Hundreds of thousands of people are trying to build a successful home based business with network marketing. Indeed, Robert Kiyosaki calls it the ‘The Business of the 21st Century’.

But how does network marketing – also known as multilevel marketing or MLM - stack up against other options if you are looking for residual income opportunities? Three questions spring to mind:

1. Can MLM earn you substantial residual income?

2. What are the drawbacks – if any?

3. Is it the only game in town, or are there other options?

Can you earn big money with an MLM home based business, or is it a scam? Well, I’ve spent the past 18 months or so as a distributor with one network marketing company. It has not brought me riches, but I am completely convinced that it has the potential to do so. I say that because I know other distributors in the same company who are doing very well indeed. So it can work.

However, detractors point out that you have to get other people to join up as distributors if you want to achieve high income levels. You don’t get rich selling a company’s products, they say, you get rich by recruiting other people into your team – and your team then make the sales that builds your residual income.

In my view, that’s not a huge problem provided it’s relatively easy to sell the company’s products. If the products are easy to sell, that means that you are bringing other people into a genuine money making opportunity.

The two main issues I have with MLM are the need for ‘selling skills’ and the fact that you are dependent on the long term financial health of the networking company.

You do need decent selling skills to make money at MLM. Either you’re selling product or you’re selling the opportunity to potential new distributors. If you don’t like selling, your chances of making large amounts of residual income are low.

But what if you do well, and build a decent income? What happens if the company goes bust, or something else nasty happens to it? What if you’ve spent ten hard years building your network marketing business?

Given these issues, I believe that it makes sense to look at other residual income opportunities – either as a complete alternative, or to run at the same time as your MLM business. For example, another very popular low cost option is a computer based business. The world is your market nowadays, and many ‘internet entrepreneurs’ are earning levels of residual income equivalent to MLM. Also, with a computer based business, you may not be so dependent on the financial health of another company.