Residual income, also known as passive or recurring income, is a type of income that continues to generate earnings after the initial effort has been made. This is in contrast to linear income, which is a one-time payment for a service or work done, such as a fee, wage, commission, or salary. Linear income is directly proportional to the number of hours worked, whereas residual income allows you to continue earning from your initial efforts while freeing up time for other pursuits, including generating more streams of residual income.
There are numerous ways to earn residual income. Here are some examples:
However, these methods of earning residual income may not be easily attainable for everyone. Here are some more accessible options:
A product or service that you create only once but sell repeatedly could also be categorized as a form of residual income, although continual effort may be required in marketing it.
If you don't have your own product or service that lends itself to repeat sales, consider joining affiliate or associate programs that offer products or services that lend themselves to repeat sales. For example, Internet marketers regularly use services such as web hosting and autoresponders. Some affiliate programs that offer such services pay residual commissions to resellers for as long as the original customers they've referred remain paying customers.
Certain affiliate programs can also generate residual income in another way: by paying affiliates a percentage of the commissions earned by those who sign up under them. However, it's important to note that this article is not referring to multi-level marketing (MLM) programs with many levels, but to affiliate programs with no more than two levels.
The most ideal affiliate programs combine the best of both worlds: Products or services that lend themselves to repeat sales, plus residual commissions based on the earnings of those who sign up as resellers under you.
The best types of residual income are usually those that you have exclusive rights to or otherwise control. They may be harder and more time-consuming to develop or acquire, but the rewards are usually greater, and the income more stable.
While there's nothing wrong with earning good, honest, "one-shot" linear income, given a choice, wouldn't you rather get paid repeatedly - perhaps for years or even the rest of your life - for work you've performed only once, through residual income?
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