How We Rate Business Opportunities
Our Residual Income Rating measures how well a business opportunity supports building true residual income — income that continues without ongoing work requirements.
Why residual income? It's the only metric that matters for long-term financial freedom. One-time commissions require constant work. Residual income compounds.
Rating Scale
Automatic Disqualifiers
These result in an immediate 0.0 rating:
- Promised passive returns — Company promises daily, weekly, or compounding returns without clear product/service delivery
- No real product — Company has obscure, vague, or no actual product that people use
- Regulatory shutdown — Company has been shut down by FTC, state AGs, or equivalent regulators
Scoring Factors
1. Per-Customer Residual Income
40% weightThe single most important factor. How much do you earn monthly, residually, per customer in your organization?
| Per-Customer Residual | Score |
|---|---|
| $100+/month | 5.0 |
| $50-99/month | 4.0 |
| $25-49/month | 3.0 |
| $10-24/month | 2.0 |
| $1-9/month | 1.0 |
| $0 or unclear | 0.5 |
Note: We calculate real dollars earned, not percentages of "Business Volume" or points. Many companies pay on inflated BV numbers — we cut through that.
2. Residual Penalties
20% weightDoes the company penalize your residual payout rate if you stop producing — or keep money that should be yours?
Natural and fair: Your team volume drops from $10,000 to $5,000, so your 10% commission drops from $1,000 to $500. That's just math — less volume means less commission. No problem.
Penalty (what we score against): Your team volume drops to $5,000, you "lose your rank," and now you only get 5% instead of 10% — so you earn $250 instead of $500. The company kept $250 that should have been your residual.
| Policy | Score |
|---|---|
| No penalties — you keep your rate on whatever volume exists | 5.0 |
| Simple annual renewal fee only | 4.0 |
| Rank/rate drops if team volume falls below threshold | 1.5 |
| Must maintain personal production or enrollment quotas to keep rate | 1.5 |
| Arbitrary commission cuts or clawbacks | 1.0 |
| Multiple penalty mechanisms combined | 0.5 |
The question: If your customers keep buying but you stop working, do you keep earning the same percentage on the volume? Or does the company cut your rate and pocket the difference?
3. Company Stability
15% weightHow likely is the company to be around long-term, protecting your residual income?
- Longevity: 10+ years = bonus, under 10 years = penalty
- Comp plan changes: Never changed = bonus, any changes = penalty
- Commission history: Never missed a payment = bonus
4. Product Value
10% weightWe evaluate two things: Is this a legitimate product people actually use? And is the price reasonable compared to alternatives?
A. Product Legitimacy
Is this a real product that solves a real problem or provides a real benefit?
| Indicator | Score |
|---|---|
| Clear, useful product with genuine demand | 5.0 |
| Legitimate product but niche appeal | 3.5 |
| Product exists but questionable utility | 2.0 |
| Vague, unclear, or no real product | 0.5 |
B. Price Reasonableness
How does pricing compare to similar products customers could buy elsewhere?
| Pricing | Score |
|---|---|
| Competitive with retail alternatives | 5.0 |
| Slight premium (10-30% above retail) | 4.0 |
| Moderate premium (30-50% above retail) | 3.0 |
| Significant premium (50-100% above retail) | 2.0 |
| Extreme premium or no comparable products | 1.0 |
Final Product Value score: Average of Legitimacy + Price Reasonableness
5. Transparency & Simplicity
10% weightCan an average person understand how they'll get paid?
- Simple, clear comp plan = 5.0
- Complex with many ranks/bonuses = 2.0
- Hidden or unavailable = 0.5
- No published Income Disclosure: -1.0 penalty (compliance risk)
6. Policies & Procedures
5% weightDoes the company have loopholes that can strip your residual income?
- Termination for minor violations
- Company ability to change terms without notice
- Unreasonable restrictions on your freedom as a marketer
What We Note (But Don't Score)
Startup Costs
We document costs but don't penalize the rating. High costs increase your risk (80/20 rule applies), but don't reduce residual income potential.
- Under $500: Accessible
- $500-1,000: Reasonable
- $1,500+: Danger zone
Regulatory History
FTC settlements, warnings, and investigations are documented but don't affect the score — unless the company was shut down or materially damaged.
A company that settled and complied shouldn't be penalized forever.
The Formula
Final Score = (Per-Customer Residual × 0.40)
+ (Residual Penalties × 0.20)
+ (Company Stability × 0.15)
+ (Product Value × 0.10)
+ (Transparency × 0.10)
+ (Policies & Procedures × 0.05)Why This Matters
Most "reviews" focus on income disclosure stats ("X% earned nothing") or product quality. Those matter, but they miss the point.
The real question is: If I do the work to build customers, will that income continue? Or will I have to keep grinding just to maintain what I built?
That's what our Residual Income Rating measures. A company can have great products and still score poorly if they require monthly volume maintenance. A company can be newer and still score well if they pay high per-customer residuals with no strings attached.