Something that has become very clear to me is how many people struggle with understanding residual income. My goal is to help you clear up the mystery a bit.
There are essentially 2 types of income: linear income and residual income. Most people earn their living through linear income where they trade their time for money.
If you have a job where you are paid a salary, a weekly check, a monthly check, etc… based on the hours you put in at your job, you are experiencing linear income. If you are working in some sort of trades field such as construction, music performance, or other jobs that pay you a set amount of income based on an agreed up on result or accomplishment, this is another form of linear income.
Residual income is the term used to describe a situation where money continues to come in after the job is performed. One form of residual income is what we call “royalty income” such as when an author writes a book. The book got written one time and every time someone buys a copy of that book, the author earns a royalty.
Another example would be when someone writes a hit song. The writer gets paid every time someone buys a CD with that song on it or downloads the song. The writer gets paid if the song gets picked up for a commercial, a movie soundtrack, etc… Like the book author, the song got written once and the writer can be paid over and over again.
Another example might be found in some sales environments such as financial services or insurance.
The simplest way to think about it for me is that if your pay is directly tied to what you are doing at the moment, your income is linear. But if your pay is tied to something you did days, weeks, months, or even years ago, you are experiencing “residual income”.
This is why I place so much value on understanding residual income.
This is why a lot of network marketers get excited when they begin to see the potential residual income model. I love playing but I am aware that if I am not actually thumping some bass strings, I’m not earning anything. But my income streams through are residual income which means that, once I’ve put in the work and achieved a certain level of success, I can reasonably expect that income to continue coming in, no matter where I am or what I am doing.
If you are like most people, working a traditional job, this means that the only time you are earning is when you are on the job site. Even if you love your job, the only time money is coming in is when you are on the job, actually doing the work. When you clock out and go home, your income stops. If you have to miss work due to illness, family matters, or just want to take some time to yourself, the income stops.
With residual income, you still have to put in the work. But the big difference is that your income doesn’t automatically dry up when you go to sleep at night, take a vacation with your family, or just enjoy a day for yourself.
If you are looking for a way to create residual income for yourself, or boost your current residual income streams, we invite you to take a look at the listings here at www.TheOnlineAdNetwork.com where you just might find a better way to create your own residual income streams for now and for future generations.
About The Author: Brian Rooney escaped the rat race in the year 2000 by starting his own . Since that time, Mr. Rooney has provided tools and training for thousands of network marketing professionals via his internet marketing services. If you are looking for a home based business for yourself, be sure to view the listings at www.TheOnlineAdNetwork.com.
Understanding residual income could be a life changer for us all.
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I am further enlightened. Thank you Brian.
[…] the trip, I just kept thinking of how blessed I am to be able to work from home. My income is residual income which means that I continue to get paid for work I did long ago. While I was on the ship, money […]
It seems like today that so many people are looking to work at home, and one way to accomplish that is to work on the Internet.
Figure out a niche before making money online. Are you a good at writing? Market yourself personally as a writer of online content. Are you able to do good graphic designer? Many people will hire you to work on their websites and/or documents. Introspection will help you.
Writers can make some money on sites like InfoBarrel or Squidoo. You can write about your favorite subjects and share their ad revenue.They also allow you to link with Amazon’s affiliate marketing program to boost your earnings even greater earning potential.
Make a daily for yourself. Making money online is pegged to your perseverance in doing what you are doing on a regular basis. This is no quick way to making loads of cash. You have to be diligent in your nose to the grindstone on a daily basis. Carve out a very specific time frame daily. Even an hour a day can make a huge difference over time.
You should be ready to offer proof of your identity to make money online. You will have to provide valid identification in some places. Get a copy of your ID to make everything go smoothly.
Use your spare time well. There are tasks you can do which will make you money while relaxing. There are small tasks on the site for Amazon’s Mechanical Turk (mturk.com). You can do tasks while cooking dinner or watching television. It’s possible to make a little extra money to spend on something fun, though you won’t make a fortune this way.
You just need someone to tell you what to do to make money on the Internet. Fortunately, this advice can serve as a great foundation for your online money making experience. You have to keep learning to make money from home. Also make sure to use it too, though keep in mind all that you glean from these tips.
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[…] Understanding Residual Income […]
Brian, outstanding blog post. Very enlightening and easy to understand. Recommended reading for anyone who still does not understand the differences between residual and linear income. It’s clear, from the post, that the residual income model is superior to the linear version. You’ve been at it since 2000. You’ve “seen it all,” succeeded and, I’m sure, you’d agree.
I appreciate the kind words. There is always more to learn and I firmly believe that once someone truly sees the power and freedom that can be achieved through residual income, linear income quickly fades in to “that thing I used to do so that I could cover the bills while I was learning how to do what I really WANT to do with my life.”.
As always a good blog post. You are right once again. Income that is not residual is like a hamster on a wheel. It stops running and the wheel stops. Residual income is setting things up so that the wheel keeps turning even though we are not on it.
This is why I always emphasize to others that attaching yourself to a wage (and relying on it) is not wise. Whether you earn $9 an hour or $31 an hour, it’s linear. Your body stops and that income does to. Residual income is the smarter way to go and I urge everyone to get sold on this concept. Time is far to valuable to spend a lifetime pursuing linear income. Besides, while the value of a dollar will always fluctuate the human body is in a constant state of deterioration. You won’t be able to chase linear money forever.
Very good point. I was talking with someone about linear income just a day or two back and they still don’t get it. The day will come when their body can no longer do the work or they get replaced by a younger stronger model. Building residual income just makes sense for us all.