Network marketing and the employee mindset

Last time, we talked about the cash flow quadrant. Most of us learned how to be an employee through our formal education. Because of that, we often carry the employee mindset into network marketing.

An employee needs direction. The employees told what to do, when to do it, and how much they will be paid for doing it. In network marketing, we become business owners, not employees. Unfortunately, for many people the employee mindset still dominates. For that reason, expectations are unrealistic and often unmet.

Network Marketing and the Cash Flow Quadrant

Robert Kiyosaki , author of Rich Dad / Poor Dad, believes network marketing is a means to achieving wealth.

In the Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide to Financial Freedom
, he explains the four income styles used by people today:

The quadrant looks like this:

E | B
S | I

The E stands for Employee, the persona that our educational system creates (“Get a good education so you can get a good job”).  The employee does not own his or her job.  It is not an asset that can be sold or transferred.  The employee agrees to do what the employer says in exchange for the employer’s money.  The employer may terminate the arrangement at any time.

The S stands for Self-Employed, or small business owner. In this quadrant, the boss and the employee are the same individual. The small business owner might have one or two other employees. In any event, the income depends primarily on the owning individual.

The stands for large Business owner. Kiyosaki defines a large business as having 500 or more employees. The income here no longer depends upon the owner, but upon the employees. J Paul Getty once said “I would rather have 1% of 100 individuals efforts than 100% of my own.”

The I stands for Investor. The investor has money working for him while any of the three previous ones can in fact invest money, what Kiyosaki means here is large amounts of money invested

Notice that the left side of the quadrant is active income or sometimes called linear income. That is, the individual puts forth effort and receives income. When the effort stops, the income stops. The right side of the quadrant represents passive income. The individuals efforts do not determine the passive income. Rich people have people working for them or money working for them or both.

In network marketing, a person can move from the E quadrant to the quadrant with very little capital investment. The individual grows an organization of well over 500 people by starting with one person and teaching that person to do the same thing. If each individual finds one new person each month, at the end of the year our hero will have personally enrolled 12 others. The first person enrolled will have enrolled 11 others. Two people will have enrolled ten others.  Four people will have enrolled nine others and so on, resulting in over 4,000 people in the organization. The magic is in the duplication.

What You Should Know at Christmas

First, let’s not worry about whether December 25 is the correct day to celebrate. That just does not matter. What does matter is that God became flesh and dwelt among us. What also matters is why He did that. In the Gospel of John is the answer (John1:9-14 and John 3:16).

The Word became flesh and blood,
and moved into the neighborhood.
We saw the glory with our own eyes,
the one-of-a-kind glory,
like Father, like Son,
Generous inside and out,
true from start to finish.

This is how much God loved the world: He gave his Son, his one and only Son. And this is why: so that no one need be destroyed; by believing in him, anyone can have a whole and lasting life. God didn’t go to all the trouble of sending his Son merely to point an accusing finger, telling the world how bad it was. He came to help, to put the world right again. Anyone who trusts in him is acquitted; anyone who refuses to trust him has long since been under the death sentence without knowing it. And why? Because of that person’s failure to believe in the one-of-a-kind Son of God when introduced to him.

Zacharias and Elizabeth were childless but God fixed that for them (Luke 1:5-25) In the sixth month of Elizabeth’s pregnancy, her cousin Mary receives word that she (a virgin) will conceive.  She immediately goes to Elizabeth until the baby John is born. (Luke 1:26-58).

By now, Mary is three months pregnant and is beginning to show.  Joseph (her fiance) is upset and plans to quietly end the relationship until he is visited by an angel (Matt 1:18-25). The last verse summarizes the birth event, which is more fully explained in Luke 2:1-38.  Because the law required a cleansing period and presenting the baby in the Temple, Joseph apparently found lodging (as a carpenter, he may have constructed a house for them).

After about two years, some visitors come from the East.  They had seen something in the heavens on the birth date and organized an expedition to Israel.  Because they knew the new child would be a king, they went to Jerusalem. (Matt 2). After they left the palace, a star appeared leading them to the house in Bethlehem where the child (not baby) was,  God warned them not to return to Jerusalem and warned Joseph to flee.  After some time, they returned to Nazareth.  This is summarized in Luke as:

When they finished everything required by God in the Law, they returned to Galilee and their own town, Nazareth. There the child grew strong in body and wise in spirit. And the grace of God was on him.

So this season we give thanks to God that He had a plan to redeem mankind, remembering that (Hebrews 1:1-3)

Going through a long line of prophets, God has been addressing our ancestors in different ways for centuries. Recently he spoke to us directly through his Son. By his Son, God created the world in the beginning, and it will all belong to the Son at the end. This Son perfectly mirrors God, and is stamped with God’s nature. He holds everything together by what he says—powerful words!

Merry Christmas



Leverage: The Key to Wealth

Leverage occurs when you have money working for you or people working for you. You begin your work life by trading your time and effort for money.  A part of all you earn is yours to keep.  If you set aside, say, ten percent of your income for future expansion, you begin to create wealth.  In ten months you accumulate the equivalent of one month’s salary.  In five years, you would accumulate six month’s salary. In fifty years, you have six years of salary.  We measure wealth in time before the assets run out.  Assuming you could afford to live on half of what you were earning previously, you have twelve years banked.

