111) The Worse Risk of All

Greetings new readers!

I am happy you are here!

In America, if you have your health, you have the personal freedom to take enormous risks – even in a home business like the one Nadine and I began in 2007.

In the previous post you read about how our network marketing company used pay-per-click to generate sales leads. We called our business “Ocean View Marketing”.

We offered financial information CD’s, seminars and exotic trips to folks we recruited to sell those products to others, who all became part of our team. Sales commissions from these products and memberships became residual income once certain levels of performance had been achieved.

Since residual, or passive income is based on the performance of others on your team, that income is paid as long as certain criteria are met. It does not matter if you did not personally make the sale; only that the criteria is satisfied. In theory, this arrangement can create a stream of income that continues, indefinitely. This is the beauty of operating a business that has the capability of creating residual income. Top performers can get very rich – essentially off the achievements of their team members.

Such was the promise of “Ocean View Marketing”.

By mid February of 2008, Ocean View Marketing (OVM) had recruited about 3 individuals using pay-per-click to drive “traffic” to our company website. This was not cheap. But the promise remained big. Still, Nadine and I weren’t setting the world of home business on fire.

In December of 2007, we had purchased the M1 Masters Program at a cost of approximately $1795. This was our gateway to become home business owners/consultants (rights to build a team). But we knew the serious players were coming in at M2 for $8995, M3 for $13,095 or all three.

Although we had spent our $35K reserve on landscaping, and had virtually no cash on hand, I felt very good about our situation. We had just moved into a beautiful new home, my chip design contracting career was still lucrative, and more importantly, my unshakeable foundation for achievement was very much intact. I felt we had found the right business opportunity, that if delivered on only 25% of its financial promise, we would on a solid path to financial freedom, by way of residual (team) income.

But coming in at M2 would be a problem. We didn’t have the money.

In February of 2008, in spite of having no money to buy the M2 Masters Program, for $7950 (discounted from $8950, if we acted within 10 days) we put the M2 on a credit card.

Looking back, I recall feeling so confident, so optimistic about the prospect of coming in at M2 (and the status associated with it, to some degree), that I did not do any analysis on how I would pay the money back. I did not have a chip design contract at the time, so it was a very big risk indeed, based only on my level of confidence.

It turned out to be my first error in judgement with OVM; unfortunately, the first of many.

A month later, the cash flow for OVM was truly anemic. I had very little money for pay-per-click – my sponsors preferred channel of securing sales leads – and no other proven means of getting people to sign up.

Taking my cue from our sponsor, I decided to find a way to fund pay-per-click (at least we were getting leads with it) no matter what it took.

Taking business risks based on a hunch or overconfidence is the worst risk of all. At least when we base our decision on the facts on hand, we have done our best, even if things go bad. But taking on risks based on intuition alone is usually a symptom of being in denial – or even worse, not able to see whats in plain view.

Next – At The Dentist

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