These are difficult and challenging times for many of us. We all know relatives, friends, or acquaintances who have had their work hours reduced, lost their jobs, had trouble paying their basic monthly bills, or even had their homes go into foreclosure. None of us wants to be in such a position.
The first action to take is to find another job or second job that will pay the basic monthly bills. No doubt this position will not be commensurate with your training and skills, but you do need to acquire additional income immediately. Whether it is a salaried position or one that pays just above minimum wage, it will be transactional income that helps you to get through each month. You contract to do a particular activity or service for which you are paid a particular income. Reduced activity or service means reduced income; no activity or service means no income.
No one is certain how long the current depressed economic situation will last. Many of us have had to make significant adjustments in our daily lives both economically and psychologically. This is not the time, however, to blame ourselves for our condition, or feel resentment that we have been let down, or play the role of victim. We need to make the tough decisions necessary to survive in the present and to realize that in such behavior lies our sense of rebirth. Re-examining our values to create a positive and discerning attitude towards our spouses, our families, and the future can lead to a new attitude towards our lives.
A critical part of this new attitude is taking stock of our circumstances and planning for the future. Thinking about a RELIABLE renewal income, as well as our regular transactional income, is one way to shape a more positive outcome. A true residual income is dependable income that turns up month after month. It is income that you receive regularly for an activity or service that you perform only once.
There are different types of residual income, however. Successful authors, for example, receive royalties on their book every time a copy is sold. But these royalties don’t come in indefinitely because the number of books sold tends to diminish with time. So do the royalties. When people are no longer buying the book the royalties end. On the other hand, extremely wealthy people can have a steady stream of income if they have millions of dollars to invest in bonds, or stocks. As long as the bond and stock markets are doing well, these people will receive significant residual income. But we all know what’s been happening to bonds and stocks in our current global recession. For ordinary investors, the real estate, bond and stock markets are simply not viable options for making significant long term RELAIBLE residual income.
So what other options are there? Some people have sought long-term wealth through multi-level marketing companies (MLM’s). Yet few such companies last more than a few years and many clients have been severely affected financially by buying excessive inventories and by diminishing numbers of disappointed distributors and/or customers. Some of you reading this article are probably in this category.
We know of only two instances in which true residual income exists. One is the insurance industry. Some companies provide residual income for their agents through commissions earned on the initial sale of a policy. As long as the agent continues to service that account successfully year after year, he or she will continue to receive a residual income. Most insurance agents, however, only receive their income from the business their own agency sells or services. Agents who refer other customers to their companies but are not servicing their accounts receive no commission from these referrals. So the insurance industry provides residual income to its agents through commissions paid only on their own accounts as long as they continue to service them satisfactorily. Referrals on other accounts are not rewarded.
The other industry that provides true residual income does so not only in terms of commissions but also on all customers’ referrals. It is the direct marketing industry in which marketing executives may be paid on both their own personal customers, and a business referred to them by these customers.
In 1999, facing the rest of her life through the lens of her patients at a hospital oncology unit, my wife, Cynthia, had an awakening that changed the direction of her career. Now she has financial security that answers many of the questions we are asking at challenging times like today. What would I do if I were challenged with an inability to work and earn money? What would I do if I was left alone – who would take care of me and where would the funds come from to assure exceptional care? How will my family be cared for if my financial position changes? “I am so grateful to those clients whose courage and attitude prompted me to leap out of my comfort zone as a counseling center owner and therapist for more than 25 years into a reliable renewal- income business owner that transferred my skills to create real financial and time freedom”. Where would we all be now in this economy if we relied only on transactional counseling income?
Affiliating with a green manufacturing company that advocates wellness — financial, personal, and planetary—is the best career decision I’ve made in my life. We will examine the consequences of that decision in our next article.
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