4. DIFFERENT TYPES OF INCOME
Now, to understand how to make our business
successful and how to make the change, first we need to understand the different types of
income that is possible.
Firstly, linear income
Here you exchange your time for money. The more
money you want to earn, the more time you need to give up. If you are employed then you
are earning linear income. As an employee, if you want to earn more, you have to work
hearder and give up more time. And there is a limit to how much you can earn based on time
and if you stop or if you get sick, your income also stops.
Secondly, residual income
This could be where you initially spend sometime to
build up the relationship with your potential customer and once the customer uses your
products or services, they will come back for more. The second time round, you will
probably only need to spend very minimum time if not none, to get the second order. For
example, if you have a good quality consumable product, your customer will always come
back for more. You would have RESIDUAL INCOME.
Another example would be royalties earned by writers
everytime you buy their books. By having residual income, you are actually leveraging
time. You can spend less time to get more money. The question then is how to find residual
source of income. Wgen you are in business, as Paul Getty says earlier, you must have
unique highly consumable products,........why?.....because these products will be able to
give you residual income.
Thirdly, multiplex income
The most exciting source of income is called the
multiplex income which is perhaps the best way to leverage your time for creating wealth.
Multiplex income is earned from the efforts of others. This is again one of Paul Getty's
requirements. How?
You want to be able to earn $1 from 100 people
rather than earn $100 from your own timw. Why would anyone give you the $1.
Consider the McDonald franchise concept. Ray Kroc
did not become a millionaire by selling hamburgers. He has independent business owners
selling the burgers for him and they each pay him franchise fee of percentage of sale.
What Ray has is a proven system: a system that can be duplicated. Multiplex income is
based on the concept of "the power of duplication: or what we can call the
"effect of multiplication".
The opportunity that we are introducing to
you as a individual, the opportunity that best allows you to leverage your time to
create wealth.
