A lot of people think that having a business opportunity for residual income is the answer to their search for a continuous flow of income. They trust that this income opportunity can solve all of their financial worries and live the life they have always wanted. However, some residual income business opportunities are not as promising as you thought them to be.
One of these is the recurring affiliate commissions you earn on membership sites. The generation of affiliate commissions is often considered as the best of affiliate income cash flows but what most people overlook is the retention rate on average by these sites. If you'll do simple math and given all other factors are equal, you can be better off getting a commission once worth $50 for every product which also have a 0.5% rate for refund than getting the 50% recurring commission from a membership site that charges $30 and the normal rate of retention is three months only especially if traffic matters to your business. Here's how you compute it:
($50 x 10 units) x.95 = $475
($15 x 10 units x 3 months) = $450
Another overrated source of residual income is the muti-level or network marketing (MLM) business opportunity. A lot of MLM companies claim that they are the best opportunity for passive income. However, for several reasons and for the past years, this claim is often left unproved. This is not about being against MLM companies but some of them are exaggerated in promoting themselves as business opportunities for residual income. In fact, their lack of focus to do retail selling leads their MLM companies to break down naturally from its foundation. This is the reason why there is a "70% rule" where the distributors cannot re-order until they have already sold or used personally 70% of the products they have previously purchased.
The focus of most networking companies is on getting more people. But how can you manage a group of people if you never have prior experience and, if you have experience, you know that it requires hard work. Since it is normal to some MLM companies to have so many people with very little or no experience in management, it spells disaster. Also, you do not really own the MLM business because you have no real control on how the company works and most MLM companies have clauses for distribution termination which means you are a fired business owner. That's too much for the definition of a residual income opportunity.
Real estate is one of the favored sources of passive income for the recent years. However, a lot of these investors are losing huge amount of money lately. The reason is it's getting hard to find tenants to fill the properties and there is still a mortgage to be paid.
These are some hard truths about residual business income opportunities. You have to know which one really works and suited for you to help you in attaining your goals. Residual income can give you a more stable life in the future but you should not be wasting your time on business opportunities that hide the truth from you. Learn on your own straight facts.
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