Let's look at two different types of business.
First car mechanics, now we all have heard the saying that we all have the same amount of time in the day. The mechanic can only work on so many cars in one day. Then he is tired and has to rest and take care of family.
Now let's look at a doctor. They have the same problem as the mechanic. The doctor can only see so many people a day. They are both limited by their own abilities. This is called linear income.
Now the mechanic can go and open his own garage and have employees and the doctor can open up his own office and have other doctors working and paying him. They both get paid from the work of others in the office. This is called passive income.
If the mechanic opens up five garages or the doctor opens up five medical offices, now they are both making money off of other peoples work and they don't have to work as hard or at all. They have done all the work to build themselves to this point. This is called residual income.
The doctor and the mechanic have the same opportunity to turn their operation into a franchise and have it spread across the nation. This is called perpetual income.
If they're really good and unique they can become the market staple and your business is the industry. So as your business grows the industry grows. This is called industry profit sharing income.
They are linear income - this is when you get paid for the time you work and not paid when you are not working.
Then there is passive income - this is when you get paid for work that you have very little to do with.
There is residual income - this is when you get paid for work you did in the past.
There is perpetual income - this is when you are able to participate in income generated from the work of others and you have learned to manage without getting involved in the daily operations.
Lastly there is industry profit sharing - this is when you are in a position to take advantage of income that comes from the growth of an industry.
Some people don't have any idea as to what they can do to make extra money. Most of the time it is because people are thinking of franchises and the financial output required. This is why I am advocating starting a home based business. The tax advantages are high, the income possibilities are high, the time with family (once the business takes off) is high, total benefits are high. The negatives are that you have to have or develop a high work ethic.
I am not a fan of Linear Income but I would say that you should really keep your job until your income from your home based business triples your employment income. This way you can afford to pay for your insurance coverage, your current and future bills.
If you are unable to decide what type of business to invest in let me try to clear your thinking.
Here are some rules of thump that can guide you.
You have to be able to get paid from anywhere in the world (even though you are in one little city you want to make money from someone who is interested in another country.
You should be able to get customers through multiple medias (mailing, ads, face to face, internet, etc.)
You have to be able to make your own income from the sales you generate.
You should be able to get paid off of the work of other people (you want to get paid 1% off of the efforts of 100 people, not 100% of your own efforts)
Your business needs to appeal to a wide range of people (culture, race, religion, etc)
Your product needs to address what most of the people want and not what they need
You can't afford to look at your business through your feelings. The idea of going into business is to make money, not to make you or I feel good. You should have faith and trust in the product you are marketing.
Lastly remember when you are working your own home based business - you are really marketing yourself. People need to believe and trust in you and the product come second.
This is information is from a small section of my book which is scheduled to be released late September 2009. A friend of mine made a video that explains how he found this system and made 1.2 million dollars. You can view it at http://www.maxwelltoliver.com
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