May 4th 2015


When faced with the question, “What do I do to create a second source of income?” most people wing it. They might apply for a part time job or consider going back to school to get a more advanced degree or trade. Let’s take a look at the options available today and see if we can compare them to the option of Network Marketing:

1. GET A PART TIME JOB – At $10 an hour (the going rate), if one were to work an extra 20 hours a week, that’s about $800 a month or $500 a month after taxes. No residual income stream and a huge time commitment for very low return. If childcare is required, this option is out!

2. GO BACK TO SCHOOL – Make no money while in school . . . expense = $10,000-$30,000 for a minuscule return in terms in increased income once graduating. Most people find themselves in the same bind they were in prior to going back to school. Only now they have college debt.

3. BUY VENDING MACHINES – $2000 for a descent vending machine. Place each machine. Buy product in advance (some of it spoils). A badly placed machine yields no profit. Buy 10 machines, you’ll have $30,000 invested (including product) before making a penny. Oh, and machines break and need to be serviced! If loans or leases are involved it makes it even more difficult to make a profit. The reason most people buy vending machines is for the “passive” income. Not so passive when you figure out that you need to service the machines, empty and count the cash and stock product and remove expired inventory.

4. GET INTO RENTAL REAL ESTATE – Don’t get me started. My goal was to buy 50 properties for under the price of a car each! I began collecting properties in 2000. I bought 1 in Grand Rapids for $40,000. 13 in the mountains for Arizona for about $50,000 each. 5 in Milwaukee for about $25,000 each and about 30 in the Cleveland Area for $15,000 to $25,000 each. So all in all, I owned 49 properties! Wooooo Whooooo! I was flying high! Well every month I had a hot water heater, swamp cooler, roof, etc that needed replacing. I was hit with termites, mold (multiple times), and various repairs caused by damage from the tenants. Almost monthly I would receive calls from my property managers asking for $5,000 to $15,000 to resolve some sort of tenant issue. For example, I had a property manager that was an attorney and also the president of the board of realtors in his city, withhold rents from me even though he was collecting the rents from Section 8. In 3 months he had spend $17,000 of my money on luxury items like cars, vacations, etc. I had to threaten him with a lawsuit. I had a tenant vacate a property but didn’t find out until 60 days later. In the meantime the “thugs” had broken in and did over $40,000 in damage to a home that was worth $25,000. They stole the plumbing, ceiling fans, appliances, and doors. They broke all the windows.
I had a tree from one of my properties blow over in a storm and land on the neighbors car in the street. I received a citation because one of my tenants in Arizona was running a taco stand out of his front yard. I received a call on Sunday morning from my property manager of a $300,000 home I was leasing out as a vacation rental. She says, “Did you hear what happened last night?”. I said . . . “no.” She said, “The 17 year old staying with his parents at your home fell backwards off of the 3rd story and had to be rushed to the hospital in an ambulance at 2am. He was drunk. When I got to the home the next day, there were 50 empty beer bottles and four empty bottles of Yagger on the pool table. It’s an endless parade of issues and problems on a monthly basis. I’ve liquidated all but 25 of them and am now looking for ways to “simplify” my affairs. Yes, you can get into rental real estate to make money if you want to . . . network marketing is 100X easier.

5. BUY A FRANCHISE – I spoke with a woman that works for 7 Eleven. She goes in and checks up on the franchise owners. She makes
sure the stores are spotless and that the product displays are up to spec standards. She and her husband were talking about opening a
7 Eleven Franchise (she had no idea how she would do it financially). I asked her, how much it would cost. She said $150,000. I said, “Great! So you get a store location, all the inventory, employees, etc for $150,000?” She said, “No, that is the franchise fee. You need another $500,000 to secure the location, buy the inventory, the reserves, hire employees, accounting, legal, etc”. I said, “Oh, so what can you make from one store?” She said $300,000. So I asked, “You’ll profit $300,0000 with a $650,000 investment?” She told me that the $300,000 was revenue and expenses needed to be paid from that.
I replied, “So you’ll need to buy all your product, service your loans on the $650,000, pay all of your monthly utilities, pay your employees, leases, etc from the $300,000 in revenue.” Then she tells me that the $300,000 is based on whether the store does well. If it doesn’t do so well, that could be less. I asked her, after ALL of your expenses, if you do well, what will your PROFIT be? She said, $50,000. $50,000!!!! After all of that???? I would rather just do network marketing. Each distributor is independent, you are not limited by location, you don’t have to go into work each day, you don’t have to manager employees. AND, you have residual income without a $650,000 investment!! People!!!!!

