MLM Residual Income Fact And Myth

June 11th, 2008 | by Chris |

MLM Network Marketing as a home business opportunity attracts a lot of people, from those who just want to earn extra money to those who want to create residual income and retire. Of course, the industry is more known about the latter, since many distributors promote their income opportunity as a way to passive income and financial freedom that separate it from any other money making opportunity out there.

But before we get into the fact and myth that surrounds that concept in multi level marketing let’s first see what is residual income. The definition according to investopedia is nothing more than the amount of income that an individual has after all personal debts, including the mortgage, have been paid. And this calculation is usually made on a monthly basis.

So in our case when we talk about MLM residual income we talk about such income that comes from multi level marketing business activity.

Coin Stacks
Photo by Darren Hester

Now notice that the definition talks about monthly basis so it is an ongoing income. But it does not define how it is derived. You could as well work at home 20 hours a day to make that money. And here comes the myth as many distributors in network marketing when they talk about that subject they confuse residual with passive income. But those two are not the same, as the term residual does not imply passivity.

I used to make that mistake and confused it with passive income for years as I was just repeating what I was told from my upline and today the majority of MLM distributors still use it incorrectly when they are talking about or presenting their business opportunity to a prospect.

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