What Exactly is Residual Income?

What is the difference between active and passive income? These are great questions often asked by many people. Let me explain it this way, Residual income is that which continues to be generated after the initial effort which created the income has been completed. There are many different ways in earn residual income, and the best ways are those which you have exclusive rights to.

These may be more difficult and time consuming to develop or acquire up front, but the rewards and income generated are often greater and the income more stable then continually having to generate income constantly. A residual income is one that provides income no matter what, even if you no longer actively promote the income source. The money just keeps coming. For many enterprising individuals, this is an excellent way to make true long term income a reality.

There are many ways to generate residual income, some easier than others. By investing small amounts of time over a long period, the residual income will continue to grow, and eventually grow exponentially. Residual or passive income is basically income from sources other than a traditional 9-5 job. Other passive income can include stocks, bonds, rental real estate, mutual funds, and businesses one does not own.

If one would compare how earning lifestyles are functioning today with the way they were going on until a few years ago, there is a huge change. Residual income is simply the money earned from a job that was done once, but which keeps on paying by itself for a long time. Passive income opportunities have always existed, but since the internet has become such a large part of the world, the opportunities have multiplied drastically. It is much easier now to leverage the internet to create a passive income. The Internet can now be your 24/7 sales force for you, earning upfront sales and residual sales in the long term.

One of the most popular ways to generate residual income is in network marketing. When you participate in a network marketing opportunity, you can generate recurring income from the same customers or sales of a product over and over again as long as they are associated with you.

The key to a successful residual income business is keeping the business as automated as possible so once it has been set up; it does not need as much attention and the residual money can begin to be made. If automated correctly, one can literally wake up having made while one was sleeping. With the example of Network Marketing, one can have customers ordering automatically and new ones joining if the business is automated correctly.

Residual Income

Residual Income; Where to Begin

What exactly is residual income? What is the difference between active and passive income? These are great questions often asked by many people. Let me explain it this way, Residual income is that which continues to be generated after the initial effort which created the income has been completed. There are many different ways in earn residual income, and the best ways are those which you have exclusive rights to. These may be more difficult and time consuming to develop or acquire up front, but the rewards and income generated are often greater and the income more stable then continually having to generate income constantly. A residual income is one that provides income no matter what, even if you no longer actively promote the income source. The money just keeps coming. For many enterprising individuals, this is an excellent way to make true long term income a reality.

There are many ways to generate residual income, some easier than others. By investing small amounts of time over a long period, the residual income will continue to grow, and eventually grow exponentially. Residual or passive income is basically income from sources other than a traditional 9-5 job. Other passive income can include stocks, bonds, rental real estate, mutual funds, and businesses one does not own.

If one would compare how earning lifestyles are functioning today with the way they were going on until a few years ago, there is a huge change. Residual income is simply the money earned from a job that was done once, but which keeps on paying by itself for a long time. Passive income opportunities have always existed, but since the internet has become such a large part of the world, the opportunities have multiplied drastically. It is much easier now to leverage the internet to create a passive income. The Internet can now be your 24/7 sales force for you, earning upfront sales and residual sales in the long term.

One of the most popular ways to generate residual income is in network marketing. When you participate in a network marketing opportunity, you can generate recurring income from the same customers or sales of a product over and over again as long as they are associates with you.

The key to a successful residual income business is keeping the business as automated as possible so once it has been set up; it does not need as much attention and the residual money can begin to be made. If automated correctly, one can literally wake up having made while one was sleeping. With the example of Network Marketing, one can have customers ordering automatically and new ones joining if the business is automated correctly.

Residual Income Opportunities And Formula To Build Your Financial Future

Picture yourself finding the right residual income opportunities that paid you over $5000 per month. How would your life change if that were to happen for you?

Would you be:

Driving the same car
Living in the same house
Taking bigger and better vacations
Pay off your debt

Remember though, residual income is passive income that you earned from work you did in the past. That means you’re no longer needing to trade your time for this money. So while $5,000 might not seem like enough to live the life of your dreams, if you understand the formula and can identify the right opportunities you can easily scale that up to 10k, 20k, or even more than 30k per month.

For many people that kind of money is simply not possible, but to you it is. Why do I know that? Because you’re reading this article and searching out HOW to do this.

Plant your own money tree with the right residual income opportunities

You probably heard when you were growing up that money doesn’t grow on trees? While that’s true, in a figurative sense building a business that pays you residual income is basically the equivalent of planting a money tree in your back yard, watering it, and watching it grow.

As you know, most trees don’t grow overnight, and neither will your residual income money tree. But with a little TLC and by taking massive action every single day, it will start growing.

What is residual income?

Wisegeek.com, a site that prides itself on providing clear answers to common questions has this to say:

“… residual income is any income generated through indirect involvement with something. This is more properly called passive income. Rental income, royalties, website revenues and portfolio dividends are all means of generating this kind of income.”

