So you have probably had a few big commission checks under your belt, and you have come to like this money stuff that has been hitting your bank account lately.
Am I right?
Well, if you have been in commissioned sales or entrepreneurship for more than a couple of months, you likely have thoroughly enjoyed the fruits of your labors, but perhaps there has been this little nagging problem you have faced. It is something that over time can eat away at you. I know that I have felt the tug of this issue on multiple times throughout my sales and entrepreneurial career.
The problem of starting at Zero every month.
“Hero to Zero” is what one of my managers used to call that feeling. You may have had a great month or quarter, but you now have to turn around and do it again to be able bring home those commission checks you have come to enjoy.
You may not feel the drag of this feeling for the first few months or maybe the first few years of sales and entrepreneurship, but trust me, eventually you want to focus what you do best instead of chasing down that next prospect so you can bring home a paycheck. You want to increase your staying power like we talked about in our article “9 Things the Poor and Middle Class get Wrong about Money.”
So how do we combat this nagging feeling?
The answer is . . .
Create Residual Income
Residuals, those elusive sly vixens that we have heard of. We probably all know that one guy or gal who has built up a solid book of business or portfolio that pays them month in and month out regardless of whether they chase down that one extra prospect.
You may be thinking, “Yeah, yeah, this is all well and good. I have wanted to get my hands on some residuals. If I knew how I would have done it by now.” Well, my friend, today is your lucky day! We are going to talk about 4 ways you can get some of that residual income hitting your bank account month in and month out.
- Sell a service in addition to your product – There is a company who sells and installs high end pottery and plants in residential and commercial settings. Initially they thought that their installs were the most profitable part of their business. However, after a financial analysis they found that the most profitable part of their business was the weekly maintenance packages they sold their clients to come in and maintain the flower and plants they installed. This routine service they provided their clients led to more installs, but also a stable base from which they could work with. They were not forced to go through the feast and famine cycle just to keep the lights on and the business going every month.
Similarly, I know of an accountant who rather than selling his clients a couple hundred or couple thousand-dollar service at tax time, he turned that into a monthly subscription service. By doing so this takes the bite out of the once per year bill and provides him with year-round income.
- Get into a business that has residuals built into their model – Seems like kind of a no brainer right? Well, you would be surprised at how many people I have talked to who sell big ticket items like cars or real estate, who have told me they wish they had residual income. If residuals is not part of your business model, and it is something that you really want, then it might be time to switch businesses.
Insurance and financial services are industries that oftentimes have residual opportunities. Many multi-level marketing organizations have excellent residual opportunities. The actual opportunity itself is not as important as the opportunity aligning to the @4 keys of business.
- Get an Annuity or Properly Structured Insurance Contract – This is actually one of the oldest forms of residual income methods. Using lifetime income annuities can be dated back to Julius Caesar and the “retirement plans” for roman citizens and soldiers. There are some “financial guru’s” out there who disparage the use of annuities, however it is pretty tough to argue with a financial vehicle that has withstood the test of 2000+ years. Also, these same “financial guru’s” who preach anti-annuity doctrine also tell you to put your money into a mythical mutual fund that will consistently get your 12% returns, year in and year out. If you have attended our ultimate wealth course, you probably know that mutual funds are one of the biggest scams and rip offs perpetuated on the average investor. These supposed guru’s are probably oftentimes veiled, highly-paid, spokespeople for wall street mutual fund firms, so take their “advice” with a grain of salt.
- Invest in Cash Flow Real Estate – Real Estate is far and above one of, if not the most dynamic and lucrative residual cash machines out there. There are 5+ ways to get a return in real estate, each one being advantageous and having the ability to be optimized and increased. However, real estate should come with a warning label. That warning label might read that a person could lose big in real estate, especially if you don’t have proximity to someone like Brandon Broadwater who has not only created his own multi-million dollar real estate portfolio, but has also helped others do the same. You need to have a level of caution when entering the waters of real estate. However, the good news is that with the right training you can get into real estate very easily and with little, or no money, and it is one of the most lucrative residual income opportunities.
Now, let me make something clear, I am not making a case against commission only sales or entrepreneurial endeavors. I am simply stating that it would be wise to bring in an additional stream of income. That way those commission checks you are earning can simply be the cherry on top of your Money Making Machine.
So who is in? Tell us in the comments how you have created residual income, or how you plan to create residual income.