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Network Marketing

In the Rich Dad Poor Dad Book series authored by Robert Kiyosaki, Kiyosaki talks about the Cash Flow quadrant. This concept outlines the four ways people earn money for a living.

According to Kiyosaki, the four ways are E for employee, S for small business owner, B for big business owner and I for investor.

In the network marketing industry, there are four different types of distributors as well. These various distributor types make up all of the distributors in the network marketing industry.

Your goal is to figure out which area in the cash flow quadrant you are currently in with your network marketing business, and which area in the cash flow quadrant you want to be.

Are You a Network Marketing Employee?

The first area makes up the upper left hand side of the cash flow quadrant. This is the area of the E, which stands for employee.

The overwhelming majority of distributors that are in the network marketing industry are in the E category of the cash flow quadrant.

So what makes an E type distributor in network marketing?

An E distributor is any distributor that currently earns all of his or her income from the result of his or her own efforts in network marketing.

This means the only way this distributor makes any money is when he or she personally makes a sale of the product or service they offer in their network marketing opportunity.

Are You a Small Business Owner?

The second area makes up the lower left hand side of the cash flow quadrant. This is the area of the S, which stands for small business owner or self-employed. This is the second largest group of distributors that are in the network marketing industry.

So how do we define an S type distributor in network marketing?

This is a distributor that has a small team in place.

This distributor is earning some income off the efforts of his or her organization. However, the large majority of his or her income still comes from personal efforts, not from the efforts of the team.

Are You a Big Business Owner?

The third area makes up the upper right hand side of the cash flow quadrant. This is the area of the B, which stands for big business owner. A very small minority of distributors fit into this category, but not the smallest out of the four categories.

What makes a distributor a B distributor?

It is at that magical moment in your network marketing business when you realize that the large majority of your income comes from the efforts of the organization and not your personal efforts.

When you can personally go months without sponsoring any new distributors, yet still cash checks with a comma in them, you have become a B distributor.

Are You a Network Marketing Investor?

The fourth area makes up the bottom right hand side of the cash flow quadrant. This is the area of the I, which stands for Investor. An overwhelmingly small minority of network marketing distributors fit into this category.

How do you define an I distributor?

These are the distributors that make so much money from their network marketing business, they have no choice but to find other investment vehicles for the excess cash flow being generated by their network marketing business.

These are the six figure annual income earners. These are the millionaires in the industry. These are the leaders with the huge passive cash flows and the incredible lifestyles.

Your Network Marketing Business — How Far Will You Take It?

So take a look at your network marketing business.

Which quadrant are you in right now?

What steps can you take to advance to the next quadrant if you are not already in the I quadrant?

These are the questions you need to ask yourself on a regular and consistent basis if you wish to have long term success in your network marketing business.

Keep sponsoring!

Please see R. Kiyosaki's video, "Rich Dad, Poor Dad."

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