Adam’s Peace

This is the post that was nuked by the server outage. Fortunately, most of the post remains, except for the introduction at the beginning, which I’m typing from memory. I appologize that I hadn’t reposted this yesterday, however, you can’t argue with a migraine.

This is really two posts combined into one… I started writing it on Monday, when I actually took a real look at AGLOCO and liked what I saw. The second half is me nerding out, going over a whole bunch of numbers. The question that I want to address before getting into what I have already written is, what does money have to do with inner peace?

Well, if you don’t have enough money to meet your basic needs, which includes the occasional luxury, such as watching movies in a theater, or going to an arcade, then the answer is obvious: when trying to live in society, not having money causes suffering.

Whether your intentions are based on love or fear, whether you want to give of yourself to make the world around you better, or receive to make just your environment better, having enough money to meet your basic needs is important to having enough financial freedom to increase your peace and joy.

Passive Income.

That’s the dream of bloggers, right? Well, sadly, the vast majority of bloggers find that it takes a lot of hard work to create a large enough revenue stream for blogging to be more profitable than flipping burgers. I myself have yet to see any monetary profits from my blog (but I must say, the non-monetary value has made it well worth it).

Well, how would you like to make a small profit doing what you are already doing? If you are reading this blog, you probably spend a semi-substantial time online. I won’t say that the profits will be drastic, and for many people, it may not even match the cost of having a connection to the Internet… but a penny saved is a penny earned.

We all view ads, whether online or on television. When we go to the movie, we spend an average of ten minutes watching ads for other movies. When we drive down the street, we see ads all over the place, from signs in front of and on buildings, to billboards, and even in some places, elaborate viewscreens. We see those same screens in ballparks, along with hundreds of static and scrolling signs.

The taboo on the web is to click on your own ads, or to ask people to click on them for you. That’s just bad juju, because you’d be earning money that is targeted at your readers, not at the authors of the site. It really is an unfair practice, and while I think that some ad networks can be a bit heavy-handed, all in all, it is good to discourage people from clicking ads just for the sake of earning more money.

Not so with AGLOCO, though.

AGLOCO is a Multi-Level Marketing company, with each ‘employee’ also a customer. Yes, it’s an MLM, also called Network Marketing. Aren’t those bad, though?

Well, not really. It depends on how they operate. Let’s take a typical MLM, such as USANA, and compare it to AGLOCO.

USANA: Heavy incentive to sign up more people. USANA associates get a decent check for each person they sign up.
AGLOCO: Moderate incentive to sign up more people. There is no direct incentive for the ’sale.’ Signing up a person who doesn’t participate in the program earns you a total of 0 incentives.

USANA: Heavy cost to sign up. They have packages ranging from just under a hundred dollars to nearly a thousand dollars. Signing up with the bare minimum still costs money.
AGLOCO: No cost to sign up. That’s it. There’s nothing to pay to sign up.

USANA: Heavy cost to maintain. In order to be eligible to receive your payments, you must spend (or sell) 100 points (about $1.10 per point, depending on the product) worth of their product each month.
AGLOCO: No financial cost. Simply browse the Internet. If you surf for 5 hours in a month, then you earn 100% of the incentives. If you surf for 1 hour, then you earn 20%. It isn’t specified, but I suspect that you must be actively surfing, not simply keeping your browser open.

The Catch:
USANA: It is incredibly difficult to get a ‘downline,’ or people who sell the product under you, namely because of the high cost to start and maintain the business. If you are not incredibly determined, it will take a long time before your loss becomes a profit… Even then, it still takes a while for that profit to be enough to live off of.
AGLOCO: While browsing, there will be ads showing up on a bar below your browser window. That’s it. If you browse for five hours in that month, you can close down the ad bar, and open it up again next month. You don’t get extra money for clicking on the ads… It is all time based.

Bottom Line:
USANA: High cost, no guarantee of recovering your losses.
AGLOCO: No cost (other than time, and the temptation to buy something from an ad), which means that your first check will fully recover your losses.

There’s a little calculator on the AGLOCO site that tells you how much you might earn, depending on how many people you refer. If you referred nobody, but surfed for 5 hours, you would get 5 points… If you referred 1 person, who also referred 1 person, you would earn 11.25 points. If you referred 2 people, who also referred 2 people, you would earn 82.5 points. (Such is the power of exponents.) 3 people referring 3 people would give you 458.75.

Now, they have not released a pricing table yet (they are still in beta testing)… but even with one cent per point, recruiting 3 people, who also recruited 3 people each, would earn enough for a pack of cigarettes… free. Four people would almost pay for your internet service… Five would give you a nice meal at a restaurant… Eleven people, each recruiting another eleven people, would pay my rent, car insurance, car loan, utilities, and grocery bills… if each point was only worth one cent. If I were John Chow, with over 600 first line signups and over 6,000 others in his downline, I could be a full time blogger without my wife giving me a second glance.

Seriously, what do you have to lose? If you would rather have points going to John Chow, rest assured that he is the person directly above me in my upline. (I wonder who is in his upline… They must be very happy right now.)

If you are worried about this being a pyramid scheme… Well, in order for something to be a ’scheme,’ it has to be taking money away from the bottom layer. Since it is taking the money from the advertisers, who are more than happy to spend that money so that you’ll view their ads, there is no scheming involved. No risk + exponential gains = as close to passive income as it comes. All that you need to do is convince people that yes, it really does not cost any money.

Now, I did a bit of figuring into what the actual income could be. Be prepared for numbers and formulas.

First, if you don’t have a downline, each hour that you keep the AGLOCO bar up, you will be earning one hour point, up to a maximum of 5. One hour per hour is all fine and dandy, and if you never get another person recruited, it really isn’t bad at all.

