Residual Income: What Is it?
By: Michael A | Posted: 01st August 2007
So what exactly is residual income and why is it important?
Residual Income (also known as passive or recurring income) is income that you receive continuously for work that you did once.
Let's repeat...
Residual Income (also known as passive or recurring income) is income that you receive continuously for work that you did once.
One of the best things about residual income is that it is yours to keep indefinitely. You can get a regular check every week or month once a solid foundation is built and you can be wasting the day on a beach or somewhere exotic, skiing down a mountain in Europe, sailing in the Caribbean, traveling around the US in your new camper, or just sitting at home enjoying your freedom with your family!
Imagine, if you will, a weekly check that comes in like clockwork. What would this mean to you and those you love? Let's compare that to a day JOB, which is also called, "Linear," Income, or a payment that you receive from going in to a place of business day-after-day, week-after-week, year-after-year and giving your employer much of your time and efforts. You receive your check on payday in the form of wages and/or commissions while paying the most taxes the law will allow.
Having a "regular" day job or getting paid by commission is still a "one-shot-deal.This means that if you get fired, quit, or something unplanned happens to you, your paycheck will stop immediately and you are left searching for another day job so you can make ends meet. It is a sad state of affairs that many people are just one paycheck away from not being able to make their housing payment!!! This is what living "paycheck-to-paycheck" really means.
There are many different ways to create this "residual" income. You could write a best-seller, invent something, get lucky in the stock market, or own a successful life insurance company. Most residual income-generators are difficult and require an investment of quite a bit of money or require special skills and talents and lots , not to metion lot of time and effort. Do any of these sound like a possibility for you?
Most folks know that another supposed source of residual income is MLM, multi-level marketing. Even if you are a seasoned expert in the MLM building business, 95% of those who you recruit will fail miserably and make very little or no money at all! That wipes out any hope for long-term residual income for you.
Most MLM companies also require what is called an "auto-ship," where month after month you cringe when UPS drops a bunch of nutritional products on your doorstep that cost you from $100 to sometimes HUNDREDS of dollars per month! If you are like most folks, you can never drink the "power drink," or choke down all those pills, so your closet or your garage stacks up with boxes of "stuff" from your latest MLM business!
Also, most people could not maintain spending that $100 every month for very long when there is nothing coming in. Like you, most people never even make enough to cover their auto ship, let alone the money needed to market the products well enough to make any serious money!
So what most people need to do is come up with an option that will allow them to earn residual income without a lot of skills and talent or a lot of money, like what it would cost to buy your own insurance company. You need a simple plan for residual income. Fortunately, there are options for those of us without a lot of money and a lot of special skills and talents that will allow you to earn a residual income. Residual income is very important to your long term financial goals but it eludes most people since they don't even know what it is. But now that you know what it is, its time for you to start working your plan to earn residual income.
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Tags: residual income, commissions, stock market, many different ways, wages, best seller, day job, business day, state of affairs, skiing, solid foundation, place of business, sailing, camper, paycheck to paycheck, life insurance company, living paycheck to paycheck, linear income, sad state of affairs