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Is trading stocks better than having a network marketing business?
The answer to that question is really dependent on whether your mind-set is to build wealth (trading stocks) or build cash-flow (network marketing). One of the philosophies that we try to instill in the people we work with is that there are really 2 types of money. Cash-flow money and wealth money.
Here’s what I mean by that. Most people look at stocks and think that it is the way to Riches over a period of time – and if you trade them right, they are probably right (although I realize that a lot of people would wanna argue with me on that right now). But, through history, trading stocks for the long-term has proven to be a very lucrative way to build wealth BUT it isn’t a great way to produce cash flow.
Most people who have jobs invest passively whether they like it or not through their retirement savings plan that the company provides them with. Over a period of 20-30 years that savings plan will allow them to retire with a nice little nest-egg for themselves. With compounding interest, that nest-egg really gains momentum the longer the investment is not touched (and of course the market goes down). This diagram shows how the earning curve is assumed to go with compounding interest.
That is all fine and good if you like what you do BUT if you aren’t living the kind of lifestyle that you want to live, then that scenario doesn’t really help you be happy right now.
The Challenge with stock investment is that unless you are really good at it, the only way you build significant income is over long periods of time (I know, I know, some people have a knack for it and can make a fortune but they are the minority wouldn’t you say). Building a lot of equity doesn’t do a lot for the person who wants to live his or her perfect lifestyle right now.
That’s why I say that Network Marketing makes sense for people that want to create cash-flow so they can give themselves more options now rather than waiting 25 years to cash-in on their nest-egg. The thing that most people don’t understand about network marketing is that when you do the math on the business model, you get some very attractive results. But for whatever reason, most people would rather wait 25 years, be “safe” and build a nest-egg rather than take some time to learn what network marketing is really all about.
So what’s the conclusion? Network marketing creates cash-flow (when it’s done right) and trading stocks (unless you’re an above average trader) builds long-term nest egg. Both are good, it’s a matter of deciding which one fits your goals.
Until Next Time – Cheers To Your Success,
Donny Watson
Pretending I'm Cool on a Sail Boat
