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Residual income is when you continue to get paid after the work is done. Residual income comes from building an asset that continues to pay you after the work has been 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. 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 anymore. 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 or doctors. Earning a high active income is often a lot of hard work and requires a dedication. This income is limited though, because no matter how much money you get paid you still need to show up to work to earn your money. Many people talk about Residual income, or 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. 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. 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. The first thing is to be aware of how you work for active or residual income. Then you want to decide a path that transitions from active to residual income over time. It’s hard to start a new business and create residual income tomorrow so you have to have some patience. As you make more residual income you can start to scale back the hours you put into active income. This will mean your residual income will grow even faster once you pay it more attention. Passive income is when you continue to get paid after the work is done. Passive income comes from building an asset that continues to pay you after the work has been 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. 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 anymore. 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 or doctors. Earning a high active income is often a lot of hard work and requires dedication. This income is limited though, because no matter how much money you get paid you still need to show up to work to earn your money. Many people talk about Passive income, or Residual 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 them to run smoothly. 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. 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. Be aware of how you work for active or passive income. Then you want to decide on a path that will transition from active to residual income over time. It’s hard to start a new business and create residual income tomorrow so you have to have be a little patience. As you make more residual income you can start to scale back the hours you put into active income. This will mean your residual income will grow even faster once you pay it more attention. Would you like to find a solution to your savings and debt crisis? Do you want to create a hedge against inflation or better yet, would you like to achieve Financial Freedom? Guess what? You're not alone. You can start earning a residual income from home too. Just click here! About the Author Julye is an entrepreneur who enjoys helping people improve their lives. For more information on how Julye can help you achieve your financial dreams, click here!
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