Using your talents to sell stuff such as products, crafts, etc.having a side hustle business such as mowing lawns or babysitting.freelancing your skills, such as writing or web design.Some examples of residual income via this definition could include: This is primarily the way we define residual income on this site. Some people define residual income in a third way: as income that differs from your main 9-to-5 job. In other words, this definition describes residual income as any extra money you have left over after you pay your bills or pay off a debt.Īs you can tell this definition, although accurate, is off topic and out of context from what we are talking about today. This calculation is usually made on a monthly basis, after the monthly bills and debts are paid.Īlso, when a mortgage has been paid off in its entirety, the income that individual had been putting toward the mortgage becomes residual income. The amount of income that an individual has after all personal debts, including the mortgage, have been paid. For example, if you look up residual income in Google, one of the first definitions you will find is from Investopedia: It is important to note that there are other existing definitions for residual income. Needless to say, most of the time you would be fine using the two terms interchangeably since their definitions are so closely related. One could argue that “time” was certainly invested in each one of these activities, so that’s where the difference between the two can become somewhat of a grey area. Creating blog posts or articles to sell something over the Internet that doesn’t belong to you such as with an affiliate program.Money you get from recruiting successful team members in a multi-level marketing company like Mary Kay or Pampered Chef.Royalties you receive from an e-book you created.While passive income takes some initial monetary investment, residual income differs by receiving income after you do some initial work. You had to invest in a stake of the company to make a partnership and receive a cut of the earnings.You had to invest money into a CD to receive interest.You had to buy the stock shares to receive the dividend payments.You had to buy the property to rent it out.The trend to notice is that in all cases, the passive income involves some kind of initial monetary investment as a way to start the process of making more money. Earnings from owning a business partnership in which you’re a passive partner. ![]()
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