Network Marketing, also known as Multi-Level Marketing, is one of the most discussed business models of the last 50 years. Why is this model so popular? For one, it is one of the most lucrative and ethical ways to do business.

Are you surprised at that statement? Let me explain.

The corporate structure, as we know it today, is set up in a way that does not allow the typical, middle-income, employee to achieve wealth. Corporate restricts us in two ways.

  1. It does not allow us to leverage our time.
  2. It does not allow us to collect residual income if we choose to stop working.

Here is a definition of residual income by Marty Foley.

Residual income (also called passive, or recurring income) is income that continues to be generated after the initial effort has been expended. Compare this to what most people focus on earning: linear income, which is “one-shot” compensation or payment in the form of a fee, wage, commission or salary.

Linear income is directly proportional to the number of hours invested in it (40 hrs. of pay for 40 hrs. of work), but one of the great advantages of residual income is that once things are set in motion, you continue making money from your initial efforts, while gaining time to devote to other things… such as generating more streams of residual income!

Why does the CEO make so much money in corporate? Well, for one, he makes decisions about how his employees will work to achieve what he think their effort will achieve. To put this in perspective, here is an example.

During the course of a day, CEO, Mr. Sam, implements a system where the completion of each task will be double checked by another employee. This is a little extra work for his employees, but he thinks their extra effort will be worthwhile.

At the end of the quarter, mistakes are minimized, quality work has increased - and this results in increased revenue for the company, and deservingly, a increased pay for CEO, Mr. Sam.

Let’s take a look at this scenario a little bit closer:

Even though it took Mr. Sam 8 hours to devise this system, he used the effort of 100 employees to make this system work. If this effort took each employee 20 minutes extra a day, then for a week, the system utilized 167 hours of work.
For a month - 668 hours
For 3 months - 2004 hours

So at the end of the quarter, Mr. Sam spent 8 hours was rewarded on 2000 hours of his employee’s efforts! This is the power of leverage - Being rewarded from your initial effort and the continual effort of others.

In network marketing, EVERYONE, has the potential to be rewarded for their initial effort and from the continual effort of others. And even better, you’ll continue to be rewarded long after, months, years even, after you choose to stop working.

For some great reading on this amazing business model, grab the following:

  • The Greatest Networker in the World
    By John Milton Fogg

  • MLM Nuts & Bolts
    By Jan Ruhe

LaToya Roomes is a business owner and runs her home business primarily on the internet. She coaches and trains other buisness owners how to market and leverage themselves using the world wide web. Read her personal bio at http://www.acceptwealth.com.