This article will present several shortcomings that can be attributed to any residual income affiliate program and how the majority of residual income programs lie about their members success rate.

The myths behind any residual income affiliate program [part I] – Definition

Residual or passive income is defined as an income stream which, after initial, successful set-up, ensures an influx of money without the need of active action. In other words, a passive income stream, is an asset which will provide you with recurring payments once you have put in the effort to set it up successfully.

A residual income program lies in the domain of multi level marketing (further referred to as MLM). MLM is a particular form of commerce and wealth exchange. In multi-level marketing you are paid to recruit new members and introduce them to the MLM concept, you then get your commission based on how many new members you have introduced into the program. You will receive further payments, once these new members become active and start, in turn, enrolling fresh members on their own.

In theory this “pyramid-like” business plan, allows for passive income generation and residual payments. Typically, the members of a residual income affiliate program will be engaged in finding new members to enlist, buying into the whole idea of the MLM concept.

The myths behind any residual income affiliate program [part II] – The pitfalls behind an MLM

Mis-information on behalf of MLM systems is a plenty. Here are examples of common myths behind an MLM system:

* Provides “real” residual income (“real” meaning that once initial effort has been put in, an MLM will act like a passive income resource)
* A residual income affiliate program generates wealth
* Recruitment is easy and will not require any effort on your part
* People are waiting to get into one

The myths behind any residual income affiliate program [part III] – Further explanation of the pitfalls

We have already defined “residual income” previously. MLMs, do not usually, fall into this definition. Merely recruiting new members will not be enough to establish a source of passive income. New members will have to be “spoon-fed” by you, as they often times do not know how to proceed in getting new members themselves. Thus you are bound to either work and educate your recruits or constantly recruit new and ever new member. It goes without saying that this will result in massive workload for you.

Why are new members so unsuccessful at the recruitment process? Simply because a residual income affiliate program is not able to generate new wealth. Wealth is generated by the conversion of an initial investment into some form of profit. As MLMs do not, usually, provide a product or a service of benefit to the consumer, the whole scheme boils down to the transfer of wealth and not wealth generation. In other words residual income affiliate program will fail because they are unsuccessful in generating wealth due to a lack of a quality good or service.

This, in effect, results in a tedious and complicated recruitment process. Somewhat skeptical individuals will not join this kind of network, for the fear of getting a zero return on their investment. Some people can’t wait to get into MLM networks, they are, sadly, the exception.

The myths behind any residual income affiliate program [part IV] – Conclusion

MLMs do not qualify as a true source of passive income. A consistent and continued effort is an absolute requirement if you want to derive some form of income from an MLM network. In this article you have learned that:

* MLM networks do not generate wealth
* Do not qualify as a source of passive income
* Require a massive effort to generate a stream of income
* Are mostly lacking a quality good or service

Gregory D. Loyd is an experienced affiliate marketer specializing in article marketing. Gaining his knowledge by being part in several high ranking Internet marketing campaigns, Gregory is here to share information on the inner workings of the industry as well as share his experience as an Internet marketer.

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