Active Vs Passive
Perhaps also difficult for a traditional-business person to comprehend is the difference between "active" and "passive" income.
- "Active" income can be defined as income generated by actively participating to earn money. The disadvantage is that usually people who generate a large amount of active income, end up without much spare time. In many cases, they have no short-term security (meaning that if they couldn't go to work for 3-6 months, then they would generally end up in financial difficulty). Furthermore, depending on the circumstance, it can be very difficult for traditional business people to plan properly for their retirement. It is estimated that for a reasonable annual income in retirement, one should have 2 to 3 million dollars invested at present day rates. This is generally not a viable proposition for the majority of traditional workers.
- "Passive" income, on the other hand, can allow considerable amounts of money to be generated, but because it involves the principle of "leverage" (either time leverage or money leverage), you can generally end up with an abundance of time at your disposal. Networking, as has been explained, does not involve a large capital outlay and therefore has no capital risk involved with it. Once a business of this sort has been established, the income can be residual, irrespective of whether the participant remains involved or not. There are numerous examples of this being the case. The effect of this is that short term and long term security are more than adequately covered.
A business network is therefore most definitely a very real business opportunity. In all probability, it offers (in many cases) more advantages than traditional business. Albeit that it requires very careful consideration with the selection of a company.
It must be emphasised that there has been an enormous paradigm shift in the service and distribution industry over the last decade and that networking has simply taken advantage of that situation.
Furthermore, it needs to be emphatically noted that there has been a large paradigm shift within the industry itself in the last ten years. This makes it even more important to select a progressive company before getting involved.
Paradigm shifts (Direct marketing versus networking)
There can be little doubt that there has been an enormous paradigm shift within the networking industry over the last 5 to 10 years.
For 40 years or more, networking has been thought of as predominantly a direct marketing industry. This image has not been helped by the fact that most networking companies are involved with a direct marketing association. As well, the industry within Asia is predominantly thought of as a direct marketing business, where heavy emphasis is placed on selling (retailing) or "door to door" activities.
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