Authors, song writers, patent and name/likeness licensors, landlords, investors, some attorneys, internet marketers and many type of business owners all earn residual income.

People from all walks of life earn residual income. It doesn’t matter what kind of education you have, how tall or good looking your are, or what your faith is. There are many different models and ways to earn a residual or passive income.

The key to building a sustainable business is to identify the right opportunities that will allow you to do the work once, and earn forever on it. I’m going to focus though on using the internet as my favorite means of doing so.

So how do you identify the best residual income opportunities?

Since most of us are not going to be the next famous author, or song writer. And most of us don’t have a bunch of properties that we own paying us a monthly income off the rent. I’m going to have to look at residual income opportunities that ANYONE can do, online, from the comfort of their own home.

The internet has created more millionaires than the rest of the business opportunities in the history of the world combined prior to it’s inception.

Why is this though?

The answer is simple. Because when you do the work once on the internet it’s there to stay. Here are the two very best residual income opportunities for people looking to work out of their home.

1. Affiliate Marketing – If you’re not sure exactly what affiliate marketing is, let me share the thoughts of Darren Rowse?

“Perhaps the simplest way to explain affiliate marketing is that it is a way of making money online whereby you as a publisher are rewarded for helping a business by promoting their product, service or site… in most cases this involves you as a publisher earning a commission when someone follows a link on your blog to another site where they then buy something.”

What that means is you get paid a commission when you are able to help bring a buyer and seller together on a product you don’t own.

The way you’ll usually do this is by creating a blog, or even a video channel on YouTube, and start promoting various products and services. You can promote literally anything online and make a commission for it. As long as you have a passion for something, you can promote it to others who share the same passions.

Did you know many of the popular shopping sites are actually run by affiliate marketers selling other companies products? Pretty much any time you do a search for a product review online, you’re going to be reading the review of an affiliate trying to make a commission by promoting that product. Usually if you’re searching for something general like “treadmill reviews” the one with the highest rating is usually the one that pays the best commission.

Affiliate marketing is one of the best ways to get starting in building a business that pays a residual income. Because the cost to get involved with this type of opportunity is usually very little. There is also no overhead or physical products that you need to ship yourself. You simply need a computer, a domain name, hosting and a few promotional tools. That’s it. You are in business.

The only problem with residual income is sometimes products lose their popularity. So you might end up promoting something that you spend time working on, and the product is either discontinued or a brand new model comes out. The commissions on physical products can also be pretty small. For example the affiliate program for Amazon.com pays from 4-8% commissions.

2. Network Marketing -Network marketing or Multi Level Marketing, is basically like affiliate marketing, but with multiple levels. This means you not only are going to earn a commission when you make a sale, but also when your team is able to make sales. Typically the commissions by your down-line are going to be small, but they do add up as you’re able to make your own sales as well as build a team of people who are able to duplicate your efforts.

Picture yourself earning a residual income on all sales produced by a team of 10,000. That’s what you would be able to call a real passive income!

This is a great income source, but it’s not something that will be built overnight. Typically it will take a few years to build up a substantial income in the multiple 6 figure range.

3. Internet Marketing – This really isn’t any different than the two models above. It’s actually the same, but for the purpose of this article I’m looking at it as selling your very own products online. With the possibility of even setting up an affiliate program of your own to get others to sell your products.

As I said above, the internet has made more millionaire than any other business model combined. You can literally sell your very own products in just about any type of niche you have a passion for. The internet creates a huge demand for information. What kind of information do you know that others will pay for?

What about taking some of those affiliate products you’re selling and create your own version of them and make it just a little better? That can be the difference between making 10% vs. 100% commissions.

Lets put this into action…

I want you to imagine yourself having a business that shows up in the first spot on the search engines for the search term “blue widgets” and this search ended up getting 20,000 searches per month across the world. By doing some simple math you can estimate what kind of monthly residual income you can make off selling “blue widgets” to the masses.

Let me show you this math:

20,000 searches x 36% (studies show this figure) people click on your website = 7,200 monthly visitors

4% of those visitors end up buying your “blue widgets” product = 288 sales

Each sale is worth $15 per month = $4,320 month 1 income

Each subsequent month you will continue having people purchase these blue widgets from your site, with very little work needed to maintain your sites rankings at the top of the search engines. And the previous months clients will continue paying for this product, creating a strong residual income.

This is a very broad scope of how to build a residual income online, but the formula works for anything.

Picture this…

Perhaps neither of the three models above are the “best” residual income opportunity for you. Picture a income opportunity that pays you 100% commissions, without you ever having to create a product. With this model you’re combining the positive aspects of all three of the models above, and eliminating all of the drawbacks.

The way do you want to learn how you can combine these three methods to create the one of the best residual income opportunities [http://jasononeil.info] ever?

You won’t have to worry about a product becoming obsolete.

You won’t have to make tiny commissions on your downline sales

You won’t have to create your own product.

