When I started in the Financial Services Industry in the 1980’s, I was introduced to a concept called renewal commission – a concept that meant that when a client paid a monthly premium I would receive a small residual payment.
To be honest this concept intrigued me because it encouraged me to service my clients and be rewarded for it. However it also had a deeper meaning for me which was the beginning of my Why Philosophy for recurring income
As my business grew I started to see my monthly residual income (renewal commission) grow month on month. I started to see less pressure on having to having to start every month at zero revenues earned because my monthly residual revenues were growing.
I then started to see that the residual revenues had a capital value attached. For example if I had €1000 per month in recurring revenues, there were people/companies that were prepared to buyout those revenues for a multiple of the annual residual revenue (5 to 10 times the annual amount)
My Online Why Philosophy
I have pretty much worked for myself for the last 35 years and have had some great years in business and also some very challenging years. For the most part my Businesses have been project based meaning when any particular month finished I was starting from zero revenue at the beginning of the following month (except for monthly recurring renewal commissions)
In 2001 I was returning from a rugby tour in Australia and in Kuala Lumpur Airport I purchased a book called Multiple Streams of Income by Robert G Allen. One of Chapters was about Online & Affiliate Marketing.
Also at that time I was introduced to a book called ‘Rich Dad Poor Dad’ by Robert Kiyosaki .In this book he talk about getting money to work for us as oppose to always working for money! Robert maintains that a house that we live in is not an asset unless it is earning money for us. This whole concept got me thinking that a website is an asset if it is producing an income for you.
I call this a Virtual Asset!!
What is a Virtual Asset
How much money would you need to have on deposit to produce a monthly income of $100. As you are well aware savings interest are very low at present, however if you were getting 5% interest on your savings you need to have $24,000 on deposit to produce that $100 per month. Now if you wanted to have $1000 per month you would need to have $240,000 on deposit and $10,000 per month you need to have $2,400,000 on deposit!!!
I describe a Virtual Asset as a website that produces a Automatic Monthly Recurring Cashflow (AMRC) for you and your Business. It can be your own website or you can be an Affiiate of a revenue producing website.
Why are Automated Monthly Recurring Cashflows important?
As mentioned earlier I used to bef=gin every month at zero revenue – what difference would it make to your life and business if you knew you had $500, $5,000 or even $50,000 coming into your bank account at the beginning of every month?
Now before you get too excited about this concept – this takes hard work and dedication of effort to produce these recurring revenues, however I do believe it is well worth the effort for any or all of the following reasons.
- Spending more time with the people in your life who mean most to you.
- Bringing about a felling of Financial Confidence
- More time freedom to do the things that are important in your life.
- Work and live from anywhere your laptop is?
- Engage in philanthropy?
You may have other reasons for creating recurring revenues in your life and business, and you don’t have to give up your job to get started building your virtual assets. I always have enjoyed the late Jim Rohn who always maintained that you “Work full time on your job and part time on your fortune”!
Finally, to help you to think about the concept of work and building virtual assets, I will ask you answer this question?
“If you decided to stop working today, what percentage of your income would you lose?
If in your answer you said all or some of your income – start building your virtual asset to achieve financial confidence and more time freedom.
I hope you enjoyed my Why Philosophy and I wish you Happy Building!!