“Residual Income” is a term often thrown around by Entrepreneurs and financial type people along with phrases like “building wealth” and “time freedom”. But what exactly is Residual Income? And how can everyday people get a hold of it?

To start with I’m going to define the type of income we are all most familiar with – Linear Income. Linear income is where work is done once and money is paid relative to that one effort. For example:

-Traditional job – payment is for the number of hours worked, or

-Selling products or services – Money in exchange for that one product

The definition of Residual Income (also called “passive income”) is money that is received on a regular basis with little effort invested to maintain it. Another way to think of it is you do work once and you get paid for that work again and again and again.

Types of Residual income include:

-Dividend and Interest – eg: back account interest, yearly dividends from shares & investment portfolios

-Rental Income – eg: where you rent out a property, or car, or other asset, you receive regular payments for the use of that asset.

-Royalties and Rights – eg: Actors and musicians receive royalty payments every time their product is played or aired. Authors also receive royalties every time their book is sold.

-Advertising earnings – eg: Adsense ads on websites receive payments every time they are clicked

-Sales/Brokerage – eg: a Mortgage broker gets paid a commission by the bank when a client signs up. They also receive ongoing commissions for as long as the customer stays with them.

-Affiliate commissions & Network Marketing – eg: A representative may be paid commissions for the customers and activity generated by the representatives that they signed into the business opportunity.

The reason these types of income are associated with wealthy people and financial freedom is because when you don’t have to devote your time to continuously “earning” your income, you can focus on generating your next slice of income. It is so attractive to people because you can literally earn money while you sleep.

Four ideas for generating your own residual income

There are different creative ways you can build your own residual income, simply find the right fit for you.

-Write and publish an ebook – whether its fantasy or fiction an ebook is great way to build an income

-Maintain a Blog/website – have ads on your site or blog either through google or become an affiliate of a product and promote it on you site

-Create a Smartphone app – you do have to have some IT skills for this one, but it can be a good way to bring in extra cash.

-Network Marketing (my personal favourite) – find a product/company you like. Get involved with the training and support of the teams and build up a business and team to generate you an almost limitless income.

What is the drawback of residual income?

What most people don’t often realise is that residual income takes time to build up. In most cases it takes dedicated and consistent action by the person to build up the residual income to a level of true wealth. Residual income is the key to true wealth – but do you have the passion and discipline to get it?

Kira-marie Laverty is an entrepreneur specialising in helping people create wealth through residual income. If you would like more information on how to build your own wealth, click Here

Kira-marie Laverty is an entrepreneur specialising in helping people create wealth through residual income. To find out more about how she can help you, click here: http://klaverty.toolsrock.com/10-milindex.html?id=2111

Author Bio: Kira-marie Laverty is an entrepreneur specialising in helping people create wealth through residual income. If you would like more information on how to build your own wealth, click Here

Category: Business
Keywords: residual income, creating wealth