A Retirement Strategy for Late-Starters

I created a niche site some time ago named "401Konundrum".  The subtitle is "Minding Mis-managed Futures".

The point of that site is the same as this post.  That is to say that there are options that can yield income that do not require having "put away" money for a working lifetime. No reliance on stock market performance and being managed in a portfolio by a professional management group.  This approach is what most people think about when considering retirement options.

What we do is an alternative, and works with the same basic principles of compounding and leverage, but in a non-traditional manner.  

We organize knowledge, people, and money.  Knowledge and people are pretty straightforward to understand in that we teach how to build and manage organizations. Understanding how money works - and understanding how and why it is a viable alternative to the "lifetime" approach is what I will explain here.

So, let's say someone has $1 million that they have accumulated in a 401K.  Being conservative and for the purposes of easy illustration, let's say that the structure of the annuitized earnings that this person is to live from is 6%, or $60,000 a year.  That is to say, there is this big chunk of money that has been earned, put away, and allowed to grow "parked and sitting" in an account somewhere that yields $60K a year that has taken maybe 40 years to accumulate to that level.

Contrast this with what we do.  

First, we foster high-quality relationships and earn trust through engagement and agreement.  Thus, the name of our community is "Agreement Seekers".

With this understanding that we are a "people first" business, we use high-margin business models that create quick cash flow.  These are referred to as "Instant Pay, Member to Member" businesses.  The price points for these are based on our Partners' risk tolerance and financial position and create momentum in generating cash flow.  Generating this cash flow is facilitated by our business process which is recruiting and enrolling others, e.g. building an organization of people who agree with what we do.

As processes and systems are learned, an organization is formed based off of the efforts of executing the processes and systems we teach.  With an organization in place, we then migrate our Members to (monthly) subscriptions with leverage components.  These subscriptions are funded out of the cash flow created in the first step, not out of people's paychecks from their day or "primary" job.

Let's say a typical subscription is $150 a month.  To derive that same $60K as in the "lifetime" approach, it would require a group of 34 people that would yield $5100 a month or $61,200 annually.  And here's what is powerful:  a group of 34 people can be built in less than a year for most people, based on the organizational leveraging components of how these business platforms function.  As such, a group of personally enrolled 10-15 will typically yield a group of 30-40.  Said differently, this "Retirement Model" requires building an organization at a rate of about 1 person per month, and at the end working with a group of about 40 people.

The key to the long-term stability of your income is fostering relationships.  At the core of how we function, are the values of loyalty and a shared commitment to competence and mentorship.  This is what we Seek Agreement to.

With all this said, if you are a late starter and have not prepared for retirement sufficiently, we simply encourage you to understand what we do and find out if you think you can make it work for you.

Quick Cash Flow

This is where we "start". 

Quick cash flow is enabled by one of the primary business models we employ: Instant Pay Offers - Member-to-Member.  The rationale behind our doing so includes these main points:

1. these are high-margin businesses with low up-front costs,
2. they infuse relatively significant amounts of cash and inspire business momentum,
3. they can be bootstrapped by enabling new partners to sell through the Mentor's account without investing risk capital, thus earning their way into the business relatively risk-free.
4. most business models enable breaking even with the first or second sale.
5. most have leverage components that have a compounding effect on earnings

Ultimately, we migrate to one or more subscriptions.  However, these inherently require a monthly commitment, with smaller dollar amounts and preferably built on the foundation of a group of prospering "Instant Pay" members.  The size and stability of this group is the "pot at the end of the rainbow" in our business model.

The thing to understand is that this is sequential.  Large, quick cash flow infusion creates business momentum.  Our members prosper through learning and executing processes for Instant Pay offers.  This is the training ground where we teach and learn skills to recruit, enroll and mentor.

Once established with a stable income, the time will come to naturally migrate people to subscriptions. This will happen naturally and "comfortably" due to the earnings from the Instant Pay income.

Here's the Truth

The following sentence is going to sound like an echo.  Building a reliable, monthly residual income relies on your being the recipient of recurring monthly income.  In most cases, this means a subscription.  Any other home business model will not provide a truly secure, passive income. Most require your ongoing active involvement in "working at it".  As such, it should go without saying that earning truly passive income involves people paying you (typically) a monthly subscription fee or an automatic re-order (which is how MLMs work with much lower margins than what we do).