You will make 100% commissions.

You will be selling products people will always need in order to run a successful online business.

You will get 100% commissions on 20% of your downlines sales.

Residual Income Through Business

What is residual income? Residual income is a type of income regularly received after a one time investment of money, time, and effort. When an author writes a book, he will spend time working on it. When the book has been written, he will publish it online or offline. During this time, he needs to spend some amount of money in order to publish and advertise it. He might create a website for that purpose, or look for another one where he can post and advertise such a product. At first, it’s all money out. There is no actual income at this point in time. But over a period of time, people start browsing and clicking the websites in which he advertised his book. When visitors get interested in his book and buy it, he will start making money especially when he becomes popular in his niche. Because of this, he receives a regular income even if he does not any more spend his time making another book. This type of income is called residual income.

Common to everybody, we have to work hard to earn some money. We all know that what we earned is commensurate with our work. It’s an income, isn’t it? This type of income is called linear income. Many are already satisfied with this income model because it’s quick and guaranteed. Aside from that, we can control and anticipate the amount of income we can earn for a period of time and that gives us a basis for budgeting. However, it is limited because it is also based on our energy and time. Every day, we are awake for 16 hours. Assuming, we earn $25 per hour. We work 16 hours a day so it gives us a daily income of $400. After a month, we have $12,000. Of course we need to eat and take a shower every day. We change clothes and go to work while being stuck in the middle of the traffic jam. On top of that, this work includes Saturdays and Sundays. Even if we enjoy this busy lifestyle, where can you get any more time to earn more?

Residual income is a better alternative for people who want more. With less effort, you could earn $5k, $10k, or $20k a month depending on how you set it up. Therefore, residual income is a business. But unlike most traditional businesses, residual income business can be set up without having to set aside your linear income. Since residual income business is still a business, you may need to spend a little effort from time to time. But that does not require you to give up your regular work if you still wish to work continuously. In fact, you don’t have to.

What are the types of residual income business? Residual income business is more common with artists such as singers, music composers and movie actors and actresses. They are paid for the work they have accomplished. After a certain period of time when their films or recordings are distributed in the market, they will receive a royalty fee. Every time a single copy of their work is sold, they earn a residual income. The entertainment industry is just one type of residual income business.

If entertainment is a residual income business, creativity is another type. This type of residual income business entails knowledge and intelligence. Inventors, scientist, and designers such as engineers also receive an income based on the agreed amount equivalent to their output. When another institution or any business entity uses the patent of their work, they may earn a huge amount of money. The only challenge here is that nowadays, most companies have their own R&D department that develops their own patent.

Most of us must have forgotten that a franchising business is also an example of a residual income business. This kind of business requires so much time and money. It involves risk during the start-up stage. However, when the business grows and becomes popular, people who want to engage in business would prefer to have the same. Businessmen willing to use the franchise name will benefit from the same market where it is the leader. On the other hand, the owner of the franchise earns a residual income from the franchise fee every after the expiration of a franchise period. Common businesses that may sell a franchise are fast food chains and retail shops.

Online business is the hottest residual income business nowadays. We can earn a residual income from various income models. As a beginner, we spend more time browsing and researching some related information on how to earn money online. By doing so, we become bombarded and loaded with a lot of options to begin with. The most popular one we may notice is the affiliate marketing business. And a person engaged in this business is known as affiliate. An affiliate is someone who looks for a product online not for the purpose of buying it. He sells it online. He gets into a number of websites offering some affiliate programs. This includes advertising the products from the said websites to many different links and web directories. An affiliate earns a commission upon from the sale of the product bought by online visitors. It requires a lot of effort and trials in the beginning stage. When it’s all set, residual income follows.

How does it work? We may find our niche or a particular specialization based on our talent and skill. Afterward, we can create a niche website or blog and write some articles related to our expertise. In order to draw the visitor’s traffic to our sites, we optimize the search engines using keywords in our article content. This formula is known as SEO or search engine optimizer. Through this, we might gather an optimum number of visitors who may like we say and who, eventually, may want to learn more about we have and what they should buy to go deeper. From there, we can search for some websites selling products related to our expertise. We should apply for a membership and select the niche products which we can promote on our site. Through this, we can lead the visitors to those sites using a link. Once a visitor gets interested to buy the product, he will just click the link and get directed to the sites where he can make a purchase. When a sale is done, an affiliate will earn a commission. This process can happen repeatedly even if an affiliate is offline. Your site and the links in it will do the rest for you. Sometimes, an affiliate must exert his extra effort to sustain and strengthen the traffic. But if an affiliate has started it right, there will only be little effort needed.

On the other hand, you can create your own online products and let the affiliates promote and sell them. Instead of just an article, you may be an author of a book. Make sure that the books, you should make, is related to your niche. At first, you should build your credibility as an expert in your niche. To do so, you should also do what affiliates do.