Residual Income is another term for recurring income. In a nutshell, there are three (3) types of income streams that you may have coming into your business.
- If you do a one-time job, sale or perform a contract, you get paid once and the income stops there.
- If you do a normal 9 to 5 job, you will continue to get paid as long you continue to work for your employer—often called a linear income. This is the type of income that the majority of workers “enjoy.” Even if you are a neurosurgeon, lawyer or engineer, you are only paid as long as you continue working. You stop working and the bank account dwindles.
- The third type of income is the residual income where you are paid even after you have stopped working. For example, you wrote a book and as long as your book continues to sell, you will continue to receive royalty income for a work done once.
The majority of rich and affluent people created wealth through a form of residual income stream. Take singers for example; they can still continue to receive royalty from the sales of their records made decades ago. They can even repackage the same oldies and sell them to generate new income. They don’t have to spend time in the studio to record new songs in order to have the cash keep flowing in! This is the most ideal situation of the three. We would all like to work once and get paid over and over again. That is the power of recurring income!
The majority of professionals that enjoy this type of income belong to the creative fields such as actors, writers, singers, and inventors.
Talk soon….
Keep Moving Forward!
-Dave
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