Why Residual Income Is Smart Money - And Ways You Can Earn It
by Marty Foley
Residual income (also called passive, or recurring income) is income that continues to be generated after the initial effort has been expended. Compare this to what most of us focus on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or salary.
Linear income is directly proportional to the number of hours expended (40 hrs. of pay for 40 hrs. of work). One of the great advantages of residual income is that once things are set in motion, you continue making money from your initial efforts, while gaining time to devote to other things... such as generating more streams of residual income!
There are a variety of ways residual income can be earned. Following are some examples.
1) Transfer the rights to a book you wrote, a software program you created, a gadget you invented, or a song you recorded, to a company that agrees to pay you a percentage of each copy of your work sold in the future.
2) Become an actor and draw residual income from each of your movies, TV shows, or commercials, each time they run.
3) Let an oil company drill a well on your property in exchange for a percentage of the revenue.
4) Purchase an office building or other real estate that earns you recurring income through lease or rental payments.
The above ways of earning residual income generally aren't that easy to implement. Following are some that are more attainable for the average person:
5) Maintain a savings and investment program that pays you residual income in the form of interest or dividends.
6) Market your own products and/or services that lend themselves to repeat sales.
I'm referring to products or services that are regularly used or consumed, and that must be purchased over and over again.
A product or service that you create once, but sell over and over again, could also be categorized as a form of residual income (although continual effort may be required in marketing it).
Don't have your own product or service that lends itself to repeat sales? Consider the next two options for earning residual income...
7) Join affiliate/associate programs that offer products or services that lend themselves to repeat sales.
For example, Internet marketers regularly use services such as web hosting, autoresponders, etc. Some affiliate programs that offer such services pay residual commissions to resellers for as long as the original customers they've referred remain customers.
8) Join affiliate/associate programs that pay commissions on two levels.
Certain affiliate programs also generate residual income in another way: by paying affiliates a percentage of the commissions earned by those who sign up under them.
You'll have better success with an affiliate program if you actively market it yourself, rather than relying heavily on second level commissions. Since many affiliate marketers don't actively promote programs they've joined, don't sit back and rely on income from second-level commissions, but view it as icing on the cake.
Some of the most ideal affiliate programs combine the best of both worlds: Products or services that lend themselves to repeat sales, plus residual commissions based on the earnings of those who sign up as resellers under you.
I've done a lot of research on affiliate programs. To avoid a lot of trial and error and to discover a collection of the best e-commerce affiliate programs my research has revealed, visit
http://AffiliateProfitInfo.com/programs/best.htm .
Last Words...
I'm not against earning good, honest, "one-shot" linear income, but given a choice, which would YOU rather do: get paid only once for work you've done through linear income, or get paid repeatedly - perhaps for years or even the rest of your life - for work you've performed only once, through residual income?
| DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware. |
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