With residual income, you don’t have to be present or intricately involved to get paid. You get paid for work you completed once or are periodically overseeing. In contrast, residual income is income from an investment that earns over the minimum rate of return. Working as a nurse or a computer engineer for a salary are two examples of active income. Active income, for example, refers to when you directly act or perform a service for money, including salaries, wages, tips, commissions, and income from a business you’re actively involved with. There are countless ways to make money, but some are much more time-intensive than others. While residual income can be used to describe the amount of net income after all costs are paid down, it also refers to the amount of money you continue to generate after your initial work is done.
This guide breaks down the steps for building residual income and offers fourteen ideas for establishing passive income that will bring you lucrative returns for years to come.
#Residual income definition how to
If you’re like many others, you may be unsure what residual income means and how to achieve it. With the substantial increase of online platforms and opportunities, residual income is easier to achieve than ever before. Looking for ways to build financial wealth long-term without adding more work to your daily life? Residual income allows you to increase your fortune passively - meaning you’re earning cash while you eat, sleep, and brush your teeth.