Understanding Residual Income

By Author Brian Rooney, August 7, 2014 by admin

Something that has become very clear to me is how little most people understand the term “residual income”. Based on that, I figured it is time to write an article that may help clear up the mystery just 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.

It doesn’t take much for us to realize that residual income can be a much better deal for us than linear income. 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 a lot of network marketers get excited when they begin to see the potential residual income model. I love playing music but I am aware that if I am not actually thumping some bass strings, I’m not earning anything. But my income streams through network marketing 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 TheOnlineAdNetwork.com where you just might find a better way to create your own residual income streams for now and for future generations.