I just described the forty to fifty plan.   You work 40-50 hours each week for 40-50 years of your life so that you can retire on 40-50 percent of what you were previously earning.

Ask yourself:  How are you being paid?  Who had the money to pay you?  Why would he or she do that?  You struck a bargain to provide useful labor in return for the money.  Is that all you are worth?  Probably so, initially.  As the value of your labor increases, so should your earnings.

How to Generate Passive Income

There’s an old saying:   If your outgo exceeds your income, your upkeep will be your downfall.  There are two ways to correct such a situation:  Less outgo or more income. There’s another old saying:  a part of all you earn is yours to keep.  Take a part (you decide what part, but some suggest a tenth) of your income and put it aside.  Then figure out how to spend the rest.  If you don’t take that first part, you won’t have any seed for the future.  Speaking of seed, there is a law of the harvest that says you reap what you sow.  Jesus said “Give and it shall be given unto you”.  You might want to consider giving ten percent to a charity of your choice, When you begin to work, your income comes from 100% of your own efforts.  You earn wages.  As you begin keeping part of what you earn, you can the earn profits.  Everybody knows that profits are better than wages.  Why?  Wages cease when you cease working.  Profits can continue with a life of their own.  Profits generate more profits. There are basically two ways to generate profits:  people working for you or money working for you.  Let’s examine the latter for this article. When you put money to work, you are investing or saving.  This follows the risk/reward cycle.

Unfortunately, there is no such button, but you can come close with careful planning.  Let’s say you want monthly income with no work.  With a sufficient sum of capital, you can produce that income stream. The table below shows the amount you would need to have on deposit earning the indicated interest in order to receive $1 each month.  Multiply the savings by the amount of income you want. For Example, if you think you can achieve a rate of return on savings of 6%, and you would like an income of $3,000 per month, the required amount of savings would be 3,000 x $200 = $600,000.

Chart showing how much is needed at various interest rates to generate $1 each month

Generating $1 each month

To generate a passive income of $5,000 each month at an average interest of 3% would take two million dollars ($400 times 5000) on deposit.  You can do the math with your own desired monthly income and assumed interest rate.

Networking is Working

What is the essential ingredient for a network?


Meet people.

Discover their needs, wants, pains and desires.  How?  Ask questions.  Become interested in them and their lives.  Care about them and be ready to help them avoid the pains and get their desires.  Remember that questions are the answer.

What Happens When You Fall?

According to Og Mandino, (Scroll VIII of The Greatest Salesman in the World),

The height of my goals will hold me not in awe, though I may stumble often before they are reached.IF I stumble, I will rise and my falls will not concern me for all men must stumble often to reach the hearth.

Watch this:


Be blessed this Memorial Day.

Network Marketing 101 – Recognizing an Opportunity

How do you recognize a good opportunity? Is it based on the product? How about the compensation plan? Or maybe it is the company. Together these three are usually referred to as PPC or product, plan, company. Some people say that PPC is not important. I beg to differ.
Let’s talk about the product. Just suppose there was a magic pill that would erase years of aging from your life. You are 60 years old, you swallow this pill, and you are instantly 20 years old. Wow! Would that not be an amazing opportunity? Surely this product would be super important.
Suppose however that nobody would pay you to distribute this product. Would you sign up for that opportunity? Maybe you would if you were feeling particularly altruistic. But if you are looking for a way to gain financial and time freedom, this would probably not be your choice. So maybe the compensation plan is important after all.
Suppose you are promised a fantastic compensation plan. They say you can get 100% commissions all the time. (You probably know deep down that that is an impossible claim. No scratch that. You think that might be an impossible claim, but you hope it is not.) So you sign up. And three months later the company is out of business. So maybe the company is important also.
So now imagine that you have found a company of impeccable integrity, a compensation plan that is accurate and viable, and a product that is simply amazing. For our purposes, let’s call that the magic product. All right, then. We are good to go. You sign up and then you notice that every car that passes you on the highway has a sticker saying “I sell the magic product”. As you drive through every neighborhood in your town, you notice a sign on every lawn that says “I sell the magic product”. Well maybe timing has something to do with the opportunity.
Ask yourself this: if you knew in 1984 how big Microsoft would become in 2014, would you have invested $1000 with Bill Gates? Would you expect the same return if you invested $1000 today?
So far, we have discussed product, plan, company, and timing. Which would you say is most important?
One more factor that is important: what is the corporate culture with the other distributors? Will people assist you just because you’re a distributor with the company or do you need to be in THEIR line? Will there be the opportunity for hands-on training? Is there a duplicatable system and process in place?

So let’s review
Timing is crucial. You want to be first to market with the products. You would like to have exclusive distributorship.
The company management has to be moral and have integrity.
The compensation plan has to be reasonable.
The product has to be something you feel good about distributing.
Next I will discuss one such company plan and product with great timing.