Now, if you have been around what we do for any length of time, you understand that our business model is predominantly (80%) Organization Development and 20% Transacting a Business. You also know that the strength of your organization is "everything".   In fact, the "Business" could be anything. Here's the truth that very few in the "networking" industry talk about: you need to get the 80% right to make the 20% happen (long-term).  The most important variable in your business is the mentorship you provide in nurturing your business partners to self-sufficiency - supported by systems to transfer the knowledge to replicate a process.

This establishes a culture driven by core values: 1) competence through learning, 2) stability through teaching, and; 3) Growth through the execution of specific processes.  In other words, there are things you need to know and then you need to do them.

Ultimately, what we do is the best model with the most likelihood that you will earn money in a home business.  But here's the thing: you have to be competent. Our business model is focused on your competence in both the acquisition and retention of your organization. It is the only path to long-term compensation.  Long-term income is assured by cycling this ethos through generation after generation of business partners.

On the flip side, this is precisely why the failure rate is so high in the home business industry: no focus on competence, support, and accountability.  People are left to flail and fail on their own. It is a pathetic and sad commentary, but it is the reality.  And, that's the truth.

Risk Tolerance

I grew up with the expression, "too poor to pay attention".  This is a kind of tongue-in-cheek expression to describe people burdened by poverty.  Life for many is about survival and getting from month to month.  People in these circumstances are so busy getting through today, that there is no time left to think about tomorrow (their future).

The next step up this ladder is people with little to no risk tolerance due to their budgets being so tight that they can't afford to "play around" with any risks.  In other words, they have to pay their bills.  They go to work to make it so.  And this cycle repeats itself over and over and over - in many cases for entire lifetimes.

Given this reality, there are really two perspectives as they relate to what we do:

1. These people are simply not a match for what we do.  They are better off keeping on the path they are on because they literally can not afford to take a risk.  What we do is not for everyone, and this is a major reason, among many others.
2. Of this group, if credit is available to do so, they can borrow money and pay it back in increments out of revenue generated by our business, over time.

This is the OPM (Other People's Money) approach.  Yes, it requires people to assume debt and this is precisely why it requires risk tolerance.  People are taking the risk of borrowing money and assuming the additional risk that they can make our business work for themselves.

Credit used in this manner can do great things in getting people started.  It is an initial step that gets people in the game.  Our role is to help people assess if borrowing money to get into business with us makes sense for them.

BOBO's

Before starting this post, I Googled BOBO simply to see what I would find.  In Filipino, it is a word that means smart or perceptive.  In Spanish, it means dumb or dull.  It is interesting that these are somewhat opposites.  Then, there is Bobo the Clown (also acknowledging Bozo).  In this post, I add my own definition for BOBO.

In our business, we specifically target groups of people similar to us.  We refer to this as Affinity Marketing.  I won't dive deep into that here.  However, depending upon the statistics you look at, anywhere between 50% and 80% of people hate what they do for work (and) if hate is too strong a word, let's say they could "take it or leave it" in regard to what they do to earn money in supporting themselves and their families.

Of these people, there is a huge "slice" of folks who are Bordering On Burn Out. (BOBO)  They metaphorically "hold their breath" every day and can't wait for their workday to end.  Wednesday is hump day and all Thank God it's Friday...  Essentially, they have "had it" with what they do to earn a living and pay the bills.

The question is how we reach these people?  Intuitively, you would think of this huge slice, there would be a percentage of these people who are open to and looking for (at) alternatives.

To differentiate, these are not "opportunity seekers" who are actively looking for something.  These people do not yet know that alternatives exist and are droning through their lives with complacency and acceptance of their personal status quo.  It reflects the adage of people "living lives of quiet desperation".

My belief is that a mass marketing approach will not reach these people.  Advertising, social media, and any other form of content, graphic or otherwise, will just get absorbed into the context of a "pitch" or "one of those things". 

As such, to reach the BOBO's we need to engage personally.  We need to establish relationships and find out what makes people tick and what keeps people stuck.  We need to take deep dives into people's lives and find out how much they want to change as a precursor to the level of commitment they are willing to make in adapting their lifestyle to manage a home business.

