WHAT IS RESIDUAL INCOME – WHY IS IT IMPORTANT
A residue income, called passive income or recurring income is money that you continue to get after the initiate effort has been completed. Examples of residual income are royalties from books, movies, or songs and also income that comes from real estate or business investments. You don’t need to be present and work every day to earn it. Bill Gates is still making money from Microsoft even though he isn’t working there anymore. This is a perfect example of residual income.
The myth of job security
The world as you know has changed and job is no longer as secure as it used to be. Eric Worre, one of my favorite author and best seller says: ‘The world has you know it has changed. For the people who don’t recognize that fact, it will be the worst of times. For the people who do, it will be the best of times’.
Nowadays, you can’t fully rely on your employment. Due to rampant economic crisis, most employees cannot wholly rely on their jobs as a source of income. Great companies are going down and the output is lowering due to stiff competition and economic crisis. The demand of most goods and services is also declining rapidly.
It is very important to find an alternative source of income. Of course, you do not put all your eggs in one basket even if you have full control of your bag. To be honest, there is no sector immune to economic crisis. This is actually why most people look for residual income streams that work for them all the time, even when they’re sleeping.
The problem with linear income
Linear income is the opposite of residual income. For linear income earners to make money, they must be physically present in their place of work. To get the paycheck or salary they must be present and must have worked for specific number of hours. Their paid is for specific time expended, in most of the cases, 40 hrs of pay for 40 hrs of work during a week.
To be honest, linear income earners have little control of their success as they fully rely on paychecks and can be fired anytime. Unlike residue income that can benefit your family in case of death, sickness or old age, linear income earners cannot benefit your family as the job cannot be passed to your children or grandchildren. If you’re a successful doctor, lawyer or banker, your job cannot benefit your family if you have not invested.
How to Build a Residual Income
Residual income earners are the most successful people in the business world. If you’re employed and you’d like to fall in this category, you must you must consider that. But how does a regular person create residual income? In fact, here are 3 of the smartest ways to build residual income.
Purchase a rental property
Rental property is a source of passive income. Purchasing a rental property is one of the best investment ideas you can make. Real estate business does not depreciate. If you purchase a property today, the value of that property will never go down. Purchasing a rental property or developing a property is the best idea. Rental houses will give you monthly income and the value of that property will rise. Most rich people have heavily invested in the real estate business. It is a long-standing and proven investment. What holds most people back from choosing this option is the down payment needed to make the purchase.
Invest in the stock market
Another great option for residual income investment in the stock market. You can buy a group of stocks in companies that are publicly available. This correspond to Robert Kiyosaki’s ‘I’ Casflow Quadrant in his book Rich Dad Poor Dad. Your money works for your, but you need a lot of money to do that.
Build a Network Marketing Business
Network Marketing is my favorite and actually the best and proven ways to make residual income. If you’re employed and you’d like to earn extra income, or looking for a source of money for your retirement, this is a good option.
Today, there are important products and services in the world that need to be promoted to people who need them. To do that, most companies prefer to use Network Marketing because it fits the new economy.
There are currently more than 100 million people worldwide involved in the Direct Selling industry and the revenue generated is over $182.6 Billion dollars. This is much more than NFL with $9.5 Billion, the Music Industry, $15 Billion, the Video Gaming Industry, $76 Billion and the Movie Industry is $88 Billion.
For many years the Network Marketing industry has gotten a bad reputation. This has has dramatically changes and the industry has shifted into a true profession.
The challenge in Network Marketing still remain choosing the wright company. Here are 4 key factors:
- Management Team with Great Vision and Integrity
- The Company’s Product Strategy
- The Compensation Plan
- Training System for Representatives
I am involve in ARIIX, a company that is intentional about their efforts to change the industry, change lives and change the world. The company has a dedication to developing efficacious products, as well as a commitment to integrity, unity and disrupting the industry with innovative practices.
