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Road to Financial Freedom with Network Marketing

Introduction

Overall idea is about taking charge of your income source and moving from a monthly salary to wealth building and achieving financial freedom.

Financial freedom is about automating your cash flows, your money keeps on generating more money for you hence their is enough passive income incoming that you no longer need to take care of your finances.

Quality of your money is more important than the quantity i.e. it isn’t just how much money you make, but how you make it, where it comes from. This quality of money provides better long term sustainability of your automatic cash flow generating pipeline.

Understanding of liability vs asset is also important. If you buy something for 10 and sell it for 20 than it was capital gain and not an asset because you no longer own it. Asset should make money for you for example if you invest in a cow then it generates a cash flow by selling milk from that cow. So rather than killing the cow and selling beef for capital gain, instead choose to sell milk from that cow and generate a consistent cash flow from your asset. Network marketing is about building such cash flow generating assets.

Cashflow Quadrant

When looking for building wealth and reaching financial freedom we need to first understand the Cashflow Quadrant.

Cashflow Quadrant

E B S I are the four cashflow quadrants and each of them represents a particular category of people based on their source of income.

E quadrant

This represents the people in Employee category. Majority of people belong to this quadrant and they work for some company who has employed them.

Although jobs are vulnerable still these categories are considered safe because people work hard to improve their skills required for the job security.

S quadrant

This represents Self-employed or Small-business owner. Person is still in the mindset of an employee with some independence because instead of being employed for someone else he is employed for himself.

These two quadrants E and S if often represented as some kind of slavery where your time and skills are making money for you. If you stop giving your time then the flow of income stops.

People in S and E quadrant try their best to climb up the corporate ladder but is it worth it to climb on that wall? Working hard is good but for which thing you are working hard is more important.

B quadrant

This represents Business owners. Here the focus is on building a team of people who work for you and take your business forward. Thus a person is no more self employeed rather provides employement to others.

I quadrant

I quadrant is about investors who achive financial freedom as their money works for them and generate more money. This is like the Monopoly game where you invest in real estate and then get paid for those investments.

Network Marketing

After understanding cashflow quadrant we strive for moving from E to S, S to B and B to I quadrant. Network Marketing shows the way in which a person can make these transitions to other quadrants. These transitions require change of mindset and the way you approach and view your future life.

True entrepreneur is supposed to have the qualities of self-determination, willingness to learn quickly and step out of comfort zone to achieve their dreams. As an entrepreneur you get to learn in a real-world business school, face your fears, deal with them and bring out the best of you.

Network marketing is about leveraging the power of connections. These connections are your assets. Goal is to duplicate yourself and your skills in your connections so that they can in turn create more connections. Here we are not vouching for a product and doing sales but buillding the infrastructure of communicating information, tell a great story and uplift everyone who is connected to the network.

Word-of-mouth and person-to-person relationship is the most powerful form of promotion.

Qualities of leadership is important as its all about creating impact on the lives of people, mentoring them in the same direction, duplicating your skills in your network and adding values to their life.

These qualities are true assets and network marketing is about building these assets which in turn generates money.

Another good takeaway is that we should learn to unlearn as well. There are bad habits in our routine or flaws in our thought process. So better to unlearn them and get rid of things that are holding you down.

Growth of network connections is extremely important as that increases the economic value of the network exponentially. This concept is illustrated as Metcalfe’s Law

Metcalfe’s Law

V = N2

This means that a network’s economic value is proportional to the square of network users, hence their is exponential growth as the connections increases.

Conclusion

Like I summarized at the start of the article, firstly we need to understand various sources of income and category of people based on those sources of income. Therefore we discussed about Cashflow Quadrant. Next step is to start moving from one quadrant to another and use Network marketing to help in this transition. Understading the core concpets of network marketing thus helps in building assets which can generate passive income and in the long term help us to achieve that financial freedom we are striving for. Wealth should be measured in time, that is how long you can financially survive if you stop working today. Financial freedom is achieving infinite wealth i.e you can financially survive forever even if you stop working today.

That’s all the key takeaways I would like to highlight. Going forward I will update the post with chapter wise bullet points, so that we can quickly revise the core concepts.

Let me know your feedback/suggestions in the comments.

- Ayush 🙂