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Definition of Residual or Passive Income

By Edited Nov 13, 2013 1 0

Are you looking for the definition of residual income and looking for ways to create multiple sources of passive income? Residual income is money that you make passively or money that is made after you have put work in. The biggest advantage to making passive income vs. non passive income is that instead of being paid for the time of hours you work, the upside to making money is literally unlimited and it keeps coming in without your presence or effort! You may need to put in some effort to earn a residual income at first, but after that you should receive money every month without effort. All it takes is getting educated and a little motivation to begin.

Residual Vs. Non-Residual Income – Which is Better?

You must understand the differences between earning a residual or passive income, versus the normal income you make from your job.

- The advantages to earning money passively is that you can literally make money while you sleep and there is no ceiling to how much you can make, like I mentioned above. It's up to you. It also requires little to no money to begin.

-The disadvantages is that you obviously do not get health insurance or benefits for your work and also it may take some time to build up enough passive income to do it full-time.

- However, I still think that creating multiple passive income streams is something that every person should try to do. With today’s economy, you just don’t hear the term “job security” anymore and I think it's nice to have a safety net of income streams on the side.

- A good idea is to keep your 9-5 job and create residual income streams in the meantime. Eventually you may just earn enough money from these streams to consider quitting your job.

Residual Income Model

There are many different ways you can approach creating a residual income model for yourself. It's important to know the different types of ways to do this!

Here are some ideas to get started:

*Affiliate Marketing - An example is a business giving you a percentage of profits for every customer brought to their site or for every product purchased. So for helping a business sell a product or service, you make some money for it. I will explain further below.

*Blogging for Passive Income - This is something you can do on a revenue sharing site such as  Seekyt, which pays you 70 percent of ad revenue. You can earn money with Google Adsense and affialiate programs like Amazon, for instance.

You blog about things you love or products you use and you get money every time someone clicks on an add or buys a product.

This is a very popular way to earn residual income, as many bloggers make thousands of dollars a month doing so. It will take you some time to earn that much but it's free to start with no risk involved!

*Write Then Sell an Ebook for Residual Income– Are you an expert in any one topic? Why not write an Ebook on it? You can really help people and make some good money in the process. Many people who write on revenue sharing sites like Seekyt also will write an Ebook to diversify their online income.

I've heard of people making in the thousands from Ebook sales, but I think even earning just $50-$200 a month is pretty good. This book below should really help you get started.

*Real Estate Passive Income –  If you have some money saved up, maybe you will want to consider investing in real estate such as a multifamily home.

You can make a nice passive income in real estate each month with little effort, especially if you have a property manager running your property for you. The money you make from rent minus all expenses is the cash flow you will earn. If you find the right property, I say go for it! Interest rates have never been this low and it seems like it's a good time to buy, too. 

Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits
Amazon Price: $30.00 $15.65 Buy Now
(price as of Sep 24, 2013)

*Peer to Peer Lending for Passive Income - This is a lesser known form of earning residual income but definitely something worth considering. Peer to peer lending is basically a way to replace banks for lending.

You get normal people like you and me lending money to people who need it. The lender gets a good rate of return (anywhere from 6-12 percent) and the borrower gets money they need.

The borrower might be a person looking to consolidate their credit card debt or someone who needs money for a house repair, business venture, or just about anything.

This looks like an attractive investment opportunity for someone looking to earn income each month without too much risk.
 
*Stock Market Dividends from Stocks, ETFs, etc. - Like real estate, this also requires some money. but if you have it you should consider investing in a high yielding ETF or mixture of stocks that pay a nice dividend.
 
*Buy a Business That Cash Flows - You could consider buying a laundromat, for instance, which runs on coin operated machines. I've also heard of people investing in vending machines for residual income. This seems like a good idea, too.
 
There are many other great passive income ideas out there and these are just a few! Here's another book I like to help you get motivated and on the right track.
 
Multiple Streams of Income: How to Generate a Lifetime of Unlimited Wealth!
Amazon Price: $18.95 $9.95 Buy Now
(price as of Sep 24, 2013)

Whether you are a beginner looking to learn how to create quick streams of residual income, or someone who has already done so, I hope this article helped you better understand the definition of residual and passive income!

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