Linear vs Residual Income

One of the most difficult tasks as a network marketer is to help people understand why they need a network marketing business. Most people are happy (or so they say) with their hum-drum, go to work, guaranteed income (is it really?), come home and watch TV life. Your job is to plant some seeds of dissatisfaction. One great seed to plant is the difference between what they are earning, linear income and what you are earning, residual income.


Ask prospects if they are earning linear or residual income. They will look at you like you're speaking a foreign language. So, you'll just have to explain (smile).

Linear income is what you earn when you get an hourly wage, salary, commission, or fee. It means that you work hard and get paid once. You do this over and over, the rest of your life. If you are one of the lucky ones, you get to retire at 65 and earn more linear income called Social Security.

On the other hand, if you have an extra million bucks you can invest it and live off the interest. That's called residual income. What? You don't have an extra million?

Can you sing well enough to make a platinum recording or write a NY Times best selling book? The royalties you receive every month are another form of residual income. Can't do those things (then you are like most of us)? Well I guess that leads us to network marketing and the only form of residual income available to the average person.

Residual income is what you earn when you work hard for a period of time and get paid the rest of your life, whether you work or not. In network marketing you may have to work hard for six months, a year, 3 years or more, but it's better than the good old forty year plan.

So there's your explanation of linear vs residual income.

It's a great way to pique their interest. After you have explained the difference, ask them which they would prefer to do, work hard every day for the rest of their life or work hard hard for the next few years and get paid the rest of their life, while enjoying time and financial freedom?

If they respond with the latter, talk with them about your network marketing program.

By the way, which would you rather earn?