|Last up date 27/10/20014
income a person
receives from the work s/he does.
For this one needs to put in
certain number of hours every week as work.
Residual - Income
think of income as wages earned for a day's work.
Residual income is different because it continues to
pay out long after the initial effort of earning it has passed.
: Income is an exchange of money for a devotion of
An employer agrees to pay a worker a wage in
exchange for certain
enumerated services based on the employee's level
of education or
accumulated expertise within a given industry.
How much the worker earns depends on the type
An employer may elect to pay an employee in a
number of ways,
including an hourly wage,
a fixed salary or a commission wage based on total
income is directly proportional to the number
of hours invested in it
(40 hrs. of pay for 40 hrs. of
Is a percentage of
the profit generated from the sale of product.
As the volume of
product increases with sales turnover within the network,
the percentage of
the profit generated from the product turnover will also increase.
is income that
continues to be generated after the initial effort has been expended.
Compare this to what
most people focus on earning: linear income, which is
compensation or payment in the form of a fee, wage, commission or
Residual Income: is that once things are set in motion,
you continue making money from
your initial efforts,
while gaining time to devote
to other things...
such as generating more
streams of residual income!
Direct Selling Association of Australia
speaking, why is it
people ‘suck’ at networking?
selling is the sale of a consumer product or service, person-to-person,
away from a fixed retail location,
marketed through independent sales representatives
who are sometimes also referred to as consultants, distributors or
Direct sellers are not employees of the company.
They are independent contractors who market and sell the products or
a company in return for a commission on those
Network marketing ?
Also known as Multi-level
marketing, is a form of marketing model that was started decades ago.
The model uses direct sales to consumers through relations
and word of mouth from the company’s team of marketers.
In this marketing model, the
is not only paid for the
sales they make but also for successful referrals that they
bring to the program or to the company.
(MLM) is a marketing strategy in which the sales force is compensated
not only for sales they generate,
but also for the sales of the other salespeople that they
This recruited sales force is referred to as the
participant's "down line", and can provide multiple levels of
A FRANCHISEE pays an initial fee and
ongoing royalties to a franchisor;
in return, the franchisee gains the use of a trademark, ongoing support
from the franchisor,
and the right to use the franchisor's system of doing business
and sell its products or services
at its very core is about relationships,
A relationship between three parties: In the world of
an advertiser can be a company selling a product like
electronics, airline tickets,
clothing or car parts, or an advertiser could also be an
insurance company selling policies.
A Pyramid Scheme?
scheme is an unsustainable business model that involves promising
participants payment or services,
primarily for enrolling other people into the scheme, rather
than supplying any real investment or sale of products or services to
services are an example of intangible economic
typical chain letter includes names and addresses of several
individuals whom you may or may not know.
You are instructed to send a certain amount of
money--usually $5--to the person at the top of the list,
and then eliminate that name and add yours to the
You are then instructed to mail copies of the
letter to a few more individuals who will hopefully repeat the entire
The letter promises that if they follow the same
procedure, your name will gradually move to the top of the list and
you'll receive money
lots of it.
letters are simply low payment pyramid schemes in an envelope, so, like
make money only for the first few on the list. All the others lose
What is A Gifting club?
Many Oregonians are being defrauded by
unlawful pyramid schemes operating under the guise of so-called
such as the Dinner Club or Women's Empowerment Network.
These "clubs" are elaborate scams designed to make money for
a few at the expense of many.
The promoters of the scheme claim that
IRS regulations allow people to "gift" one another up to $10,000 per
year tax free.
For example, persons are asked to pay $5,000 to enter at the
bottom of the pyramid or "tree" along with others.
As these people encourage others to join the club, they rise
on the tree to the top position, where the total amount collected from
"gifts" is $40,000, a $35,000 profit. Often, people at the
top re-invest another $5,000 and start the process anew.
Each of the eight persons just entering
the tree delivers his/her $5,000 "gift" directly to the person at the
top of the pyramid.
This also helps convince new players that they will
eventually receive a $35,000 return on their "gift."
These schemes are doomed to failure.
Each "tree" involves 8 persons who "gift" $5,000 each.
The person at the top of the tree gets $40,000 and the other
7 people hope that enough players come on board to push them to the top.
For each person at the top, there are 8 people who are likely
to lose their investment and the chance of a big "payoff."
Eventually, these schemes collapse because they run out of
No matter what the promoters may tell
you, gifting clubs are illegal. They are unlawful pyramid schemes.
Gifting clubs and pyramids have not been approved by the
Oregon Attorney General, local district attorneys,
or the Division of Finance and Corporate Securities.
Operating or participating in a pyramid scheme violates
Oregon's Unlawful Trade Practices Act, which imposes civil
penalties of up to $25,000 per violation.
Gifting clubs and pyramid schemes may
also violate Oregon securities laws by virtue of being investment
Oregon law requires securities to be registered and licenses
for persons engaged in transacting business in securities.
A violation of the securities laws could subject a person to
civil penalties of up to $20,000 per violation, or criminal prosecution
as a class B felony.
The IRS does not recognize gifting clubs
or pyramid schemes and considers all money gained from these schemes to
be reportable income.
Failing to report income from pyramid schemes on your tax
or attempting to hide such monies may subject you to severe
federal civil and criminal penalties.
What Is A System