Residual Based Income

The easiest way that residual income can be described is that you do the work once and then you get paid for that work over and over again. It is like your boss paying you for your work last Tuesday, next week and the week after that and the month after that and next year as well. This would be fantastic.

Owning shares through the stock market is one way of earning a residual income. This is because they get paid for at the beginning and for the period they are owned, a person can receive dividends, as well as seeing the value of the stocks gain in value. While this is the theory the reality is the value of stocks can fluctuate dramatically and even become worthless. Also dividends can vary dramatically. To earn a residual income income, you would need an extensive understanding of the share market or a very good broker (although I think both the understanding and the broker would be the best situation of all). While there are many that do not make money through the stock market, there are many who do.

Owning property is another residual based income source. For instance, if you own a house and rent it out then whoever rents it has to pay you every month that they are occupying your house. This is very simple, but not so simple having enough funds to make the initial investment. Even if you borrow the money, you still need to have a sizable deposit.

This next category of residual income income sources is not possible for everyone. Writing a book and receiving royalty payments for potentially years later is an excellent example. Also composing a piece of music can earn you royalties for the next 50 years and it is not just every time your composition is recorded or performed, it is also every time it is heard on the radio or used on television. I would not mind being the composer of the song used in the once popular television show "Friends".

Similar to authors and composers, inventors can put patents on their inventions and by doing this can control who manufactures their invention and earn a sum of money for every item that is sold. The best recent examples is to do with computers and especially the internet. Inventors have become millionaires because of the residual income income they have received.

There are also business models that also produce residual income income. Two that I am aware of are multi-level marketing and affiliate marketing. The way multi-level marketing works is that you sell or self consume the products and you sponsor other people to do the same thing. You make a percentage of what you sell or self consume and you make a percentage of what the people who you sponsor sell and so do they. Anyone who makes any money and can track the line of sponsorship back to you, you will also earn a percentage. It works a lot like the concept of compound interest.

The other business model that produces residual income income is affiliate marketing. It is all done through the internet and how it works is that you produce a campaign to promote a product. If a sale results through your campaign, then you earn a commission. Being the internet, the potential is 24 hours a day, 7 days a week, with potential contracts coming from any part of the world.

While I have covered different sources of residual income income, my list is not exhaustive.

I hope this information is useful for you.

Source by Jen Penn