There are different kinds of income, and most financial experts will tell you that having multiple kinds is your best plan for financial freedom.
Understanding the different kinds of income is the first step in creating them for yourself. Residual income is one such revenue stream that can yield big results with the right investment of time and energy.
Are you wondering how to get residual income? Keep reading.
Residual Income Vs Passive Income
First, we need to break down the kinds of income. Passive and residual are two terms that are used interchangeably, but they represent two different kinds of income according to the Internal Revenue Service.
Passive income is revenue earned with no active effort on your part. You could be a silent partner in a business, or maybe you were part of a larger project that yields continued income for participants after the initial input. Rental properties owned by investors would be a good example.
Residual income is a form of passive income. It is used to describe the amount of money remaining after all debts and expenses are paid, but can also refer to money that you continue to generate through investments or projects you oversee periodically.
An easy way to put it is that residual income can be passive, but passive income won’t always be residual.
How to Get Residual Income
It’s important to understand this if you’re thinking about creating residual income.
To create a residual income, you need to understand your knowledge and skills and know the resources you have available to start. The following are some ideas to get you started.
1. Rent out a room. You may not be able to afford to buy a rental, but if you have a spare room or storage space you can start building the funds to do so by renting it out. Boom – instant residual income.
2. Invest. This is an easy one that almost anyone can do. Create an online portfolio and start investing the funds you do have to go to work creating a residual income for you!
3. Sell something. Whether you choose to develop a product like an online course or sign up to drop ship products from a vendor, after the initial work of creating the website you’ll be able to sit back and watch, mostly hands-off, as orders start rolling in.
If you’re interested in creating residual income, your best bet is to talk to a financial professional like this broker dealer to learn more about your options.
Creating Residual Income
More and more people are learning how to get residual income for themselves and creating a life with more freedom. Whether you’re looking for a little extra spending money or you’re trying to break completely away from the nine to five, residual income could be the answer.
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