The following article is an excerpt from my newsletter, CLR Inspire (http://www.aweber.com/z/article/?clrinspire) If you’re an entrepreneur you may find a few tips to take away!
Many years ago I read Robert G. Allen’s book, Multiple Streams of Income – How to generate a lifetime of Unlimited Wealth. The lessons I learned from this have remained with me since. There is one in particular that I would love to share with you here, and that is to make sure you get paid many times over for your efforts. It’s called creating residual income.
Agreed, this is a coaching and personal development newsletter. And I am neither a business coach nor a financial advisor. However, my work as a coach is about helping you grow towards what you want. And sometimes this could involve a little re-education, empowering you to make a much needed paradigm shift. So today please permit me to digress from the usual. With that said, may I ask you , how many times do you get paid for every hour you work?
If you answered, “Once,” Robert Allen says your income is linear. You get paid for your time, and when you’re absent you earn nothing. This is a rather risky position to be in as there are a limited number of hours in a day; you can only work a set number of these. And since you must show up to get paid, you become a slave to time (sorry if this hurts). You don’t call the shots, the money does.
A better alternative to linear income is residual income. In this case, you get paid over and over for the same effort. You put in the hard work once and generate a steady flow of recurring payments. Creating residual income requires patience and perseverance. At first you may earn nothing while you gradually build up this new income stream. A case of paying now and playing later. But when the money does start to trickle in, it keeps on coming, whether you show up or not. Now isn’t that freedom!
Examples of linear income are:
- A salary,
- Hourly rates for sessions with clients, and
- One-off payments for individual sales.
You must keep working to keep on earning. No work, no pay.
Examples of residual income are:
- Royalty payments on a book or a song,
- Re-packaging a live workshop as audio-programmes or workbooks, to sell over and over,
- Bonuses from the sales of multi-level marketing teams,
- Licensing others to use your recipes or formulas,
- Franchising your business.
You do the hard work once and keep on re-selling. Or involve others to re-sell for you, earning royalties. Work once, get paid over and over.
Robert Allen tells of an inventor who built up residual income. He created the battery tester on the Duracell battery. Duracell pays a few pennies per battery pack, and over the years this has added up in the millions.
Which appeals more to you ? Slavery to money as you eke out a living from linear income, or time-freedom and financial independence as your efforts pay off again and again, whether you show up or not? If residual income appeals to you, why not brainstorm new ways to create it in your business today? And be free to do the things you’ve always wanted. Every woman’s dream and a great possibility.
Copyright (c) 2009 Oma Edoja