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The 7 secret keys to wealth - Key #4: Residual Profits.

This article is one out of seven that I wrote about wealth. The whole series contain a lot of free valuable information about key factors that can help you become wealthy. The rich do things in a different way. That difference is the one I want to explain here. Let’s scrutinize together these strategies that can make you more money and help you boost your income.

The whole series contain the following articles . . .

1. Add Value.

2. The Multiple Streams of Income.

3. Passive Income.

4. Residual Profits.

5. Leverage.

6. Specialization.

7. Compound Interest.

In one of my other articles on this series I share information about passive income. Here I will go one step further and I will show you how residual profits can boost your overall profits.

It is all in the multiplication. That technique can multiply your efforts the most. The more effective your leverage is the more your efforts will be multiplied. Streams of residual income are a perfect method to do this.

For example, let’s say that you write a book. You realize that when you get paid royalties from your art you don’t have to be present to get revenues from your efforts. This means that you make an effort once and you get paid several times, right?

If you write a book you are able to receive passive income but not residual profits. You can sell that product to one person once. That same individual may as well purchase one or two additional copies to give them away as gifts if they really liked the book. On the other hand, what I mean here is that the book is a product that is intended to be sold to one person once. On average every client you get will purchase only one copy.

So, writing books is a business that allows you to have passive income but not residual profits. The same happens with millions upon millions of other businesses out there. But what if you can find a way to receive residual profits while receiving passive income at the same time? The answer is simple: your income will be multiplied.

For example, let’s analyze the web hosting business. Selling web hosting is a very competitive business for this same reason, because it can be very profitable. Let’s say that you own a hosting company and you have about 1000 clients. These people will pay you monthly some money to have their websites hosted through your company. If the average client pays $4 per month then you will have a recurring profit of $4,000 every month.

This is income you receive month after month. As long as the client stays subscribed you will keep receiving profits. Most website owners stay subscribed for months and even years. So, if you use your available resources to get more clients, your income will simply grow exponentially.

This is just an example. The web hosting business is not as easy as it seems because of competition. The competition is fierce on this field as well as other highly profitable businesses on the Internet, but the way I see it is that when I can receive residual income, I don’t need many clients to be profitable on these businesses. The secret is that I can sell the same product to the same client several times over and over again.

So, this is the key concept. No matter what business we are talking about, as long as you can sell the same product to the same client, several times every year, you can receive residual income. There are many businesses that operate this way. Membership websites are a very good example like dating websites.

The best businesses you can come up with are those that do not exist yet. If you can imagine a way to receive residual income that no one else have thought about before, it could be quiet profitable for you. What obscures the profits on these businesses is competition. They are highly profitable so they are also very competitive.

It is important to have imagination. Only you know what will work better for you. I will show you a few examples for you to have an idea. You can earn residual profits selling web hosting and memberships online as I said above. Another way is to own residential real estate, but this may require large investments on your part. You can also combine your streams of passive income and change them in such a way that you also receive passive income from them.

For example, if you sell e-books, you can post affiliate links on the text of their pages. Let’s say that in one of the e-books that you actually sell you refer the reader to a hosting company where they can register a domain name and build a website. If that company offers an affiliate program you can join that affiliate program and when your reader registers with them, you can make money for as long as they stay subscribed.

You can join several affiliate programs and promote those products through your e-books. Furthermore, you may offer full resell rights on your e-books. This means that your clients after purchasing your e-books can resell them and your customers’s clients can resell them again. This may lower the overall value of the e-books fast but it is a good way to have your affiliate links spread all over the Internet.

These are just a few ideas. Some may work better than others for you. Another method is to write articles and post a link to one of your websites. Then when your readers click on that link they will go to your website and they will be automatically redirected to your affiliate website. You may post the articles on affiliate banks and let thousands of webmasters use those articles. This is another way to let your affiliate links spread all over the internet.

You can post links on your e-books to other e-books you are selling. That way you can sell other products to the same client. If you sell hard copy books you can do the same thing. This is an effective marketing technique that can help you increase your sales.

In my opinion though, the best sources of residual income are those which allow you to sell exactly the same product, to the same client several times over. I think that this refers mostly to memberships of any kind plus other areas of the business world that I will explain bellow.

Notice that many times you don’t need to sell the products yourself. You can be an affiliate for companies that sell these products and make a lot of money this way. For example, some hosting companies and dating sites offer the affiliates the opportunity to earn residual profits. They pay you a set amount of the membership profits for as long as the client stays subscribed.

This is amazing. You don’t have to take care of the customers. You don’t have to deal with refunds. You just advertise the products. Whenever a client purchase the membership, you get paid a portion of the profits for as long as those clients remain customers. This could last for just a few weeks or several months and even years.

Another way is using multi-level marketing programs. Multi-level marketing companies let you sell their products and train other people to sell the products as well. They will pay you a portion of the profits that your trainees (your sales people) generate. Not only that but they will also pay you for the profits that others bellow your sales people generate.

This multiplies your income exponentially and let you receive residual income because you make money not only from your efforts but from the efforts of other people as well. You may be receiving profits from the efforts of people that you don’t even know.

This is not a pyramid scheme. Many people confuse this system with an illegal pyramid scheme. That’s because this is exactly the opposite of what a pyramid is. A pyramid/ponzi scam requires you to make an investment to join the company and the only way for you to make money is to advertise the scam and convince more people to pay money to join the company as well. This makes no sense and it is mathematically inconsistent.

The idea behind multi-level marketing is the opposite. You join the company for free. You can sell the products and get paid for it like with affiliate marketing. You can train other people to sell the products too who can also join the company for free. You get paid whenever they sell something. If they train other people, you also get paid when one of those people sell something. This keeps going for several levels.

It is a win - win situation for everyone. Those who buy the products from the company receive a real product. It could be anything, from a book to a computer, to a CD player; anything that the company happens to be selling. So, the consumers are happy, the sales people are happy and the company selling the products is also happy.

This is an idea of other way to receive residual income. You receive residual income with multi-level marketing because while you won’t be selling the same product to the same person several times, you can train some people to do the sales and make money from their efforts whenever they sell a product to someone else.

As you can see receiving residual profits is not only important but desirable. This is definitely one of the true keys to wealth. When you receive residual profits you leverage your efforts. Leverage is precisely the topic that I will be discussing on my next article on this series. You can find that article on my website.

I hope this information have been helpful to you. Since I started my business career I realized that I wanted to get as many streams of residual profits as possible. This is definitely one of the things rich people do to make money, and it is very profitable!



EasyWebRiches 2006




 

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