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Residual Income Model

There are a variety of differing methods when using the residual income formula in the
approach to valuing a company or it’s company stock. There is the discounted cash flow model
or one may select the dividend discount method. The not-so-common method for valuing a company is the residual income model.

An Introduction to the Residual Income Model

In online marketing, one of the most common methods for quickly earning income is affiliate
marketing. You can discover the in-depth definitions and terms for affiliate marketing here. Or,
How to Affiliate Market here. But, the basics are this:

Affiliate marketing is selling a product or service for a company and receiving a commission payment for the sale.

Affiliate marketing is how many beginners online first gain their initial sale. The initial
sale is exhilarating and something to be celebrated. You can learn how to start a blog here and
quickly become an Amazon Affiliate, for example and setup your first Amazon store. This blog or
website could be about any Amazon product, line of related products or even on of their many
services. Amazon makes a sale, the online customer obtains the product or service they’re after
and you gain a small commission. Thus, it’s a Win-Win-Win situation.

This is the affiliate marketing model in its most basic form. But, what if you could make a
sale and gain the commission over and over again for as long as the customer is purchasing from
the company. Gaining recurring payments or “residual” commission payments is an example or
roughly the definition of the residual income model.

This model is what is responsible for many, Many six figure earners online. Clickbank, for
example and CJ Associate are the two largest affiliate marketing networks on the Internet.
Clickbank, and it’s fairly new Clickbank University are now responsible for helping to create
over 100 millionaires selling low-overhead digitally downloaded products with commissions as
high as 75%. Yes, you read that right, 75%!

If 50, 60 or even 75% doesn’t seem like much to you, I assure you, it’s among the highest
commission rates on the world wide web. CJ Associates, while having many Fortune 500 companies in their network, such as IBM, Dell, Overstock and eBay will only give up, on average, about 2 to 3% commission. So, with CJ, you have to be selling large volumes to equate to what you can gain per sale from Clickbank.

We, at Pure Residuals, have made money online from both Clickbank and CJ Associates (formerly known as Commission Junction.) We learned how to build our first site and began marketing it quite enthusiastically. I believe the first niche website was Golf Tips or something. And, we
sold an eBook on how to “Perfect Your Golf Swing.” This was over a decade ago. Since then, times have changed and so has competition.

But, this wasn’t a true Residual Income Model. We had to strive to gain new web visitors to our
Golf Tips website every day. This proved quite difficult when we needed to build other niche
related blogs or websites for other affiliate marketing products. So, we quickly learned that
we needed a way to sell products from Clickbank or CJ Associates (and a few others) that had
“recurring” or “residual” payments (also known as subscriptions, just like magazines.) And, if
you use the product filters correctly within these two powerhouse marketplaces, you can locate
the recurring payment products or services.

So, this residual income model worked quite well for us and some of the websites are still up
and running today. They do require unique content (articles, photos, videos) from time to time
to keep the search engines interested. But, it doesn’t take long. In the beginning it was
tough, but now we hire ghostwriters from some freelance outfits to do that on a monthly basis.
You can generally work out a nice package deal once you build a relationship with a freelance
writer and gain a volume discount. Of course, you have to look at your return on investment
(ROI) when using a freelance ghostwriter, but depending on niche and the affiliate product
you’re using, you’re in the “green”. See my affiliate resources for more information on freelancers I use.

The example we have just illustrated is great if you know How to Start a Blog and where to get
your hosting. We highly recommend Dreamhost OR Bluehost, because of their fantastic support
staff and optimized web server equipment. You don’t want to go with a “shared” hosting package, trust me here. With any decent amount of web traffic (the amount you need to create real wealth online) will cripple a “shared” hosting platform. Keep in mind, with shared hosting, you are sharing the single website server (a single computer) with other companies or people. Also, they could have pornography on the same web server and your business will be associated with it without your knowledge. A dedicate, optimized web server from Dreamhost or Bluehost is the way to go.

Setting Up The Residual Income Model for Beginners, Intermediates or Professionals

The setup for the illustrated example above is great if you already know how to perform the
steps above.

Choosing a Niche
How to Choose a Domain Name that Rocks!
Keyword Research
How to Start a Blog or Website
Create Unique Content
Search Engine Optimization – ON-Page Factors and OFF-Page Factors, Backlinks, Media
Content Marketing
Branding Yourself to Blast Past Your Competition
Online Internet Marketing

Each one of these can take quite some time to learn and then there is A/B split-testing and more
that help to create a successful website. All of this together can be daunting for the beginner. But, perhaps you have experience with one, two or more of these facets, but something is still missing that has not created the web traffic that you need to create real wealth using the residual income model.

Well, we have a solution for you.

Beyond that, whether you’re an Internet novice (beginner), Intermediate or Professional, it
won’t cost you a dime. Nope, not one penny, nada, nilch! I’m about to introduce you to the
most complete training available online today. This training contains over 500 modules, comes
with TWO fully-featured websites, LIVE support and more. And, it will cost you ZERO!

Put Your Credit Card Away! You won’t need it.

You’re about to have immediate access to “Bootcamp” training that is unlike anything else on the
web. With access to online professionals that developed a part-time and then full-time work
from home business that replaced their nine to five. Yes, real entrepreneurs that not only did
the work, but are making it happen day in and day out.

When we first came across this company three or four years ago, we overlooked it. There was a
price upfront (monthly) that we just weren’t happy with. In our humble opinion, a real
apprenticeship or affiliate marketing training shouldn’t come with a cost. Sure, a service
might, a business has to make money. But, later they CHANGED it! Now, it’s absolutely free to
join and…..

Learn While You Earn – Absolutely FREE!

This training is fantastic. We thought our website was good, but we’ve since gone away from
perfecting it, because this has it all and then some. You will gain the foundation of knowledge
you need to build a successful passive residual income online, built on optimized servers, fully
backed up and earning money without costing you a thing. No credit card necessary.

But, How do they Make Money?

There are two memberships and that’s it. No weird complicated hierarchy like so many schemes
and MLM (multi-level marketing) programs out there.

Free
Premium

The free membership is just that. Totally free. Here’s what you get:

Then, after you are earning an extra paycheck to pay off your debt, old credit cards, a few
dinners out with the girlfriend or wife, etc. you can decide IF you wish to go Premium for a
small monthly fee. But, you don’t have to…. ever. You can stay a free member for as long as
you like.

IF you choose to go Premium, the commissions you gain from introducing this business to others
is doubled. And, it is monthly, passive residual income. The perfect residual income model
business opportunity. Do you have a laptop? I work mostly from my sofa and yes, in my shorts –
sometimes I wear a t-shirt. 🙂

But, I’m sure you see the benefits here. Even if you only join for the training, that’s great.
Get the knowledge you need to succeed online. Test it out. No money needed. Earn while you
Learn! But, once you’re inside, I think you’ll be ecstatic from all the excited members in this
10 year company. Yes, they have been in business, perfecting their model for over a decade.
You can check out all the major affiliate marketing forums and see how highly respected this
company is and it shows in their membership. They are a lively and passionate group willing to
help newbies and exchange ideas with professionals. Additionally, you can talk to the owners and they will respond!