If you search the internet for “residual income”, you may find a definition or two, but mostly, what you find are websites trying to sell you on the passive-income-flavor-of-the-day. It’s frustrating, I know. I don’t know about you, but before I jump into any opportunity or even before I take a trip, I like to do my research. With that being said, there are plenty of excellent opportunities out there. But before you start out spending money, let’s discuss what I need money now¬† is and, most significantly, what it isn’t.

Webster’s dictionary defines residual income as “of, relating to, or being business activity wherein the investor does not have immediate control over income”. I don’t feel that tells the complete story. Residual income is money that you get over and over again without needing to do much work (notice I didn’t say “any work”). It really is distinct from earned income in that you will be not receiving money for the time (like you would probably a job). But depending on the passive income stream that you choose, you may actually have immediate control of your revenue. But I’ll get to that later.

Why could you want passive income? Well, like Robert Kiyosaki explains within his book Rich Dad Poor Dad, that is the main distinction between the rich and the middle class. The rich invest their money in various passive income streams. When their residual income exceeds their expenses, then they are financially free. “Financially free” basically means that there is no need to have a day job to pay for your expenses. And you also are “free” to then do whatever you desire!

What Passive Income Isn’t. Before I enter into telling you what residual income is, let me first tell you want to buy isn’t. Residual income will not be the same thing as “residual income”. Recurring income is money that you get frequently after having done work once. The very best example would be TV sitcoms. Some actors get “residuals”. Actors earn money from filming the show. Afterwards, some actors get paid every time the show repeats. Sales people that sell services, subscriptions, or renewable products (like insurance) sell that item once and, supplying the customer renews, will get a commission from each renewal. Royalties from your sale of books and music can also be residual.

Many claim that multi-level-marketing or network marketing sales present you with passive income. You know what? That’s residual too.

If you have a small company or are self-employed, even in case you are making lots of money, this is NOT residual income. In the event you obtain a salary from your business, which is police and fire federal credit union. There is a approach to turn this into passive income, however – so stay tuned.

You know, I have to say that starting your personal website cannot be residual income. If you are selling an item (including an eBook, seminar or other information) or a service, you still have to promote your internet site. You will have to accomplish this no matter whether you might be selling your OWN products or hold the rights to sell other’s products. Marketing your site is work, simple as that. But it’s not a job. And once your marketing efforts begin taking off, you can make lots of money with little additional effort. But that is residual within my book, not passive.

What Residual Income IS – Passive income is a lot of things. The first thing that concerns mind, as well as, In my opinion, the most common example is property. Should you own investment property and therefore are obtaining a positive income from the house, commercial property, or apartment, which is residual income. If you rent rooms in your own home, that’s passive income too. You simply have to set this up once, and so the income is available in month after month. Interest income from savings accounts, CDs, and cash-market accounts are passive – the bank pays you for keeping your hard earned money in those accounts. In case you have an internet site with banner ads or Google AdSense ads, that can be called passive as well.

If you spend money on any company, but don’t manage it, your profits are considered passive income, exactly what Webster was thinking about as he wrote the definition.

Have you thought about business? Well, that depends about how you set it up. Rich people create businesses and set up a process that this business follows. This way, in the event the owner continues on vacation for a month to Fiji, the employees stick to the system and also the owner still receives the profits. Any business will obviously start off with many different work, but if you take the time to set up a business to ensure that it gets reproducible results (exactly like a franchise), those profits become passive. And, based on the IRS, any salary you receive from your enterprise is considered “earned” but profits are thought “passive”. It is essential when starting a business to check with the accountant plus an attorney to set up your business that financially benefits the finest.

What else can be looked at residual income? What about self-storage facilities, parking garages/lots and dry cleaners! All of them require some time to start up, but once these are set up, you collect money over and over again.

Residual vs Passive Income – Residual and passive income are like siblings. They are both very similar and a lot people really consider them synonyms. Exactly what does it matter, anyway? They may be both excellent techniques for getting money up to you every month after month without trading your time and energy or perhaps your freedom. How can it improve than that?

Reality Check – Watch out for anyone that lets you know that there is not any work associated with increase your credit score. Residual income will not mean no work! If you are planning to spend in a business, a stock, or even a real estate property, you will need to seek information (this is known as “homework”). Scientific studies are work! You will also be asked to manage your investments, to check high on their xwmpuf making changes as necessary. That’s work too!

The good news is that research and management is only a part time endeavor. And usually, that work can be completed from almost anywhere, including on the beach in Fiji.

Let us not forget the FUN factor. I’m sure there are several individuals reading this who like, even love their jobs (if you still need one). A number of you may have your personal business – and congrats for you! But many of us are in jobs just because we need to feed our families and pay for the bills. Looking into passive income streams and investing your time and expense can provide you with many, many returns. Researching for and implementing your passive income plans so you can live your dreams is FUN. Getting money every month, week, or even every day is FUN. And attempting out new strategies and managing your hard earned money – when you have some to manage – is FUN.

Small Business Ideas – New Light On A Important Point..

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