Many are successful, and go on to develop sustainable long term businesses that yield profit and pleasure for the rest of their lives.
So how do they do it? What’s involved in the process? And exactly what is residual income anyway?
In this post I’ll answer those questions, as well as give you a few suggestions on how to get started.
What Is Residual Income?
The first point to understand is exactly what the term residual income refers to.
Residual income, also known as passive income, is the ability to earn a return on your investment over time. Usually, this is paid out in small but consistent sums over a period of several years or decades. Let’s look at a few examples:
Examples of Residual Income
There are numerous types of residual income out there, and literally millions of opportunities to earn this type of revenue.
Here are a few of the more common types of passive income sources available:
- Investment properties. Real estate is one of the best examples of a “traditional” source of residual income. A landlord buys a building and then rents the space to tenants, who pay consistent monthly fees to use the property.
- Stock dividends. Stocks are probably the most common sources of residual income. While most people think about stocks in terms of the share price growing over time, many companies also pay quarterly or yearly dividends to their shareholders.
- Enterprise sales commissions. Many sales professionals work on a commission based structure. While this provides some risk to anyone starting out, over time they build a portfolio of “low-maintenance” clients that will provide revenue over time.
- Informational products. Have you ever purchased an exercise video or an instructional course? These are just two types of informational products. Under this model, a business owner invests time and money up front to develop a product, and then reaps the benefits of sales later.
- Affiliate marketing websites. I’m an internet marketer, so it’s no surprise I think affiliate marketing sites can be incredible investments. Read more on whether affiliate marketing is right for you.
What Residual Income Is NOT
Unfortunately, there are a lot of misconceptions about passive income opportunities, especially myths about internet income. The worst among these is the thought that you can earn money without putting in any work.
Residual Income Is NOT free money. All revenue opportunities require an investment, whether a monetary investment or an investment of your time (work) to build something.
In the examples above, the real estate and stock examples are ways to invest money into earning residual income, while the enterprise sales and affiliate marketing opportunities are ways to invest your work into creating a residual stream.
How You Can Earn Residual Income
Finally, let’s turn to how you can earn residual income.
In my view, affiliate marketing is one of the best and most accessible ways to generate a passive income stream. It’s a great solution for many people because anyone can do it, regardless of professional experience or background knowledge.
The reason is that the fundamentals of affiliate marketing are simple and can be learned. There are plenty of affiliate training courses out there for anyone interested.
The best and fastest way to get started is through a guided training program, so you can make sure you’re setting your business up for success.