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How to Tell If a Residual Income Opportunity is Legitimate


There are thousands of business ideas to choose from if you want to be able to work from home, including the infamous residual income opportunity choices. In fact, there are so many to choose from, it really is hard to establish which ones might be legitimate. There is no simple way to tell if a residual income business is legitimate. However, there are certainly signs that you can look for that will help you avoid being taken by a scam.

Red Flag #1 - Immediate Six Figure Income

The first red flag that you should pay attention to is the claim that you can earn a six figure income right away by doing virtually nothing. If this were true, everyone would be participating in the opportunity.

A legitimate residual income opportunity would not make such claims.

Red Flag #2 - Asking for Money

Another big red flag to be aware of is a company that asks you for money to start up. If a company is the real deal, then they should not need money from you in order to get you started working.

A legitimate company should offer to get you signed up and trained at no cost, or with a very minimal investment. Most legitimate companies that require a small beginning investment also provide products for the cost or a way to get the money back.

Red Flag #3 - Using MLM Business Terminology

Multi level marketing, or pyramid schemes, are illegal so beware of any terminology that indicates an MLM business.

Some examples of terminology to be leery of are:

  • Upline
  • Downline
  • Pyramid
  • Make Money While You Sleep
  • Sign Up Your Friends and Family
  • Unlimited Income
  • Income Based on Level, etc.

A legitimate residual income business will not require your income to be based on the recruitment of others.

Red Flag #4 - You Can't Find Any Information about the Company

You should be cautious of a company that seems to be unknown or has only been in operation for a short period of time.

You should be able to find information about a legitimate company through the Better Business Bureau. You should also be able to research the company and find out when the business started, who the owner or president is, where it is physically located and if there are any registered complaints.

Red Flag #5 - You Are Asked to Give Information about Friends and Family

As a business opportunity seeker, you should not be asked to provide anyone with personal information about people you know. This is a huge red flag and indicates an MLM business or other type of scam.

A legitimate company will either provide you with business leads or will provide training so you can find your own leads. A legitimate company will also provide you with adequate support and wants you to be successful with them, not for them.

The bottom line is to trust your instincts and to always remember: if it sounds too good to be true, then it most always likely is.

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