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The Cash Flow Quadrant Revisited: Network Marketing

If you've read any of Robert Kiyosaki's books, you should be familiar with the concept of the cash flow quadrant. If you're not quite familiar with this concept, it is an explanation of the four different ways you can make money; legally. The first quadrant is the employee quadrant. You simply work for someone else; your employment hours and salary are determined by someone else and you just do your job. The second quadrant is the self employed quadrant. This usually entails doctors or lawyers having their own practice. They have more freedom, but the job still requires them to be present. The third quadrant is the business owner. You have the opportunity to make money off of other people's efforts; you are not required to be present to make money. Finally, the last one is the investor quadrant; you let money work for you.

Network marketing is a great way to transition from the employee/self employed quadrants to the business owner/investor side; it is the reason why many people are attracted to this industry. However, there is a misconception about when you actually own your network marketing business. Many people believe that the moment they sign up for an opportunity, they own their own business. Nothing could be further from the truth.

Let's examine the cash flow quadrant again. The employee/self-employed side requires you to be present; you need to do the work in order to make money. If you were to take a five month vacation with your family, would you still be making money? If the answer is no, then you do not have a business running. If your answer was yes, then you are beginning to develop a business that can produce a lucrative income for you. You want to make money off of other people's efforts or have money work for you.

The name of the game in network marketing is to get sign ups in order to leverage your time to make more money. That means you must be able to generate leads on a daily basis through various marketing techniques; not wasting money and buying unqualified leads.

Remember, you are not a business owner the minute you sign up with a network marketing company. You are simply a representative at that moment. As you begin to market and prospect other people, you will start to see your organization growing proportionally to the checks you get in the mail. Always keep in mind the vacation analogy: If you were to stop prospecting people for a few months and go on vacation, how much money would you still get in the mail? Would it be enough for you to finally quit your day job? Would it be enough to support your financial goals? Ask yourself these questions and really evaluate your current situation. Understanding where you are now and how far you are from actually developing a business will really help you make the decisions that will ultimately affect the growth of your business.
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