It's hard

For over a decade now I have been training and mentoring people in the journey to developing leveraged and passive income, using the same business model. An email I received recently encouraged me to reflect on this experience.

To give some background, I like to use Robert Kiyosaki’s ‘cash flow quadrant’, where on the left hand side of the quadrant you have ‘E’ for employee and ‘S’ for self-employed. The Es have no control over their work or leverage income. The S have control over their work but no leverage. On the right hand side you find ‘B’ for business people, and ‘I’ for investors. They both have leverage, however the ‘I’s have passive or residual income. The great divide is leverage. On the left hand side there is no leverage. On the right hand side there is leverage.

So what’s so important about leverage? Your income is not limited to your personal exertion!

I know it’s not easy for humans to change, and moving from the left to the right hand side of this quadrant is change. In the last decade plus I have watched thousands put up their hand to ‘cross-over’ the entrepreneurial divide. They don’t all make it. That’s life. That’s human nature.

Yes, it can be hard work – developing new skills, new habits, and new beliefs. However let me share what I think is really hard.

Having a fixed income and watching cost of living rise. I think that’s hard.
Having little ability to raise your income and receiving unexpected large bills come in. I think that’s hard.

Having to turn up for work at times and places determined but other people – I think that’s hard.
Having to work with people you don’t necessarily like – I think that’s hard.

Not receiving income when you don’t turn up for work – I think that’s hard.
Worrying about the fact that if you miss days of work you will not receive income – I think that’s hard.

Falling behind on the bills because you did take some days off work – I think that’s hard.

Having to go to work knowing you are doing little more than paying the bills – I think that’s hard.

Spending more time with strangers in the work environment than with your kids or those you would prefer to spend time with – I think that’s hard.

Living with the regret you were not there at the crucial times for your kids when they were growing up because you had to go to work – I think that’s hard.

Realizing that if something were to happen to you your family would not be financially looked after because you can no longer go to work – I think that’s hard.

Getting older and realizing you will not be able to work for as long as you are alive, and wondering how you are going to support yourself and or your family in your ‘golden years’ – I think that’s hard.

Living in poverty during the final 10-30 years of your life because you can no longer work in the way you spent your life working and now there is no income – I think that’s hard.

Waking up one day to realize your adult life to date has been built on a flawed economic model – I think that’s hard.

I have also concluded that it would be lot easier to simply give seminars on how to become an entrepreneur and walk away after the 2-5 days course. After all, most do this, and the majority are conditioned to believe that this is the way to go. They go to a course on ‘business development’, and walk away with ‘all the information’ they need to succeed.

I note with interest listening to John C. Maxwell (US business leader, speaker and author) in a live presentation recently agree with my conclusions on this point – that staying with people until they achieve their success is a lot harder than giving them a course in how to do it for a few days and then walking away.

However the short term gains of taking someone’s money for a few day entrepreneur / business seminar are outweighed by the long term success of sharing the true financial success of your student.

So yes, I find some things hard also. However like most things in life hard is on a continuum. And I find ‘working for a living’, ‘working for money’, harder than creating a purpose based life for yourself and your family through entrepreneurial development which includes guiding others to share your entrepreneurial breakthroughs.

Park bench income

It was Saturday morning and I was sitting on a park bench. My youngest kids were playing at on the equipment at the park near to me, as we waited for my older child’s sporting game to commence. I checked my business turnover for my international distribution division using the web based online business manager software provided by my partner company, using my cell phone. Then I called a business partner in my country and talked shop for about five minutes. When I got off that call I checked my business management software again – my income had risen $300. A transaction in another country, by someone else.

Now that to some may be a little bit of money, to others a lot. To me it was appreciated money. That’s an annualized $15,000 – while sitting on a park bench on a Saturday morning involved in family activities.

Sure, I did work in the past to generate this leverage. That’s the whole idea of leverage. Do some work, get paid for it multiples times into the future.

That kind of income would take most people in my physical preparation industry a few hours to generate and they would be locked in with clients. I was sitting on a park bench with engaged in family activities. That’s the difference.

Reminds me of the saying – ‘If you are willing to do what most aren’t you can receive what most won’t!’

11.11.11 and what this might mean to you

As the US moves into the date of the 11th day of the 11th month in the year, 2011, and most other countries are now in that date, you may find value in relfecting on what this date means to you.

Accoring to our 'in-house' shaman, it is the beginning of a period of time that spans through to 21 Dec 2012, and this significant November 11th date is the commencement of this period fo preparing for the Age of Aquarius and departing from the Age of Pisces.

However you perceive this date, we believe it will be great for you and your business!

