The Magic Of Compounding In Network Marketing
Posted by Reyn | October 25, 2008
When it comes to creating wealth faster, many people disillusioned by the opportunity of network marketing.
I don’t know how it all started, but it seems like many people have this distorted belief that network marketing is a get rich quick business.
The truth is, network marketing is designed to generate sustainable yet growing income over the long term. The keywords here are sustainable and growing.
By sustainable, it means that your income is long lasting. It always come on a regular basis for as long as you stay in the business.
The best thing is your income will not just flow constantly, but it’s getting bigger and bigger as the time goes by, like snowball effect.
But most people just want it big time in the beginning and do not have the perseverance to grow their income patiently.
I have a story that illustrate the power of network marketing well.
There were two sons who were about to receive inheritance from their father. In his will, the father gave his children two choices on how they would like to receive the estate.
The first choice is to receive $1 million dollar worth of estate in one lump sum and the second is to receive 1 cent worth of investment that doubled every day for the next one month.
They can both choose the $1 million estate or 1 cent investment. The older son chose the $1 million, hired the best business consultant in the country and quickly devised a plan to grow his money. The younger son, on the other hand chose 1 cent investment that doubled on daily basis.
Two weeks later, the two of them met. The older brother had already made 10% pure profit from his business, while the younger son only got around $80 in his investment. The older one, feel pity on his brother, begged him to go to the lawyer and ask for a plea to change his decision. The younger one refused.
One month had passed since they received the inheritance. The older brother had done very well and made around $300,000 in profit, but the cost of the consultant is about the same, so he basically had the same net worth of $1 million. Meanwhile, the younger brother had net worth exceeding $5 million!
This is the power of compound interest, the best discovery of mankind according to Albert Einstein.
So what’s the lesson from this story? There are two major points that I want to highlight to you. First, in network marketing, you start as one and over time your team grow exponentially.
This is the leverage of duplicating your effort to your downline, If you’re in the usual direct selling business, you’ll have sold 7 products if you sell one daily for one week. With network marketing, you have a total of 64 (2 to the power of 6) downline from the same one week time and effort.
Second, halfway through, you might not feel you’ve gone as near to your goal, but believe me, you’re well on your way and you’ll soon experience massive growth if you just stick to the rule. Just like you’re eating hamburger today, you won’t instantly get fat the next day, but over the long period of time of constant consumption, you’ll see the effect.
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Posted in How Network Marketing Works |
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