Lately, I’ve been reading The Warren Buffett Way by Robert G. Hagstrom. Hagstrom writes about the fascinatingly simple principles that have guided Warren Buffett’s decision making in investing over that past 60 years that have allowed him to accumulate such immense wealth.
Warren Buffett’s formula for investing fundamentally has not changed since his first fund was established over 50 years ago. Buffett never gets distracted by fads or promises of explosive returns. So called experts have often criticised him for his stubborness and his “old fashioned-ness” and yet he’s always had the last laugh when their bubbles burst.
Whether he’s buying stocks or buying entire companies, he has the mindset that he is going to keep that business forever. Therefore he looks at the business both quantitatively and qualitatively to be certain that he’s making the right decision.
Some say, Buffett spends 8 hours a day at his office, reading annual reports and trade journals with the goal to make just one good investment decision every year. Just one!
He does a ton of research on a company and its executives to make sure they both have integrity because he wants to be certain that what he invests in will continue to grow and prosper long into the future.
In the book The Warren Buffett Way, Robert Hagstrom writes…
“He looks for companies he understands, with consistent earnings history and favourable long-term prospects, showing good return on equity with little debt, that are operated by honest and competent people…”
Network marketers ought to use the same approach when it come to choosing the company they want to build their long term residual income with. Work hard and build it once. Then enjoy the lifestyle. That’s the Big Promise of MLM. You DO NOT want to have to build it over, and over again.
If you just want to build it once, there are three things that are critical to your long term success in an opportunity.
- It’s important that you understand the business model of your company.
- It’s important that your company has consistent earnings and its products have long term residual value.
- It’s important that your company is run by good people who are honest and have integrity.
Unfortunately, most people are building their MLM businesses “by gosh and by golly” without understanding any of these fundamental aspects.
The strange thing about this business is not many people do their due diligence on an opportunity that could dramatically change their life. They think “Oh, it’s just a hundred bucks to sign up… what have I got to lose?” It doesn’t become apparent until they lose the downline that they’ve worked so hard to build.
Too many people are attracted by the hype and the glitter and because of that, too many people have been burned in this industry by start up companies that explode and then collapse after two years.
Too many people have had their dreams destroyed by scams disguised as legitimate network marketing opportunities because they didn’t understand the business model and they didn’t know the guys running the operation were crooks.
The third point is the most important. The company has to be run by good people with integrity, with distributor’s interests at heart.
When looking at your next opportunity be sure to know who’s at the helm. Look at their history. This will really give you a good insight as to whether the opportunity is a scam, and if the company will be around for the long term. If the executives of the company are not listed on the company’s website, RUN!
Thankfully, today you have a very powerful tool to assist you in doing your due diligence. It’s called GOOGLE. Please use it.
To your MLM success,
Wayne Wu
Founder, The Profitable Networker
P.S. I would love your input! If you have an opinion that would contribute to this discussion, please leave me a comment below.
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