Residual Income

Residual Income – What Is It and Why Do You Want It?

by Craig Dewe

You have probably heard the expression that “the rich get richer while the poor get poorer.”

The reason it happens is because the rich focus on a completely different way of earning money. There are thousands of stories about poor people who accumulated great riches and this choice is available to all of us.

Warren Buffett, Bill Gates, Richard Branson, and Oprah were not born into riches. Yet over their lifetimes they’ve amassed huge personal fortunes. This is because they understand and use the power of leverage through residual income like we’ll talk about today.

  • What Is Active Income?

Active income comes as a direct result of our efforts. This is when we work for one hour and get paid a certain amount for that hours work. This can be seen in wages, salaries, and self-employed service providers like lawyers, accountants or doctors.

There are many people who get paid vast amounts of money to become the CEO of a company, play professional sports, or star in a movie. Earning a high active income is often a lot of hard work and requires a dedication beyond most of us. It’s also limited because no matter how much money you get paid you still need to show up to work to earn your money.

  • What Is Residual Income (Passive Income)?

Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also income that comes from real estate or business investments where you don’t actually have to be present to earn it. For example, Bill Gates is still making a residual income from Microsoft even though he isn’t working there any more.

Residual income comes from building an asset that continues to pay you after the work has been done. A book, movie or song is an asset to the people earning royalties from it. A house is an asset to the landlord being paid rent and a business is an asset to the business owner who does not need to be involved in the day-to-day activities any more.

  • The Residual (Passive) Income Myth

Many people talk about passive income and create the impression that you never have to do anything to keep that income going. The truth is that you will normally have to keep your eye on things if you want it to run smoothly. For example Richard Branson doesn’t run any of the 400+ companies he started but he goes over the numbers each day to make sure they’re performing well and calls the CEO if there are any problems.

There is also an idea that we should work to build a passive income asset and then sit on the beach relaxing for the rest of our lives. The truth is that most people would get extremely bored with this scenario and will be eager to find something to do. That’s why the world’s billionaires continue to work… they love what they do and it stopped being about the money a long time ago. 

  • How To Build Residual Income

The key idea here is Leverage. You must be able to Leverage other people’s time or other people’s money in order to create a residual income. Richard Branson can run 400+ companies because he isn’t actually running any of them at all. His CEOs are.

To create residual income, you need to create something that people will continue to buy on a regular basis long after you’ve created it. A house is a prime example of this as people will continue to pay rent for the right to live in the house. A business needs to have products that are sold over and over again rather than trading the business owner’s time for money.

The products might be an item that has been created and can be duplicated or it might be the time of other people. For example, a dentist can only make so much income trading their time for money but when they bring on other dentists they will start to leverage their results to build residual income.

I’m working full-time on my job and part time on my fortune. But it won’t be long before I’m working full-time on my fortune. Can you imagine what my life will look like?” Jim Rohn 

You are now probably wondering, where do I start from to create my own product in this age and time or where do I get the money from to run a real estate business or put in the bank to generate interest etc. The Truth is you can start your Residual Income Journey with very Low Investment and Leverage the Knowledge and Time of Other people you work with to Build a Truly Remarkable Business. To learn more and how Click Here to grab my Residual Income Free eBook 

Did This Help You? If so, I would greatly appreciate it if you entered a comment below and shared on Facebook

Judith Moor

 

‘Helping You Start Your Entrepreneurial Journey & Taking It To The Next Level’

Judith Moor’s Life Style Entrepreneur Blog

Email: judith@judithmoor.com

Facebook: Judith Moor

PS: Just curious, would you be open to a side project that wouldn’t interfere with what you’re currently doing? If so, Take A Look At This  and let me know what you like best about it by emailing me at judith@judithmoor.com

PPS: If You Are Already In A Home Business And Are Struggling With It or You Want To Multiply Your Earnings Potential, This Free Report Which Teaches You How To Quickly Build A Passive Income Through Blogging Will Help You. Click Here To Grab It .

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Craig Dewe is the founder of Lifestyle Outlaws 

and has blazed his own path for the past 13 years.

He believes in designing your own ideal life and

obtaining the freedom you deserve.

You can connect with Craig here 

 

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