Residual income (also called passive, or recurring income) is
income that continues to be generated after the initial effort
has been expended. Compare this to what most of us focus on
earning: linear income, which is one-shot compensation or
payment in the form of a fee, wage, commission or salary.
Linear income is directly proportional to the number of hours
expended (40 hrs. of pay for 40 hrs. of work). One of the great
advantages of residual income is that once things are set in
motion, you continue making money from your initial efforts,
while gaining time to devote to other things… such as
generating more streams of residual income!
There are a variety of ways residual income can be earned.
Following are some examples.
1) Transfer the rights to a book you wrote, a software program
you created, a gadget you invented, or a song you recorded, to
a company that agrees to pay you a percentage of each copy of
your work sold in the future.
2) Become an actor and draw residual income from each of
your movies, TV shows, or commercials, each time they run.
3) Let an oil company drill a well on your property in exchange
for a percentage of the revenue.
4) Purchase an office building or other real estate that earns
you recurring income through lease or rental payments.
The above ways of earning residual income generally aren’t that
easy to implement. Following are some that are more attainable
for the average person:
5) Maintain a savings and investment program that pays you
residual income in the form of interest or dividends.
6) Market your own products and/or services that lend
themselves to repeat sales.
I’m referring to products or services that are regularly used
or consumed, and that must be purchased over and over again.
A product or service that you create only once, but sell over
and over again, could also be categorized as a form of
residual income (although continual effort may be required in
Don’t have your own product or service that lends itself to
repeat sales? Consider the next two options for earning
7) Join affiliate/associate programs that offer products or
services that lend themselves to repeat sales.
For example, Internet marketers regularly use services such as
web hosting, autoresponders, etc. Some affiliate programs that
offer such services pay residual commissions to resellers for
as long as the original customers they’ve referred remain
8) Join affiliate/associate programs that pay commissions on
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.
For the sake of this article, I’m not referring to MLM
(network marketing) programs with many levels. I’m referring
to affiliate programs with no more than two levels.
Since many affiliate marketers don’t actively promote their
programs, don’t sit back and rely on income from second-level
commissions, but view it as icing on the cake. You’ll have
better success with a program if you actively market it
Some of 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.
I’ve done a lot of research on affiliate programs. For a list
of the best e-commerce affiliate programs my research has
revealed, see: http://AffiliateProfitInfo.com/programs/best.htm
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.
I’m not against earning good, honest, “one-shot” linear
income, but given a choice, which would YOU rather do: get
paid only once for work you’ve done through linear income, or
get paid repeatedly – perhaps for years or even the rest of
your life – for work you’ve performed only once, through
Check out Marty’s directory of only *proven* money-makingaffiliate programs at: http://AffiliateProfitInfo.com/guide/His highly-rated book, Internet Marketing Goldmine, revealspowerful Internet success strategies and is available at:http://ProfitInfo.com/