Just in case you’re still interested, here’s
some startup info. Keep in mind, it may take you 3-5 years to break even
and you’ll never experience residual income. You’ll have to manage
employees and do your own payroll and accounting. Don’t forget,
you’ll have to sign leases and pay lawyers and franchise fees.
Before you sign up for one of these programs, you may want to consider
that having a network marketing business requires none of this,
has a residual component AND costs under $1000 to start.

So here are some options for you:

1. Snap On Tools $135,390 # of locations 3,392

2. 7-Eleven $393,800 # of location 6,142

3. Aaron’s $420,725 # of locations 1,749

4. Panera Bread $1,447,770 # of locations 1, 379

5. Servpro $156,250 # 1,571

6. McDonald’s $1,480,625 # of locations 14,016

7. Liberty Tax Service $63,350 # of locations 3,592

8. Merry Maids $66,600 # of locations 943

9. The Maids Interntional $106,420 # of locations 1,053

10. Jimmy John’s $395,500 # of locations 1,130
Please let me know if you need any more info on any of these
opportunities. By the way, they are legally not allowed to tell you
how much money you can make . . . but they have to tell you that you may
lose all your money and that you probably won’t break even for 3-5 years.

6. START A TRADITIONAL BUSINESS – Same as above!! Money Pit for 5 years if you plan to grow at all. So tough to make money
because you are continually looking to invest in the future of your business. (additional space, hire more employees, upgrade your technology stay on the cutting edge, etc) AND you need to create sales which means you need to become an expert in marketing your business. It’s not uncommon to spend $100,000 to $1,000,000 up front before every taking in a dime with no guarantees that you’ll EVER be profitable. Sure, you can make money in business if you have the stomach for risk, financial resources and time to make it happen.

As a small business owner you must consider that:

a. You’ll be handing leases and contracts
b. You’ll be dealing with employee issues including payroll, hiring and firing, disputes, training, etc.
c. You’ll be having to become a sales and marketing expert to grow your company
d. You’ll be taking out loans and mortgages in your name
e. You’ll be asked for the final say on ALL of the decisions
f. You’ll need to be sure that technology is up to date and you’ll be constantly investing in technology IN ADVANCE of the technology curve
not always knowing what direction it will go.
g. You’ll need to project, invest and plan for future growth.
h. You’ll have to handle all legal issues through attorneys. They are part of the equation and you must budget time and money for them.
i. Did I mention complicated taxes?

Yes, you can start a small business to make some extra money.
7. GET A BETTER JOB! We don’t question working 40 hours a week, 50 weeks a year for 40 years. That’s 2000 hours a year x 40 years = 80,000 hours.
We have a boss. We deal with politics. We work from a cubicle or our car. We set alarms for 5am. We drive in rush hour traffic. We have a LIMIT to our income. We are told when to take a vacation. There is no residual income. At the age of 55 they are looking to replace us with someone smarter and younger that will work for less. Sounds great!! And we do all of this to avoid having to be the person that STARTS A TRADITIONAL BUSINESS!!! (#6 Above)

8. YOU CAN BECOME A REALTOR, INSURANCE AGENT OR STOCK BROKER – Lots of training and certifications required. Very limited residual component. Investment of $2000-$10,000 up front to get your certifications. Probably the second best option of all. You are independent and you get to write your own paycheck. Unless you go on to become a broker and get an office, you don’t get the leverage of people that network marketing provides.

9. NETWORK MARKETING: Here’s why Network Markteting is so appealing . . . You get a business for significantly under $1000. You get to work from home. You don’t have all the headaches associated with a traditional business. You have no boss. You have an unlimited income potential. Your capital investment is limited to a computer and smart phone (which most people already have). You get paid residual income. You can start and stop as you choose. You are not limited to a geographic location. Your product is the most sought after commodity of all commodities . . . additional income. The company does all the heavy lifting – You get the massive leverage of technology, customer support, product development, product fulfillment, etc and you don’t need to pay extra for that! Network Marketing is BY FAR the best option for making extra money and taking control of your financial future available in the marketplace today!


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