This kind of outreach is inherently 1:1.  It is slower, it is deeper.  It is establishing and growing relationships.  This can be done online or offline and is at the very core of how our business model functions.

A Funnel and Two Buckets

Hmmm... a funnel and two buckets... Sound like we're changing the oil in your car? Not quite.

Anyone who has been around marketing for any length knows what a marketing funnel is. Essentially it is a process of exposure, then education that progressively narrows people who have been exposed to your message, then take the initiative to learn more - and ultimately choose to buy what you are selling, join what you are doing, or respond to what you are saying, etc.

The funnel is a front-end business process. Like any process, it has steps to be followed (and as such) is able to be replicated, no different than a recipe when cooking any food. It is a do this, then that approach. We have and we teach how to use our front-end marketing funnel.

Then we have two buckets for two different purposes. Bucket number one holds recurring income money. Recurring income happens by selling something, like a hot dog vendor. You can make a living with a recurring income, but you must go out on the corner with your hot dog stand every day and sell hot dogs.

Our hot dogs are referred to as "Cash Now" offers. I will not explain these extensively here, just suffice it to say that they are not perpetual and they have to be worked at and "sold" every day to keep the money flowing.  These are characterized as "Peer to Peer, Instant Pay" programs.

In our second bucket, we place people (and money) from bucket number one into subscription offers where we build a recurring income that is truly residual. Residual income is income that continues after the completion of the income-producing work. The income-producing work we do is educating people about the viability of our business model. then have them "agree" to participate and join us in "subscribing" to the platforms we recommend... month after month, year after year.

In rough terms, this is our business model. A funnel and two buckets. The goal and the vision are to create replacement "walk away if you want" income. "Freedom" only happens if you have an organization in bucket two.

We use bucket number one as "feeders" for bucket number two, and we go to work every day because Bucket One Money requires it. Then people self-select and choose Bucket Two and fill it to whatever level they desire - all predicated by skills, knowledge, competence, integrity, reputation... and all the things we talk about in our Community.

The Sunday Night Dreads

 A big portion of the demographic of our target audience are professionals who are burnt out (for any number of reasons) and looking for income alternatives.  These people are looking for a "choice" with the opportunity to take their life in a different direction.

I get it.  I was one of them.  Every week, there came the point on Sunday night at 8:00 - right after 60 Minutes - that I would feel a sense of dread wash over me.  It was the dread of another week doing something I "had to do", but it was not necessarily something I "wanted to do".  

I had to earn money to support my family.  I had to go to a job and work with people I did not necessarily like and take direction from people I did not necessarily respect.  I was working to make a paycheck with no sense of purpose or passion.  It was a means to an end and in retrospect, it was year after year after year conforming to organizations I worked for.  It was a regrettable use of my time and talent.

Here is the thing;  I am just one of millions of people in the same boat.  There are men and women everywhere in all walks of life struggling with the same thing - hating what they do. but resigned to their fate of "job security" and the paycheck they derive from it.  Even high-earners with great benefits with a "sweet" match for their 401K... many would not choose their lifestyle and are open to an alternative - if constructively and plausibly proposed.

There is not really much more to say, other than from a business perspective, how we get what we do in front of these people.  Sunday Night Dread is both an interesting marketing angle, as well as a conversation starter.

There are millions upon millions of people going to a job every day who would choose not to - if they knew what to do in pursuing an alternative.

This is what we do.

Your "Net" After Taxes

 This is a quick bit of perspective and advice.

Many business opportunities in our space never talk about taxes, other than to say that "taxes are your responsibility".  Right up front, you should know that if you want to build a long-term, sustainable business, you should learn about (and) pay taxes on the money you earn from your home business.

As such, you need to know that you may be earning 100% commissions in some programs, however, you also need to know that these earnings are taxed at 15.3%.  As such, for every $10,000 you make, you "net" 84.7%, or $8,470.00.

Some programs will send you a 1099 Self Employment Tax Statement.  Others may not.

In either case, be smart and put the $1530 in a savings account (or any place you won't touch it) so it will "be there" when you need it to square up with the government at tax time.