If there are any Network Marketing companies reading this post maybe you could consider changing your compensation plans to meet the Perpetual need.Īnyway, we are looking for this elusive company so if you find it let us know. Now doesn’t Perpetual Income sound like the type of compensation you would like to have? occurring continually: indefinitely long-continued We are looking for a company that defines their compensation as Perpetual.Ģ. That just doesn’t set well with us and we want to see a more positive message in the company’s compensation plan we choose to represent. Being derived from residue, residual resonates of something that was left over after the company took everything. Well, we don’t like the way residual sounds. Now you may be asking yourself why we are being so picky about the terminology that the company has chosen for the name of their compensation plan or the terms they use to describe it. Webster’s Definition of Perpetual Perpetual Income Webster’s dictionary defines residual as a residual product or substance. We checked the Webster Online Dictionary and the word Residual comes from the Latin word “Residue”. Now really, why would Network Marketing companies refer to their on-going income streams as Residual Income? Think about it, Residual income is what would be left over after some event or occurrence. Economic value added (EVA) is a commercial implementation of the residual income concept. The deduction, called the equity charge, is equal to equity capital multiplied by the required rate of return on equity (the cost of equity capital in percent). Residual income is the leftover cash that is available to the company, individual, or shareholders after all debts and expenses have been paid. If you are a network marketer or you are just investigating the whole Network Marketing arena, then you should ask yourself this same question. Residual income is calculated as net income minus a deduction for the cost of equity capital. “So why then would we want to settle for something called residual income?” In our quest to find the company that we will represent with our marketing efforts we hope to eventually choose a network marketing company that will pay us a Perpetual Income and will compensate us for the hard work that we will be performing to promote them! What we mean by this is that we want to earn a steady ongoing income for the remainder of the foreseeable future. Residual income is a common concept used in valuation and can be defined as the excess return generated over the minimum rate of return (often referred to as the cost of capital) of the net income. But why is it called Residual Income as opposed to calling it something more positive like Perpetual Income? The idea behind residual income compensation is that you are compensated based on your efforts in marketing their product and or services. If you review the compensation plans for any network marketing company eventually you will see something that they call Residual Income, some companies also call this Passive Income but we see it mentioned as Residual Income more frequently.
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