If you do create a downline, though, by recruiting others, then you’ll get a quarter of a point for each point the people under you earn. For each hour that these people spend online, you get 0.25 points, up to 1.25. Here’s the difference between most MLMs and this… The rate doesn’t change at all within your downline. In other words, a person who you recruit directly can give you up to 1.25 points per month, and a person on your fifth level can also give you 1.25 points per month. In reality, each hour that any person spends with the AGLOCO bar up, he will be creating 2.25 points, one which he keeps for himself, and 1.25 which gets split evenly throughout his upline. Keep that number in mind for a bit, because it is essential to figuring out how much you’ll really earn.

One of the methods that AGLOCO will use to earn money is through affiliate searches. They haven’t released which search engine they’ll be using yet, but they quoted one of Google’s figures, which is up to 10 cents per search. Now, that “up to” worries me a bit, but for the sake of argument, let’s assume that the average value of a search is 5 cents. The managers of AGLOCO will take ten percent off the top, leaving us with 4.5 cents to share. In other words, each search is worth money in your pocket. How much money you get is simply the number of searches made, times the average price per search (minus 10%), divided by how many points there are to be awarded. Since each person creates 2.25 points per hour, up to a total of 11.25 points per month, we can get a pretty good guess as to how much each person will be paid per search… 4.5 / 11.25 = 0.4. In other words, if each and every member didn’t have a down line, and only made one search per month, they would get 0.4 cents point per month (not counting the other ways of earning money).

PLEASE REMEMBER that the price is just something that I am assuming. There are many, many other factors… I’m am just working on one factor, based on my own assumption of averages. I would never guarantee these prices… Besides, my math may also be faulty. If it isn’t on the AGLOCO website, then just take it as someone’s opinion, which could be wrong.

Now, raise your hands if you use a search engine more than once each month. How about more than ten times a month. More than a hundred? Ahh, there are a few hands lowering… How about more than 150? A few more hands down… Let’s assume that the average user only makes 100 searches per month, which they expect will be absolutely free, and do not expect to get paid for any of them. That turns our 0.4 cents per hour into 40 cents an hour. Yes, it’s not quite minimum wage… In fact, it’s an absolutely miserable salary. If you have absolutely nobody in your downline, and you had an earnings of 40 cents per hour, that leaves you with $2 at the end of the month.

$2 isn’t impressive at all… except that you only have to change minor habits and put up with ads for five hours a month in order to earn it.

Now, here’s a bit more math… If you recruited one person, who in turn recruits one more person, on down to your fifth level, then you’ll be earning 6.25 extra points for those five people. That gives you a total of 11.25 points, which if we’re assuming that we’ll get 40 cents per point, becomes $4.50. That’s enough for a pack of cigarettes. If you recruited two people, who each recruited two people, on down to your fifth level, then you’ll have 62 people under you. With each person giving you 1.25 points directly, that brings in 82.5 points, which adds up to $33. Congratulations, for the cost of recruiting two people, bothering with ads, and changing your search engine, you are now paying your internet bill.

Let’s say that a few months pass, and you convince one more person to join. While you were working on getting him to join, the people below you were also working on getting more people to join… By the time it all evens out, perhaps in another month, then you could find yourself with 363 people below you. (That’s recruiting three people, who recruit three people, etc, to your fifth level. The actual number of people will vary, but if you can convince three people, what’s to stop each of those from also convincing three other people?) With 363 people, each giving you 1.25 points per month, the earnings jump to $183.50.

Now, my personal threshold for quitting my current job and becoming an exclusive blogger is $4,000 per month. To do that, I need 10,000 people somewhere in the downline. Looking at the spreadsheet I made, that number comes up very quickly, at 6 direct referrals, each with 6 of their own referrals.

Now, I have no idea how likely that is… but it seems like an easy enough task. If I can convince six people to sign up, then I’m already on my way to being independent. The real crux, though, is finding out how many people the average person can sign up. For that, I’m going to take a nice, long, deep look at John Chow’s statistics so far, and see if I can figure out where the numbers are going.

At the time when he posted his stats, he had 625 direct referrals. (It is now at least one higher) He also had 5402 extended referrals. Since John is a very special case in more than one way, I’ll be splitting his extended referrals up by his direct referrals, giving an average of 8 extended per direct.

Since AGLOCO is so new, this really isn’t a surprise… The direct referrals have just learned about AGLOCO through John, and are working on learning how to spread the word effectively. John has already had a lot of experience with AGLOCO’s predecessor, so his high number of referrals really isn’t surprising.

What his numbers tell me, though, is that for each person who signs up under me, I could expect about 8 people to sign up under them, somewhere in their downline. That changes the math quite a bit. Instead of using powers of the different numbers, I’m just taking a number and multiplying it by 8. 1 person = 10 total (Me, Him, and his 8.) That brings 16.25 points (9 times 1.25 plus my 5) or about $6.50. Two direct referrals would bring 19 total, (Me, Them two, plus each of their That brings in 27.5 points, or $11. As the system evens out, though, and people gain more experience, those eight people per direct referral will add up to 16, then 32, and onwards. Also, once AGLOCO goes live, people will see that it really isn’t too good to be true… It’s just right. That will bring in even more people.

Anyways, sorry for nerding out on everyone so badly… I just like numbers. This looks like a good opportunity to make some semi-passive income, whether you are motivated by greed or love. For greedy people, the answer is obvious: the more people you refer, the more money you get. For the loving people, the more people you refer, the more people get money. Just in case you didn’t click earlier, here’s the link one more time: AGLOCO

This entry was posted on Saturday, March 3rd, 2007 at 9:46 am and is filed under Joy, Personal Finances. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.