Don't you love it when they suggest it's a pyramid with the top people getting paid all the money

I was speaking with a friend and colleague recently and I was taken back by their inference that direct selling involved the people 'at the top' getting paid all the money and the people 'at the bottom' getting very little of the money.  Now this was a well-educated person, however they felt the industry needed to change to 'fix this'. I didn't debate or challenge this person, because I respect their interpretation.  Their inference, like many, is that conventional main-stream business models are better because apparently, the people at the top don't make all the money, and the people at the bottom share more equally in the distribution of wealth. Now that's something I don't see the rationale of...considering the below:

Average Compensation of CEOs of 367 US Firms

2004 - $11.8 million*
2003 - $8.1 million
1990 - $2.0 million

The 590% increase in CEO compensation from 1990 to 2004 far outstripped the increase in performance in the stock market, inflation, employee wages or the minimum wage.


*This average rises considerably when then number of top corporations is reduced to say the top 100 corporations.


According to United for a Fair Economy and Institute for Policy Studies (2007): "If the minimum wage had risen as fast as CEO pay since 1990, the lowest paid workers in the US would be earning $23.03 an hour today (2006), not $5.15 an hour."


The Ratio of Average CEO compensation and Minimum Wage Worker in the US 1965-2005


2005 - 821:1 (Worker- Minimum wage $5.15/hr plus benefits)
2004 - 725:1
2003 - 540:1
2002 - 416:1
2001 - 668:1
2000 - 815:1
1992 - 319:1
1989 - 207:1
1978 - 78:1
1965 - 51:1

Source: Mercer Survey of 350 large industrial and service firms conducted for the Wall Street Journal

Examples of Large Executive Compensation in the US


On January 3, 2007, chairman and CEO of Home Depot Inc. Bob Nardelli's severance package was $210 million.


InterActive Corporation (IAC) chairman and CEO Barry Diller's 2006 compensation was $295 million. (Also see our article CEO calls Corporate Governance Researchers Birdbrains!)

David H. Brooks, chairman and CEO of DHB Industries made over $250 million as DHB profited from supplying bullet-proof vests to US Marines in Iraq despite 5,000 vests being returned as ineffective in May 2005. His base salary of $70 million in 2004 was 13,000% more than his 2001 compensation of $525,000. In 2004, Brooks sold company stock worth about $186 million, initiating a drop in DHB’s share price from more than $22 to $6.50, after which he was put on "administrative leave".


Exxon Mobil's chairman and CEO, Lee Raymond's 2006 retirement package was about $400 million.

The CEOs in the examples above also held the position of chairman of the board of directors, a board which must according to fundamental corporate governance principles - and often by law - fulfill their fiduciary duties, monitor the performance of the CEO, hold the CEO accountable, represent the interests of the shareholders in the boardroom, and act in the best interests of the corporation's shareholders.

Lucian Bebchuk and Yaniv Grinstein of the Harvard Law School write in their paper The Growth of Executive Pay that during the period 1993-2003, executive pay "has grown much beyond the increase that could be explained by changes in firm size, performance and industry classification."

Who's the 'pyramid' now?

The greatest live event in America this year! 2011 International Convention!

Historical insights and other insights into the direct selling industry

I stumbled upon this article whilst researching the quote:

'All truths go through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.'
--Arthur Schopenhauer

I found it an excellent historical summary and insight into one of the newer distribution of product and profit models in our economy. I am confident you will find some revelations in this document that you were not previously aware of.

http://www.kingsports.net/Download/Articles/sellyourself.pdf

The benefit of being in the pathway of product & profit distribution!

We just seen a great story unfold in our sales team. A few years ago we recommended the company’s health science products to a client who trusted our recommendation and became a regular product user. When the time came to move him to Preferred Customer status, we explained the benefits of being a distributor rather than a PC for the potential of gaining a small financial return from referrals to his contacts, additional product use for himself, and any downline placements that occurred from his upline. In essence, he could potentially get discounts on his vitamins, and as he was going to buy the vitamins anyway, this was a no-lose situation.

Over the last few years this has panned out as expected. He would get a check every month or so, and this resulted in basically giving him a discount on his personal use vitamins. Now since he chose to get in the distribution pathway simply by joining as a distributor, and through no further effort on his part, one of his legs grew substantially. He was sitting on a half-built income stream than simply needed a second leg to allow him to take the money off the table.

Fast-forward to now. His wife decides, after years of using the products herself, and finding the timing was right for her, to start up her own business. With the relaxation of the company’s regulations in relation to husband/wife having separate The company businesses, and after consultation with the soon-to-be upline, she commenced her own The company business on the weak side of her husbands. All of sudden his checks become so much more regular. In fact between them they received about seven checks in the first five weeks of the wife’s new business, and covered her set up costs and more.

That’s the power of this business! So many distributors in our team, by virtue of the unique distribution model and compensation plan, are sitting on a goal mine of cash flow that just needs one more leg to full exploit. This has been an excellent example of the benefits of getting involved as soon as one can by placing yourself and your The company business in the pathway of product and profit distribution!