only learning critical life skills, you’re also building a genuine asset for yourself. In a job, you earn income. In network marketing, instead of earning income, you build an asset—–your business—– and the asset generates income.
I only invest in things that make me money. If it makes me money, it’s an asset; if it takes money from me, it’s a liability. I have two Porsches. They’re liabilities. I own them free and clear, but they’re not putting money in my pocket; they’re taking money out of my pocket. It’s not rocket science.
For people who understand this, the No. 1 asset is usually a business, and the No. 2 asset is typically real estate. And even with real estate, you have to understand the difference between cash flow and capital gain. Most people don’t understand this distinction. When they invest, they invest for capital gain. They’ll say, “My house went up in value. My car went up in value.” That’s capital gain, not cash flow.
The purpose of owning real estate is to keep it as an asset, not to sell if for a profit. If you buy a piece of real estate for $100,000 and then sell it for $200,000, that’s not an asset; you just generated a $100,000 capital gain. You had to shoot the asset to get that money. You’ve killed the asset. It’s like selling your cow for money. I’d rather own the cow and sell the milk.
This is the biggest problem with having a job: A job is not an asset. You can’t sell it on eBay, you can’t rent it out, you can’t take dividends from it. Why spend decades, the best years of your life, working away to build something that is not an asset? Or, to put it more accurately, to build someone else’s asset, but not your own? Because make no mistake about it: When you work at a job, you are building an asset–it’s just not your asset.
We’ve had this idea drilled into us that there is some sort of inherent value in having a good job, but there is absolutely no value in it–zero. And to add insult to injury, the income from your job is then taxed at a higher rate than any other form of income. Talk about the deck being stacked against you!!!
Network Marketing Is Not About Selling Products or Earning Income!
The biggest popular misconception about network marketing is that it’s a selling business. But Selling is just earning more income. The problem is, if you stop the activity, the income stops. That’s not going to build your Wealth or your freedom.
In network marketing, the whole point is not to sell a product but to build a network, an army of people who are all representing that same product or service to share with others.
The goal is not for you or any other individual to sell alot of product; it’s for a lot of people to be their own best customer, sell and service a reasonable number of customers, and recruit and show a lot of other people how to do the same thing.
And here’s the reason you want to build that army of independent representatives: Once you do, you know what you’ll have? An asset that generates income for you–passive income. Network marketing is not about earning more income; it’s about building an asset.
The Power of Your Own Network!
One of the first things that intrigued me about this business model when I started looking into it seriously in the 1990s was the simple fact that it used the word network. I remembered that my rich dad really respected this term. My rich dad told me, “The richest people in the world build networks. Everyone else looks for work.”
From the shipping magnates and railroad barons to Sam Walton, Bill Gates, and Jeff Bezos, the great fortunes of the world have been made by those who figured out how to build networks. Sam Walton didn’t manufacture goods for people; he built the distribution network that delivers the goods. Bill Gates didn’t build computers; he built the operating system that ran on those computers. Jeff Bezos didn’t go into publishing books; he created the online network Amazon.com that delivers those books.
The power is not in the product; the power is in the network. If you want to become rich, the best strategy is to find a way to build a strong, viable, growing network.
Of course, most of us are not Thomas Edison, Sam Walton or Bill Gates, and never will be. Yes, there will be handfuls of remarkably creative pioneers in every generation who create new multi-billion dollar networks from scratch, as these men did, but it’s not a reasonable ambition for tens of thousands of people, let alone millions.
That’s why network marketing is so brilliant. The companies that make up the network marketing industry now offer millions of people just like you the opportunity to build their own network rather than spend their lives working for someone else’s network. By Robert Kiyosaki-SFH..
What Others Say About Network Marketing
Tom Peters, the legendary management expert and author of the classic best-seller In Search of Excellence, describes network marketing as “the first truly revolutionary shift in marketing since the advent of ‘modern’ marketing at Proctor & Gamble and Harvard Business School over 50 years ago.”
Today, network marketing is recognized by many experts and accomplished businesspeople as one of the fastest-growing business models in the world.
The emerging success of network marketing has been written about in such journals as Forbes, Fortune, Newsweek, TIME, U.S. News & World Report, USA Today, The New York Times and The Wall Street Journal. Fifteen years ago, you couldn’t have gotten a single one of these journals to give this business the time of day. Now, look at what a recent issue of Fortune said about network marketing:
“An investor’s dream… the best kept secret of the business world… an industry with steady annual growth, healthy cash flows, high return on invested capital, and long-term prospects for global expansion.”
Warren Buffett and Richard Branson couldn’t be more different. Buffett drives a pickup and lives in Omaha; Branson flies his own airline and lives on his own island in the British Virgin Islands. But they have three things in common. They are both billionaires. They are both extremely practical men. And they have both owned network marketing companies.
Does that tell you something?
Citigroup, Jockey, L’Oreal, Mars, Remington and Unilever: Guess what they all have in common? They’ve all put a toe in the network marketing water—in some cases, right up to their hips.
Today, network marketing is recognized by many experts and accomplished businesspeople as one of the fastest-growing business models in the world.
